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Tax relief earns bipartisan praise — but party leaders differ on 2022 session’s true savings

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Tax relief earns bipartisan praise — but party leaders differ on 2022 session’s true savings

May 13, 2022 | 7:00 am ET
By Faith Miller
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Tax relief earns bipartisan praise — but party leaders differ on 2022 session’s true savings
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Senate President Steve Fenberg, a Boulder Democrat, speaks at a news conference May 12, 2022, at the Colorado State Capitol building. (Faith Miller/Colorado Newsline)

Gathered under a banner blaring the phrase “Moving Colorado Forward,” Gov. Jared Polis and Democrats in legislative leadership lauded what they described as groundbreaking accomplishments for Colorado families in the session that ended just before midnight on Wednesday. The bills they passed would put more money in the pockets of households and businesses, they said, at a time when record-breaking inflation is driving up the costs of basic necessities.

“It’s no secret that one of the biggest goals of Coloradans and of mine was to save people money,” Polis said at a Thursday morning news conference on the first floor of the Colorado Capitol building. The governor listed off bills passed this session to temporarily cut property taxes, send Colorado taxpayers early refund checks of $400 or more, reduce vehicle registration fees, and implement free, universal preschool in 2023.

Up in the House gallery half an hour later — at a subsequent news conference held by the House Republican minority caucus — perspectives differed on the session’s true savings for Coloradans.

GOP representatives said they would have liked to provide more savings for pandemic-challenged businesses and less regulation of the energy industry, which, they argued, would lead to higher costs. Democratic-led policies to regulate toxic air pollution and reduce greenhouse gas emissions from buildings passed in the last days of the session despite facing strong opposition from the GOP.

For months, both Republicans and Democrats in the state Legislature have said they wanted to pass legislation that saves Coloradans money. While they often disagreed on other policies, one bill brought the party leaders together: House Speaker Alec Garnett, a Denver Democrat, and House Minority Leader Hugh McKean, a Loveland Republican, both had high praise for the bill to temporarily cut property taxes over the next two years.

“My No. 1 priority this session (was) to bring down the cost of living in Colorado and make life more affordable, to help get money in the pockets of families across our state,” Garnett said at Democrats’ news conference. “And I can say without hesitation and without a doubt, that is what we did.”

Senate Bill 22-238, which passed by unanimous vote in the House on Friday, would temporarily reduce residential and commercial property tax assessment rates, providing $700 million in savings over two years for Colorado homeowners and businesses, about $200 million of which would come out of anticipated refunds that the state is constitutionally required to pay back to taxpayers in years when it sees large increases in revenue. An average homeowner of a $500,000 house will save $274 on their property tax bill next year.

The bill represented a compromise between state lawmakers, the Polis administration and Colorado Concern, a group of business executives that had been working to place a measure on the ballot asking voters to cap increases in a property’s taxable value at 3%. The measure could have cost local governments and school districts $1.3 billion, according to a state fiscal analysis. Colorado Concern withdrew its proposed ballot measure following the passage of SB-238, which includes money to partially backfill the revenue loss to local governments.

McKean described the property tax legislation as one way his caucus’ priorities came across in the bills passed this session.

“Property taxes for Coloradans are going to be reduced,” McKean said. “That’s a big deal.”

Catlin and McKean
Republican Rep. Marc Catlin of Montrose, left, listens while Minority Leader Hugh McKean, R-Loveland, speaks at a news conference May 12, 2022, at the Colorado State Capitol building. Rep. Mike Lynch, R-Wellington, stands to McKean’s right. (Faith Miller/Colorado Newsline)

But Rep. Colin Larson, a Littleton Republican, and some of his colleagues questioned the sincerity of the catchphrase of “saving people money” when repeated by Democrats throughout the session. The property tax relief should have been much larger, he said, and shouldn’t have taken money out of future tax refunds.

Larson and other Republicans also wanted to see more money paid back into the state’s Unemployment Insurance Trust Fund, which was depleted when unemployment rates soared during the pandemic. Colorado has a $1 billion unemployment insurance debt to the federal government as a result. The bill that lawmakers ended up passing to address the problem provided $600 million to return the UITF to solvency. That was enough to appease business groups, but it wasn’t enough to do away surcharges for employers that are required to help repay the debt.

“If we were in fact talking about real fiscal responsibility, really saving people money and saving small businesses money, we would have put enough money in (the UITF) to avoid the surcharge in and of itself and to get us back to solvency,” Larson said. “Instead, we had a $600 million payback, which … is not nothing, but it’s not as much as it should have been, especially in a year where we had as much money as we did.”

GOP wins changes in session’s last hours

Stall tactics from House Republicans in the final hours of the session, when hundreds of bills still remained on the table, gave the minority caucus significantly more leverage to pass its own priority bills and amendments. Assistant Minority Leader Tim Geitner, a Falcon Republican, mentioned a last-minute change that the GOP was able to make to Senate Bill 22-230, politically-charged legislation to allow county employees to engage in collective bargaining.

“We were successful in getting the things that we were hopeful in getting attached to that bill attached to that bill,” Geitner said. “That was A, starting with a timeline, because there really wasn’t a timeline.”

One last-minute amendment states that a board of county commissioners would have more time to fund the terms of a collective bargaining agreement. In any given year after SB-230 took effect, the amendment clarifies that a county finalizing its budget in December would not be obligated to fund a contract reached with an employees’ union that year — unless the agreement was reached before Oct. 15 and the union had been certified prior to June 1.

Republicans also won an amendment to exempt counties with populations below 7,500. The cost of collective bargaining rights, Geitner said, would be “a burden that they just can’t bear.”

SB-230, one of the most highly anticipated bills of the session, was originally envisioned as a means of granting a much wider swath of public employees the right to unionize. But Senate Majority Leader Steve Fenberg, the bill’s lead sponsor, still cast the legislation as a victory for “tens of thousands of county workers” on Thursday.

“We stood up for the working people of Colorado and invested in the folks that keep our economy running,” he said.

Universal preschool, plus more options for parents

Polis championed the law that laid the groundwork for universal preschool in Colorado, which he signed April 25 while declaring it would save families money. Under House Bill 22-1295, the no-cost preschool program funded through voter-approved taxes on tobacco and nicotine products will begin in fall 2023.

The state’s new Department of Early Childhood will select a local organization to coordinate preschool in each community, help families apply for programs and recruit preschools into the provider network. All Colorado children will be eligible for 10 hours of preschool per week at no cost to their parents the year before they start kindergarten.

HB22-1295 passed by a vote of 24-11 in the Senate and 43-19 in the House, along mostly party lines in both chambers. In the House, Larson, Mary Bradfield of Colorado Springs and Dan Woog of Erie were the only Republicans to vote “yes.” Sens. Dennis Hisey of Colorado Springs, Kevin Priola of Henderson, Cleave Simpson of Alamosa and Rob Woodward were the four GOP members who supported the bill in the Senate.

Meanwhile, a bipartisan group of lawmakers on the Senate Appropriations Committee killed a bill Tuesday to ban flavored nicotine products across the state. House Bill 22-1064 would have cost the state more than $46 million by July 1, 2025 — with much of that tax revenue tied to the universal preschool program, a key campaign promise for Polis.

Larson highlighted a bill he viewed as giving parents more choice in how to educate their children, another stated priority of the Republican caucus this session. That was Senate Bill 22-197 to codify “innovation school zones” that are governed by an organization separate from a school board. According to Chalkbeat, the bill would protect the existence of semi-autonomous schools in Denver that fall outside the purview of the Denver Public Schools board, and institute a dispute resolution process.

Despite being led by three Democrats from Denver — Sens. James Coleman and Chris Hansen, and Rep Jennifer Bacon — SB-197 passed the House Wednesday night with more Republican votes than Democratic ones, Larson pointed out.

“Because of Republican votes,” he said, “children in Denver will have their schools, their high-performing schools, continue to operate successfully with a high degree of autonomy.”