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July 11, 2024 HCR 24-1006
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Final Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 24-1161
Rep. Marshall
Date:
Bill Status:
Fiscal Analyst:
July 11, 2024
Deemed Lost
Emily Dohrman | 303-866-3687
Emily.dohrman@coleg.gov
Bill Topic: PROPERTY TAX REVENUE GROWTH LIMIT
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☐ State Transfer
☐ TABOR Refund
☒ Local Government
☐ Statutory Public Entity
The resolution would have referred a ballot measure to the voters at the November
2024 election that, if approved, would have imposed a local government property tax
revenue limit. It would have conditionally increased state and local expenditures
beginning in FY 2024-25, decreased local government revenue beginning in
FY 2025-26, and increased state revenue beginning in FY 2026-27.
Appropriation
Summary:
No appropriation would have been required.
Fiscal Note
Status:
The final fiscal note reflects the introduced resolution. The resolution was deemed lost
in House Appropriations on May 9, 2024; therefore, the impacts identified in this
analysis do not take effect.
Table 1
Conditional State Fiscal Impacts Under HCR 24-1006
Budget Year
FY 2024-25
Out Year
FY 2025-26
Revenue - -
Expenditures School Finance
1
- $1.9 million
Transfers - -
Other Budget Impacts - -
1
Expenditures for the state share of school finance may be paid from the General Fund, the State Education Fund,
the State Public School Fund, or a combination of these. Page 2
July 11, 2024 HCR 24-1006
Summary of Legislation
The resolution refers a constitutional amendment to voters at the November 2024 statewide
election. If approved by voters, the amendment would create a new annual property tax revenue
growth limit for taxing districts beginning with the 2025 property tax year. The limit would allow
revenue to grow by state population growth plus inflation, consistent with TABOR limit on state
spending, plus 2 percentage points, plus an amount allowable for newly taxed property such as
new construction, annexations, and previously exempt property. An amount for property that is
newly untaxed such as land excluded from a district, demolitions, or newly exempt property is
subtracted from the limit. If the limit is expected to be exceeded, the district must reduce its mill
levy such that revenue will fall below the limit.
The resolution establishes a process for waiving the limit and maintaining the district’s current
mill levy depending on whether the district is subject to TABOR limitations based on prior voter
approval. If the district is subject to TABOR limitations, the district needs voter approval to waive
the property tax growth limit. If the district has voter approval to retain and spend revenue
above the TABOR limit, the district’s governing body can waive the property tax growth limit
without voter approval.
Lastly, the resolution allows districts that have reduced their mill levies to comply with the
limitation, to raise mill levies back to up to their prior level without voter approval as long as
doing so does not exceed the growth limit.
Assumptions
Expectations for assessed values in property tax year 2025 are based on the December 2023
Legislative Council Staff (LCS) forecast for assessed values. The property tax growth limit is
estimated for each county based on the LCS March 2024 forecast for growth in the FY 2024-25
Referendum C cap, 5.8 percent, plus 2 percentage points, and adjustments for net new
construction. Net new construction is expected to be equal to the average growth in residential
assessed values over the past five intervening years.
State Revenue
If approved by voters, the resolution may increase cash fund revenue from severance tax
beginning in FY 2026-27 by reducing the amount of ad valorem credits. The ad valorem credit
allows oil and gas producers to claim a tax credit towards their severance tax liability in an
amount equal to 87.5 percent of their property tax obligation to local governments. In the event
that the property tax growth limit reduces the amount of property taxes owed, severance tax
revenue will increase in FY 2026-27. A forecast of credits is not yet available for FY 2026-27, and
the amount of the revenue impact is indeterminate. Severance tax revenue is subject to TABOR.
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July 11, 2024 HCR 24-1006
State Expenditures
Conditional on voter approval, the resolution will increase state expenditures for school finance
by $1.9 million in FY 2025-26 and varying amounts in future years. The resolution also
conditionally increases workload in the Department of Local Affairs (DOLA) and affects state
election expenditures. These impacts are described below.
School finance. The resolution conditionally decreases property tax collections from school
district total program mills, requiring an equivalent increase in the state share of total program
funding for school finance. The state aid obligation is expected to increase by $1.9 million in
FY 2025-26, corresponding to property tax year 2025, and by varying amounts in future years.
The state aid obligation may be paid from the General Fund, the State Education Fund, the State
Public School Fund, or a combination of these.
Department of Local Affairs. The resolution conditionally increases workload in DOLA to
provide technical assistance to help local districts understand the impact of the measure and to
make changes to forms as needed to assist local governments in being able to implement the
measure. The additional workload can be absorbed within existing appropriations.
Election expenditure impact — existing appropriations. This resolution includes a referred
measure that will appear before voters at the November 2024 general election. While no
additional appropriation is required, certain election costs are incurred by the state when ballot
measures are referred. These include reimbursing counties for certain election costs; publishing
the text and title of the measure in newspapers across the state; and preparing and mailing the
ballot information booklet.
Local Government
Local revenue. The resolution conditionally reduces local property tax revenue by imposing a
property tax growth limit. The resolution limits property tax revenues for all local governments
except that districts may obtain voter approval to waive the limit, and districts that have voter
approval to retain and spend revenue above the TABOR limit can waive the property tax limit
without voter approval.
Reduced local property tax revenue under the resolution depends on the number of local
governments that waive the limit. If local districts waive the new limit, the revenue impact of the
limit will be less. Additionally, some governments are subject to other revenue limits, such as the
5.5 percent property tax limit or the TABOR limit, which may be more restrictive than the
property tax growth limit established by this resolution.
To the extent that local governments implement the property tax growth limit without opting
out and are not already constrained by a more restrictive limit, property tax revenue will be
reduced. Assuming all impacted local governments implement the limitation, local property
taxes would be reduced by an estimated $12.7 million for property tax year 2025.
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July 11, 2024 HCR 24-1006
Table 2
Conditional Local Government Impacts Under HCR 24-1006
FY 2024-25
Property Tax Year 2024
Collected in 2025
FY 2025-26
Property Tax Year 2025
Collected in 2026
Property Tax Revenue - ($12.7 million)
School Districts – State Aid - $1.9 million
Net Revenue Impact - ($10.9 million)
Most local districts are expected not to be constrained by the property tax growth limit in
property tax year 2025 because assessed values in most areas of the state are not expected to
grow significantly between in 2024 and 2025. If property values were to spike in future years, the
cap could be much more constraining to local property tax revenue. Additionally, if property
values fell significantly in a future, the limit may make property tax revenue slower to rebound.
Local expenditures. The resolution conditionally increases workload and expenditures for local
governments to comply with the new limit. This includes determining the assessed values of
newly taxed and newly untaxed property, and increased election costs to the extent that local
districts
Technical Note
The property tax growth limit is determined in part by inflation and state population growth,
consistent with the state TABOR spending limit, but does not specify which year’s inflation rate
and population growth should be used to determine the property tax growth limit. The fiscal
note assumes that the property tax growth limit for property tax year 2025 will be determined
by growth in the state TABOR spending limit for FY 2024-25.
Effective Date
If approved by voters at the November 2024 general election, the changes take effect upon
proclamation of the Governor.
State and Local Government Contacts
Counties County Assessors Information Technology
Legislative Council Staff Local Affairs Property Tax Division
Secretary of State
The revenue and expenditure impacts in this fiscal note represent changes from current law under the bill for each
fiscal year. For additional information about fiscal notes, please visit the General Assembly website.