By Nash Herman

In a frenzy to counter proposed Initiatives 50 and 108, Colorado legislators successfully passed new property tax legislation during the August special session. HB24B-1001, the “deal bill,” was created to convince the creators of 50 and 108 to remove the two initiatives from the November ballot. Unsatisfied with the property tax bill passed in the regular session (SB-233), the creators of 50 and 108 promised to remove their initiatives from the ballot only if Governor Polis called a special session to pass HB24B-1001.  

Independence Institute’s Fiscal Policy Center already published an analysis of SB-233 and the two initiatives in the report “2024 Property Tax Reform: The Choices Before Colorado Voters.” This short analysis builds on that report to explain what will be changing for Colorado property taxes this year.  

HB24B-1001 Revenue growth limits 

HB24B-1001 does not depart significantly from SB-233. However, there are a few new and important differences. Whereas SB-233 created a 5.5% revenue growth limit for governments from the previous year (excluding school districts and home rule jurisdictions), the deal bill alters the limit to 10.5% over a two-year assessment cycle. Local governments can still waive such limits with voter approval, as was allowed in SB-233. Although not directly impactful to current property tax bills, such limits aim to prevent excessive rises in government revenues that appear simply due to increases in property values. 

The new bill also creates a school district limit, which the previous bill did not include. The new school district revenue limit is set to 6% from the previous year multiplied by the number of years in a reassessment cycle (two years)—or by the percentage that the general assembly annually increases the statewide base per pupil funding for public education and the percentage increase in pupil enrollment for both the relevant property tax year and the other tax year in the same reassessment cycle— whichever is greater. 

In addition, the bill establishes annual valuation for assessment of residential properties to ensure that school districts do not exceed the limit and to compensate for inaccurate valuation adjustments in the preceding property tax year. However, HB24B-1001 also allows all schools districts to waive the property tax limit but requires statewide voter approval rather than local to do so. 

HB24B-1001 Non-residential assessment rates 

Assessment rates typically have the highest impact on an individual’s property tax bills because they determine how much of the property’s real market value may be taxed. HB24B-1001 lowers most non-residential assessment rates to 27% and to 27.5% for vacant land (down from 29% before SB-233 was passed) in 2025. In 2026, non-residential assessment rates are split into commercial and agricultural (both with a 25% rate), vacant land (which remains at 27.5%), and most other non-residential and personal property at 26%. From 2027 and beyond, the valuation for non-residential and personal property is 25%, and vacant land remains at 27.5%.  

HB24B-1001 Residential assessment rates 

The deal bill changes residential rates depending on the growth rate of statewide actual value between property tax years 2024 and 2025. If statewide actual value grows more than 5%, levies imposed by school districts are 6.95% (compared to SB-233’s 7.15%) of actual value in 2025. Non-school district assessment rates are 6.15% (compared to SB-233’s 6.4%) in 2025. In subsequent years, non-school government assessment rates are set to 6.7% minus either 10% of the actual value of the property or $70,000, whichever is less (compared to SB-233’s 7.15% and equal deductions). 

Upon growth of statewide actual value being less than or equal to 5%, school district assessment rates are 7.05% (compared to SB-233’s 7.15%) in 2025. Levies imposed by non-school governments are 6.25% (compared to SB-233’s 6.4%) in 2025. In subsequent years, non-school government assessment rates are set to 6.8% minus the lesser of 10% of the actual value of the property or $70,000 (compared to SB-233’s 7.15% and equal deductions). 

Other Considerations 

Aside from the differences explained in the previous sections, the new bill is nearly the same as SB-233. The similarities include provisions for the state government to backfill lost revenues to local governments and similar exclusions for extractive industries and home rule districts. However, the new bill will still provide about $255 million more in property tax cuts than SB-233, but $1.63 billion less than if the “catastrophic” initiatives passed. 

It should be noted that the home-rule exemptions in both SB-233 and HB24B-1001 exempt several municipalities from the revenue growth limit. Therefore, the revenue growth limit will likely not apply to swaths of the population. While not directly impacting individual property tax bills, many local governments will be exempt from the revenue growth limits, thus circumventing part of the bill. Additionally, HB24B-1001 allows for a revenue limit “roll-over” for local governments and school districts that do not reach the revenue cap in one year to roll over the uncollected revenue in subsequent years, further avoiding the revenue growth limit. For example, if a school district only collects 4% one year, the additional 2% under the 6% cap can roll over to create an 8% limit in the following year. 

One critical consideration in which HB24B-1001 improves upon SB-233 is a provision that protects the limit and assessment rate cuts via the Taxpayer’s Bill of Rights (TABOR). Without such protections, legislators could change the assessment rates and revenue limits in future years without requiring voter approval. That TABOR protection was likely a significant factor in the negotiations to pass HB24B-1001 and remove the initiatives from the ballot in November. 

Conclusion 

Independence Institute’s previous analysis of Colorado voters’ options for property taxes in 2024 was critical of all the available options. SB-233 certainly would have mitigated the large spikes in property taxes, but it would not likely lower taxes for the average property owner. Despite likely offering property tax relief to most Coloradans, the two initiatives were too ambiguous and would likely result in more power in the hands of the progressive state legislature to define such uncertainties. Although there is no longer a choice for Colorado voters, HB24B-1001 currently offers the best solution for property taxes considering both the compromises that made it possible and the alternatives. 

Table 1 below shows how property taxes might change for an average Colorado homeowner. Despite differences in actual mill rates between counties, and not including school district assessment rates, the table should give a basic estimation based on statewide averages for how the new bill differs from the old one in the out-years (2026 and beyond).   

Table 1: Comparing SB-233 with HB24B-1001 

In conclusion, despite the controversy of HB24B-1001, proponents of SB-233 and Initiatives 50 and 108 compromised and came up with the best present solution for property taxes. Coloradans should see property tax relief, and funding for schools and firefighters should not be catastrophically reduced (as opponents of the initiatives feared). HB24B-1001 is not a perfect solution, nor will it likely be a permanent solution to property taxes in Colorado, but it is a positive step in the right direction.