Ballots will be mailed out in a couple of weeks to Colorado voters, with only a few questions to be considered.
Ballot Measure 5A
The only local measure on the ballot is 5A, a request from the Archuleta School District to continue the ‘Mill Levy Override’ (MLO) approved by voters in 2018. At that election, voters approved an additional property tax totaling $1.7 million, for a period of seven years, to fund salary increases, school security, and full-day kindergarten for the District’s three traditional schools — Pagosa Springs High School, Pagosa Springs Middle Schoo, and Pagosa Springs Elementary School — and also for the District-authorized charter school, Pagosa Peak Open School. The MLO is collected in addition to the state-established property tax for schools.
The MLO will expire in 2025 if not renewed by the local voters, with the likely result being staff salary reductions or staff layoffs. 5A does not ask for an increase in taxes, but rather a continuation of the existing $1.7 million MLO.
The proponents of 5A have a website here.
I have not come across any organized opposition to 5A.
Disclosure: I currently serve as a volunteer on the Pagosa Peak Open School (PPOS) Board of Directors, and as such, have a fiduciary duty to encourage funding for the school. Measure 5A will benefit PPOS, financially, if approved.
Two items were placed on the ballot by the Colorado Legislature.
Proposition HH
Prop HH would “reduce property taxes” for homes and businesses, but not exactly in a straightforward manner.
HH would lower the property taxes owed over the next decade (through 2032) compared to what would be owed under our current laws, but based on the way property values have increased in the state on recent years, property owners are not likely to see a drop in property taxes owed, compared to 2022. Prop HH would also allow the state government to retain money that would otherwise be refunded to taxpayers under the Taxpayers Bill of Rights (TABOR) for at least the next ten years. The retained revenue would be spent on education; reimbursements to local governments, and rental assistance programs.
Local governments — cities, towns, counties, school districts, and special districts — would initially be eligible for reimbursement, but the reimbursements are expected to disappear if property values continue to escalate.
The state government is not primarily funded through property taxes, but rather through other types of tax, including income tax and sales tax.
The voters could approve this new law for a ten-year period; after the ten years is up, the Legislature could choose to extend the law — forever — without voter approval.
According to opponents of the measure, Proposition HH would actually increase the amount of taxes paid over the next decade, because it reduces or eliminates any TABOR refunds currently required when the state collects revenues in excess of TABOR limits. Opponents argue that property tax relief, in an unexpectedly hot real estate market, should be provided by the legislature without tying the benefit to reduced TABOR refunds.
You can use this online tool to calculate the effects of Prop HH on your own tax bill, using this calculator provided by the Legislature. The tool calculates the financial impacts for 2023 and 2024 tax years, but HH would continue for another eight years.
For joint tax filers with a median family income for Archuleta County ($60,000) and owning a median-priced home ($500,000) Prop HH would produce a net financial benefit of about $280 next year, and about $190 the following year.
Assuming that the Legislature’s calculator is reasonably accurate.
NOTE: The actual impact of TABOR refund changes on an individual taxpayer will depend on actual state revenue collections, inflation rates, population growth, and an individual’s actual future income. The actual property tax impact on an individual taxpayer will depend on actual mill levies and property values, the type of property, existing local TABOR and revenue limitations, and local policy decisions. The property tax estimates in the calculator will differ from an individual household’s taxes for several reasons.
We will note that Prop HH, if approved, is not guaranteed to benefit renters — residential or commercial renters — who do not own property. But it might.
Proposition II
Proposition II is a bit less complicated than Prop HH. It basically allows the state government to retain about $24 million in tax revenues already collected from the sales of tobacco and nicotine products, that would normally be refunded to wholesalers and distributors of those products. The retained money would be used to fund preschool programs.
These taxes were approved by the voters in 2020, via Prop EE, but the state collected more than was estimated in that ballot measure, thus requiring a refund to distributors, unless Prop II is approved.
Prop II also allows the state to maintain the current tax rates on those products, instead of seeing the tax rates reduced as required by Prop EE.
Opponents of Prop II point out that we are requiring only a select group of citizens — users of tobacco and nicotine products — to fund the state’s additional preschool expenditures, and that many of these folks suffer from addiction.