One of the biggest stories out of the Colorado General Assembly this year emerged late in the session as a group of corporate executives threw its weight around.
They wanted to keep more of their money, and who can blame them for that. But the episode revealed that policy makers are in thrall to a smug segment of the state’s richest people, whose insouciant demands prioritize benefits for business over public interest. They largely got their way, because they have the muscle to divert the whole Capitol’s energy, and they appeared willing to follow through on a tax-limiting plan that would have compromised the budgets of countless local entities, particularly public schools.
The outcome should remind Coloradans of the inequities baked into the state’s system of generating revenue and inspire reform.
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Property values in Colorado are rising. That means homeowners and businesses are paying more, because value is one of the factors in the formula that determines what an owner owes in property taxes. An effort to respond to an increasing property tax burden is in itself worthy of consideration.
The way Colorado Concern went about it, however, is unworthy. Colorado Concern is a group founded by Larry Mizel, a longtime developer and high-profile fundraiser for former President Donald Trump. Its membership is, in its own words, “an exclusive alliance of top executives” that’s like a who’s who of monied Colorado heavyweights — leaders in finance, banking, energy, real estate development and other such industries. These people are not The People.
But, purporting to be looking out for the people, Colorado Concern advanced a ballot initiative that would have capped annual property valuation at 3% for the purposes of tax assessments. In a report about rising Colorado property values and taxes that the group recently produced, it claimed to be concerned for “homeowners and renters,” as well as the state’s economic competitiveness. But in fact its singular objective is making the state as accommodating as possible for the corporate interests represented in its membership.
“Colorado Concern is a statewide CEO-based organization devoted to investing in and promoting a pro-business environment through the political process,” it proclaims on its website.
What the group did not broadcast was the massive cost to schools and other local entities that its proposed constitutional amendment would have imposed. Property tax revenue in Colorado funds school districts, public safety, county government, libraries and other local districts. Nonpartisan state staff estimated the initiative would have reduced the revenues such entities would otherwise have collected by $1.2 billion in 2023 alone, and the decrease would have grown in subsequent years.
Don't expect residents to be grateful when an alliance of privileged business bullies hold schools hostage and strongarm the General Assembly.
Democratic lawmakers in the legislative majority and Gov. Jared Polis, also a Democrat, were forced to respond. They entered negotiations with Colorado Concern, which wielded the ballot initiative like a fiscal sword. They emerged with a compromise — a temporary cut in residential and commercial assessment rates, which will lower what property owners owe by some, but not by as much, or as long, as under the initiative, which Colorado Concern agreed to withdraw.
It’s a civic imperative to debate the state’s tax policies. Corporate executives have every right to participate in such discussions. But don’t expect residents to be grateful when an alliance of privileged business bullies hold schools hostage and strongarm the General Assembly in the final weeks of a lawmaking session, when legislators had dozens of priority bills related to the environment, health, law enforcement and other essential areas to deal with. That’s not how good tax policy gets made.
Indeed, there are worthy property tax reforms that should be considered, especially those that promote equity and address the staggering inequality that plagues American communities, including in Colorado. Scott Wasserman, president of the liberal Bell Policy Center, has proposed one reform that would account for such economic imbalances.
“We need a system that can tell the difference between a $400,000 two-bedroom home and a $10 million mansion,” he wrote, adding that “changes are needed to make sure the right people see savings while others pay their fair share.”
The ability for a taxing authority to distinguish properties according to value — so that a starter home owned by wage earners and a mansion owned by billionaires can be taxed at different, more fair, rates — would require a change to the state Constitution.
Elliot Goldbaum of the Colorado Fiscal Institute offered another proposed reform. The state could enact a real estate transaction tax, which would also require a constitutional amendment. The tax could be structured so that higher taxes would apply to properties of higher value, and revenues could be used to support affordable housing. Colorado is one of only 13 states that doesn’t have a property transfer tax.
These kinds of property tax proposals might cause concern among the affluent cheerleaders of deep-pocketed corporations, but they would protect schools from abuse and better serve the people.
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