A cap on future tax growth

Proposition HH provides ALL residential property owners with a reduced assessment rate of 6.7% and reduces the amount of an owner-occupied home that is taxed by $50,000 in 2023 and $40,000 in all future years.

The average homeowner will save more than $500 per year over the next 10 years.

Commercial properties, which are mostly made up of small businesses, are assessed at a much higher rate (~29%) than residential properties (~7%). Proposition HH will reduce commercial property assessment rates down to 25.9%, resulting in saving hundreds of millions every year. Over the decade, Prop HH will save commercial property owners an estimated $4.5 billion.

If we don’t take action, property taxes are expected to skyrocket by 40% in Colorado. Increased property taxes are passed onto renters directly through rent increases, so preventing steep increases will help renters afford to stay where they live. In addition, the measure dedicates up to $20M every year to assist renters in paying for a portion of their rent.

Proposition HH allows seniors who were eligible for the Senior Homestead Exemption to move without losing the property tax savings. In addition to the reduced assessment rate of 6.7%, Coloradans who are over the age of 65 and have owned a home in Colorado for ten years will be eligible for an assessed value reduction of $150,000 in 2023 and $140,000 in future years, regardless of if they have moved residences.

Proposition HH is a responsible tax cut that is fully paid for and therefore ensures schools, which rely on property tax for funding, will be made whole.

Any reduction in revenue that school districts experience as a result of the tax cuts will be backfilled by the state. Additionally, any remaining revenue from the 1% TABOR change will be deposited into the State Education Fund, which is required to fund local school districts. In 2032 alone, the additional retained revenue is estimated to be $2.2 billion dollars.

Colorado’s per-pupil funding has been among the worst in the nation, ranking as low as 47th at times. Proposition HH will help Colorado get up closer to the national average in school funding.

Proposition HH ensures that counties and local services like schools, libraries, fire districts, and hospital districts don’t receive any budget cuts as a result of the tax cuts. The state is required to backfill these districts until and if their revenues grow by more than 20% from property taxes. This means that the high growth areas will easily be able to sustain themselves without state support, but rural and slower-growth areas will continue to be made whole.

Proposition HH maintains TABOR refunds and the right to vote on new taxes. And it only slightly modifies the TABOR formula by 1%. This 1% adjustment is a minor change to TABOR that ensures the tax cuts are done responsibly and 100% paid for with money from the state surplus.

Under Proposition HH, the vast majority of taxpayers will receive an increased TABOR refund of $820 in 2023. In 2024, the impact to the average taxpayer’s TABOR refund will be only $46—much less than the average $600 savings in property taxes.

Taxpayers are expected to continue receiving $1 billion in refunds each year, even if Proposition HH passes. The math shows that the tax relief benefits to taxpayers are much higher than any reduction in refunds.

Additionally, unlike other tax cuts that reduce funding for schools in order to pay for tax cuts for the rich, Proposition HH directs targeted relief to seniors, working families, and the middle class. And this tax relief is fully paid for by adjusting the TABOR cap by just 1%, not by cutting funding for schools. Without modest adjustments to the TABOR cap, the only way to reduce property taxes is by cutting funding for schools and other services like fire districts.