The United States, including Colorado, is suffering from an affordability crisis. Our local districts across Colorado including fire, library, sanitation, school, and counties now have a huge opportunity and responsibility to act in the upcoming weeks to help reduce the cost of living for Coloradans.
Reducing property taxes is part of our overall effort to save people money. That’s why you’ve been hearing recently about the vigorous debate around how to reduce property taxes. I’m pleased that a successful special session of the legislature last week passed historic property tax relief that, combined with previously passed property tax relief, will subtract $55,000 per home from state property tax valuation and reduce the residential assessment rate to 6.7%.
Coloradans living in a $500,000 home will save an average of about $505 on their 2023 property tax bill. But while these savings will certainly help, property tax bills will still go up for most Colorado families, which is why I am asking local governments to provide additional savings by reducing their property tax rates.
I recently wrote to every local government board chair asking them to take action: “With the historic rise in property values, most districts can make significant rate cuts and still maintain strong revenue growth at or above the rate of inflation…I urge you to reduce your mill levy as much as possible.”
I also reminded our hardworking local leaders that I signed legislation this year that allows districts to temporarily reduce mill levies without risking a permanent loss of revenue in an uncertain future.
I further directed the Department of Local Affairs to provide a helpful toolkit of options for districts to lower rates this year while preserving budgetary flexibility. Across the state, the district directors and commissioners we elect will make decisions in the next few weeks and I urge them to take action to keep communities across our state affordable.
Colorado’s overall economy remains strong, unemployment is low, and our state has a healthy budget surplus in case of an economic downturn. However, families are still burdened with a higher cost of living through no fault of their own. Prices have gone up faster than income for most families these last few years.
And while in-state gas prices are now hovering around $3.00/gallon, among the lowest in two years, the largest cost most families experience is their rent or mortgage. These costs continue to go up, largely driven by high-interest rates and a scarcity of homes to rent or buy near job centers.
My focus on more housing now seeks to remove barriers to increase housing supply, especially for the more affordable types of housing including apartments and condos, accessory dwelling units – also known as ADU’s or granny-flats – multiplexes, and homes near transit.
One factor that contributes to the cost of rent and homeownership across the board is rising property taxes. The perfect storm of the repeal of the Gallagher Amendment along with a record increase in home values, about 40% average across the state, was based on the two-year period ending in June 2022, which unfortunately was the peak of the housing market. This has led to an impending rise in property taxes due next year. Hardworking people in Colorado simply cannot afford a 40% increase in their tax bills, or even a 20% increase. Wages have simply not kept pace with the rising cost of living – especially housing – and high inflation and interest rates are creating an affordability crisis for many Colorado families.
Thousands of local elected officials in our state can help avoid an affordability crisis.
I want to applaud the Colorado Mountain College district, which encompasses Eagle, Grand, Jackson, Lake, Garfield, Pitkin, Summit, and Routt counties. Already one of the more expensive areas to live in the state, and with an average increase in home prices exceeding the state average. Colorado Mountain College plans to reduce its mill levy to keep revenue growth near inflation (5.7%). That’s a big deal, and I am grateful for the actions of their elected trustees and other districts that are taking action to reduce their levies.
Now that I have urged our local elected leaders to reduce their mill levy as much as possible, I encourage you to reach out to your local taxing districts as well. Your local elected officials need to hear from you. Ask them to reduce the property tax rates this year to make your community more affordable.
Jared Polis is serving his second term as the governor of Colorado.
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