SB21-293 was signed by the Governor on 23 Jun 2021, after being introduced on 2 Jun 2021. The Legislature can act quickly when it wants to increase its power.
So what’s the big deal, you ask.
But first, a clarification is in order for the terms ‘assessed value’ and ‘valuation rate’. Assessed value is the presumed market value of your real property whereas the valuation rate is that percentage which will be taxed.
Prior to the 2020 repeal of the ‘Gallagher’ amendment, Section 3(b) of Article 10, real property was divided into two classes—‘residential’ and ‘all other property’ except for oil and gas, agriculture and non-patented mines. The ‘all other property’ valuation rate was at a fixed rate of 29% of assessed value and residential was established at 21% but made flexible because of TABOR and other provisions of law. (This tax year that rate is 7.15% of residential property assessed value)
Now that ‘Gallagher’ is no longer, guess who sets the valuation rates. Yup, your esteemed legislators. The short version is this. This Act reduces, for two years, the valuation rates slightly. Want to guess what will happen after that? It also creates new subclasses of residential property. Again, want to guess what will happen with new categories and separate rates? You can read for yourself the full text of what they’re up to here.
Playing into this mix is Initiative 27, just approved for circulation in May, which is a much simpler bill if approved by the voters at the next election. It so worries the Legislature that they put a last minute amendment to SB21-293 to thwart this initiative, and admit to it in the amendment.
Soooo, what to expect down the road? HIGHER TAXES! Why? After the Legislature squanders the increased revenue from COVID, budget pressures will again apply. As you have seen this past spring, your assessed value has risen sharply—mine increased 30% and I don’t have the information sufficient to challenge. And you can bet the temporary reduction in the valuation rate will rise. Unless the taxing entities reduce the mill levy significantly, your real estate tax will increase.
End of story.