Executive Summary
Coloradans have several options to try to address rising property taxes in 2024.
The state legislature passed SB24-233 with bipartisan support at the end of the 2024 legislative session. Voters could choose to keep SB24-233 or eschew the bill for either or both Initiatives 50 and 108.
Despite being a better alternative than if no legislation had been passed in 2024, property taxes would still rise in 2025 under SB24-233. Meant to head-off future acute property tax spikes rather than cut existing taxes, the new law modestly reduces both residential and non-residential assessment rates and adopts a 5.5 percent limit on revenue growth for some local districts. As a result, most Coloradans would still see their property taxes increase, albeit less than they would if the bill had not been passed.
Alternatively, a pair of proposed initiatives seek to replace the legislature’s solution with policies approved by the voters of Colorado.
Initiative 50 is a proposed constitutional amendment to limit statewide property tax revenue growth to 4 percent each year unless voters approve exceeding the cap. While revenue limits with voter override mechanisms are familiar in Colorado, Initiative 50’s novel design based upon aggregating local government property tax revenue creates uncertainty for Coloradans and local governments alike. It would open the door for the state legislature to pick winners and losers among local governments.
The uncertainties the bill creates include the mechanism for how and when voters would approve surplus revenue, which districts would be forced to make cuts to stay under the limit, maintenance of education funding and revenues to fulfill outstanding local district bond obligations, and other ambiguities surrounding implementation that would need to be fleshed out by the state legislature. Ultimately, the statewide focus of the measure neglects local context. Considering the state’s recent history with regional conflict over statewide ballot votes (e.g., wolf reintroduction), the initiative would likely set the stage for the voices of the Denver metro area to dictate property tax growth over rural parts of the state.
Initiative 108 is a proposed measure that would cut residential and non-residential assessment rates significantly, to 5.7 percent and 24 percent, respectively. It is the only option of the three that offers voters an actual property tax cut rather than just a restraint on future increases. Although the statewide measure is not ideal for a long-term solution to property taxes in Colorado, it would not create the same challenges as Initiative 50 because it uses an existing and well-understood mechanism (adjusting state assessment rates). It does, however, require the state legislature to backfill “lost” revenue to local governments, with some dispute among different stakeholders as to what that entails.
Importantly, voter approval of either Initiative 50 or 108 would automatically result in the repeal of SB24-233.
Colorado homeowners are fed up with the seemingly inexorable climb of property taxes owed every year. After voters rejected a TABOR refund gimmick disguised as tax relief in Proposition HH, and the state’s Democratic majority failed to implement a permanent solution in the 2023 special session, Colorado voters have a new buffet of options before them this Fall.
SB24-233 attempts to curb the acute spikes in property taxes seen since the repeal of the Gallagher Amendment in 2020. Not satisfied with SB24-233, however, outside groups have proposed two ballot initiatives to address property taxes in Colorado, Initiative 50 and Initiative 108. This post will briefly analyze the primary options Colorado voters have in 2024 to address the property tax issue.
A Brief Primer on Property Taxes in Colorado
First, it might be useful to briefly explain how property taxes work in Colorado. Residential property taxes are determined by three factors. The three factors are the value of the property, the assessment rate (how much of that property’s value can be taxed by local mill levies), and the mill rate.
Colorado has multiple assessment rates depending on a property’s classification. In 2024, residential properties had an assessment rate of 6.8%, and non-residential properties had a rate of 29%. For example, a house valued at $500,000 would have an assessed value of $34,000 (by multiplying the real value by the assessment rate).
A mill is a $1 payment for every $1,000 of taxable value levied by cities, counties, and local districts such as schools, fire departments, etc., for the purposes of maintaining their services. In Colorado, school districts tend to levy the most mills. All property tax revenue in Colorado goes to those local districts rather than the state government. Using the example above, the assessed value ($34,000) would then be multiplied by the mills owed from each relevant district collecting taxes to reach the total amount owed (Colorado’s total average between 2018-2023 was 83.82 mills). Therefore, multiplying $34,000 by 83.82 mills means that the homeowner would owe approximately $2,850. The given example is highlighted in Table 1 below.
It should be noted that property tax revenues may still increase despite a stable levy rate due to increased assessment valuations from new construction or higher market prices (see the appendix). For this analysis, the levy rate remains constant at 83.82 mills (the 2023 average) because the average levy rate change year-over-year remains negligible. Also, the analysis focuses on 2025 because it is the first year that all three options would impact property taxes, even though SB24-233 will affect property tax bills in 2024.
Table 1: Example of property taxes in 2024 for a $500,000 home
| 2024 | |
| Value of Home | $500,000 |
| Assessment (Rate) | $34,000 (6.8%) |
| Mill Levy | $34,000 X 83.82 mills (average between 2018 and 2023) |
| Total owed | $2,850 |
To adjust property taxes, the government can adjust the assessment rate or the mill levy but cannot change the property’s market value. It can, however, create deductions from property valuations before applying the assessment rate (as in SB24-233). The government can also limit how much revenues can grow for local districts each year (as in SB24-233 and Initiative 50), but that would not necessarily impact an individual’s tax bill unless the limits were reached or surplus revenues could be refunded. SB24-233 and the two proposed initiatives each take a different approach via a few available mechanisms for adjusting future property taxes.
SB24-233
SB24-233 is a bipartisan bill that passed the legislature in the final days of the 2024 session. The bill addresses both mechanisms for adjusting property taxes and creates a new home property value deduction.
First, the bill will limit annual local government property tax revenue growth to 5.5%. That means the revenue from the mills that local governments levy cannot increase beyond 5.5% from the previous year unless waived by voters, as has already happened in several districts. For example, if a city collected $20 million in 2024, then in 2025 it could not collect more than $20.8 million, even if the total assessed value increased due to appreciating property values. However, the 5.5% limit does not apply to home rule local governments, school districts, or districts that have been given voter approval for waiving it. There are currently 99 home rule municipalities in Colorado who would then be exempt from the limit.
Second, the assessment rates for residential and non-residential properties would be reduced to 6.7% (from 6.8%) and 25% (from 29%), respectively, with some exceptions (for example, school districts would use a rate of 7.15%). It should also be noted that the reduction of the non-residential assessment rate would be done in 1% increments per year until 2027, when the rate would remain at 25%. The bill also creates a temporary $55,000 reduction to residential properties before applying the 6.7% assessment rate in 2024. In 2025, school districts will use an assessment rate of 7.15%, while non-school districts will use a 6.4% assessment rate. In subsequent years, school districts will maintain the 7.15% assessment rate, and non-school districts will use a 6.95% rate after implementing a value reduction of 10% (up to $70,000) of the property’s assessed value.
Table 2: Impacts of SB24-233 in 2025, assuming current market value & average revenue growth rates
| 2024 | 2025 before legislation | 2025 with SB-233 | |
| Value of Home | $500,000 | $537,000 ($500,000 + 7.4% growth) | $537,000 |
| Assessment Rate | $34,000 (6.8%) | $38,396 (7.15%) | $35,979 (6.7%) |
| Levy Rate | 83.82 mills (avg. 2018-2023) | 83.82 mills | 83.82 mills (Ignoring 5.5% limit due to home rule waivers) |
| Total owed | $2,850 | $3,218 | $2,932 |
| Change from 2024 to 2025 | + $368 | + $82 | |
| Percent change (2024-2025) | + 13% | + 3% |
Table 2 highlights how the average homeowner would still see an increase in property taxes under SB24-233 but less than if no legislation were passed. However, for simplicity, the table does not assume that total revenues are capped at the 5.5% revenue growth limit because so many districts have already waived the limit or are not affected due to home rule. Due to the significant exceptions in the bill, homeowners could see comparable increases to property taxes owed in recent years if they live in home-rule municipalities and other exempted districts.
The bill aims to mitigate the acute spikes in property taxes due to the increasing market values in recent years, which it appears to do according to Table 2.
Initiative 50
Initiative 50 is a constitutional amendment that will appear on the 2024 ballot in November. It will require at least 55% support to pass.
Instead of using assessment rates and a revenue cap, Initiative 50 only addresses the latter. Departing from SB24-233’s 5.5% local revenue cap, Initiative 50 would instead set a statewide revenue cap of 4%. Additionally, whereas local taxing districts can currently waive the 5.5% cap via local voter approval, a statewide vote would be the only way for governments to retain any revenue above 4%. As will be discussed more, Initiative 50’s proponents hope that it will work similarly to TABOR (though that is not a guarantee).
On average, Colorado cities saw total mill revenues increase at a rate of 9.8% per year between 2018 and 2023. However, Initiative 50 alone would likely have a comparable impact on slowing the growth of property tax revenues to SB24-233 (see Table 3). Unfortunately, Initiative 50 lacks vital information about its implementation.
The initiative neither specifies how individual local governments would reduce revenue to stay within the statewide limit nor how revenue over the statewide limit could/would be refunded to taxpayers. There is speculation that if revenues exceed the 4% limit, that money could be refunded to property owners, similar to how TABOR refunds work. However, that hope is not spelled out in the language of Initiative 50. Thus, these details would likely be left to the Colorado General Assembly to decide with clarifying legislation should voters approve the initiative.
Table 3 shows what property tax bills could look like, assuming that surplus revenues would be refunded directly to property owners. For simplicity, the table assumes one property owner per piece of property.
Table 3: Impacts of Initiative 50 in 2025
| 2024 | 2025 before legislation | 2025 with Initiative 50 | |
| Value of Home | $500,000 | $537,000 ($500,000 + 7.4% growth) | $537,000 |
| Assessment Rate | $34,000 (6.8%) | $38,396 (7.15%) | $38,396 (7.15%) |
| Levy Rate | 83.82 mills (avg. 2018-2023) | 83.82 mills | 83.82 mills (Assuming avg. revenue growth between 2018-2023 of 9.8%) |
| Total owed | $2,850 | $3,218 | $2,939 |
| Change from 2024 to 2025 | + $368 | + $368
– $279 (refund per property owner) + $89 |
|
| Percent change (2024-2025) | + 13% | + 3% |
However, it is just as possible that because the state collectively cannot collect over 4% from the previous year, an unspecified number of districts will be required to make significant cuts to stay under the revenue limit on the front end, and no such refund would be implemented. These unspecified details/districts would create the opportunity for more regulation, oversight, and picking of winners and losers among taxpayers, regions, and government services by the state legislature. Furthermore, the measure is unclear as to how voters would even approve/disapprove of governments keeping a revenue surplus over the 4% limit. Despite the limit affecting local revenues, the initiative does not specify whether the state or local governments would refund the surplus revenue.
Initiative 50 is well-intentioned. Most homeowners do not want the government collecting more taxes simply because market prices increase. If Initiative 50 focused on local revenue limits rather than a collective limit, it would be significantly improved. As it appears on the ballot for 2024, however, Initiative 50 creates many dangerous opportunities for the state legislature to control property taxes, which are fundamentally the purview of local government.
Initiative 108
Initiative 108 has not yet been approved to appear on the ballot but may be in time for November. Should it gain approval by the Secretary of State’s office, Colorado voters can choose to pass the measure with a simple majority.
The initiative focuses on adjusting the state assessment rate for properties. Whereas SB24-233 would cut the assessment rate by 0.1%, Initiative 108 would slash the residential assessment rate a whole percent to 5.7%. It would also cut the non-residential rate to 24%, down from 29%. These rate cuts would reduce property tax revenues. However, the initiative would require the state to reimburse local governments for “lost” revenues resulting from the rate cuts and maintenance of the state education fund.
As Table 4 shows, Initiative 108 is the only current option that would cut property taxes for the average Colorado homeowner.
Table 4: Impacts of Initiative 108
| 2024 | 2025 before legislation | 2025 with Initiative 108 | |
| Value of Home | $500,000 | $537,000 ($500,000 + 7.4% growth) | $537,000 |
| Assessment Rate | $34,000 (6.8%) | $38,396 (7.15%) | $30,609 (5.7%) |
| Levy Rate | 83.82 mills (avg. 2018-2023) | 83.82 mills | 83.82 mills |
| Total owed | $2,850 | $3,218 | $2,566 |
| Change from 2024 to 2025 | + $368 | -$284 | |
| Percent change (2024-2025) | + 13% | -11% |
The most controversial aspect of Initiative 108 is its required backfill provision. According to the Legislative Council Staff (LCS), 8% of the state’s budget (about $514 per person in Colorado) would be required for local reimbursements if the measure passes.
State legislators on both sides of the aisle have claimed that if either initiative (50 or 108) passed, the measures would be “catastrophic” to the state’s budget. However, proponents of Initiatives 50 and 108 assert that the real backfill amount if both initiatives passed would be closer to $200 million rather than the nearly $3 billion claimed by the LCS
Proponents claim that tax districts cannot lose money they never had and that the initiative should be interpreted as state reimbursement only if revenues collected are lower than the previous year, not based on expected revenues. While governments may prefer to defer to such an interpretation if the initiatives pass, legislators will likely have no choice but to follow the guidance of the Office of Legislative Legal Services, which pinned the number at $2.25 billion or more.
Summary of Choices Before Colorado Homeowners in 2024
Table 5 is a consolidation of the previous figures. Assuming the best case scenario of implementation, Initiative 50 and Initiative 108 together appear to be the best options for Colorado homeowners in 2024. Unfortunately, because of the issues with Initiative 50 discussed previously, it is likely that the measure would create many unintended problems for Coloradans and local governments.
Table 5: Consolidated Table
| 2024 | 2025 before legislation | 2025 with SB-233 | 2025 with Initiative 50 | 2025 with Initiative 108 | 2025 with Initiatives 50 & 108 | |
| Value of Home | $500,000 | $537,000 ($500,000 + 7.4% growth) | $537,000 | $537,000 | $537,000 | $537,000 |
| Assessment Rate | $34,000 (6.8%) | $38,396 (7.15%) | $35,979 (6.7%) | $38,396 (7.15%) | $30,609 (5.7%) | $30,609 (5.7%) |
| Levy Rate | 83.82 mills (avg. 2018-2023) | 83.82 mills | 83.82 mills (Ignoring 5.5% limit due to home rule waivers) | 83.82 mills (Assuming avg. revenue growth between 2018-2023 of 9.8%) | 83.82 mills | 83.82
(Assuming avg. revenue growth between 2018-2023 of 9.8%) |
| Total owed | $2,850 | $3,218 | $2,932 | $2,939 | $2,566 | $2,287 |
| Change from 2024 to 2025 | + $368 | + $82 | + $368
– $279 (refund per property owner) + $89 |
-$284 | -$284
– $279 (refund per property owner) – $563 |
|
| Percent change (2024-2025) | + 13% | + 3% | + 3% | -11% | – 25% |
Initiative 108 is the only proposal that would cut property taxes rather than simply slow their growth. However, the initiative is not without its own challenges. A sweeping rate cut on its own is an imperfect solution to a long-term problem, as state lawmakers could decide to ratchet assessment rates back up over time. Additionally, should Initiative 108 pass and Initiative 50 fail, Colorado property owners would be left without any property tax growth capping mechanism due to the automatic repeal of SB-233 and its (admittedly weak) revenue cap. Initiative 108 poses some uncertainties, primarily concerning the scope and mechanics of required local government backfill. Nevertheless, it will likely be an appealing short-term solution for Colorado homeowners and business owners seeking to reduce their property tax bills.
In the event that voters decide to reject both initiatives, Coloradans will at least be able fall back on SB24-233 and its modest protections against future property tax spikes.
Appendix A: Mill levy & revenue assumed growth rates
Despite the mill rate decreasing at an average rate of 0.4% between 2018-2023, revenues continued to increase at an average rate of 9.8% in the same period. Table 6 below highlights where the -0.4% figure was reached. Table 7 shows the increased revenues.
Because the rate of change in mills levied has remained negligible for the last several years, the analysis and tables in this report assume the levy rate to be stable at 83.82 mills and that the average revenue growth will be 9.8% for years 2024 and 2025.
Table 6: Total average mill rate and % change from 2018-2023
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | Average | |
| Total Avg. Mills Levied | 83.347 | 81.748 | 83.537 | 83.436 | 85.034 | 81.498 | 83.82 |
| Percent change from previous year | – 2% | + 2% | + 0% | + 2% | – 4% | – 0.4% |
Table 7: Total property tax revenue and % change from 2018-2023
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | Average | |
| Total Revenue | $9.639 billion
|
$11.081 billion
|
$11.366 billion
|
$11.922 billion
|
$12.764 billion | $15.246 billion | $12.003 billion |
| Percent change from previous year | + 15% | + 3% | + 5% | + 7% | + 19% | + 9.8% |
Appendix B: Initiative 50 refund calculation
To calculate a potential refund for Initiative 50 (assuming property owners are refunded if revenues exceed the 4% limit), one must calculate how much excess revenue would be divided by the number of property owners in the state. Assuming the revenue growth rate of 9.8% for years 2024 and 2025 calculated in Table 6, the expected revenue over the 4% limit in 2025 would amount to $970,989,763. Dividing that by the total estimated taxable parcels of 3,474,893 in 2025 comes to $279 refunded to each property owner, assuming one owner per property.
Table 8: Total Taxable Parcels per Year and % change between 2015-2023
| 2015 | 2017 | 2019 | 2021 | 2023 | Average | |
| Total taxable parcels | 2.585 million | 2.64 million | 2.91 million | 3.6 million | 3.26 million | 3 million |
| Percent change from previous year | + 2% | + 10% | + 24% | – 10% | + 6.5% |
