Colorado voters will be asked in November to make changes to property taxes and tobacco taxes

The Colorado State Legislature referred two ballot measures concerning taxes and state revenue to the Nov. 2023 ballot before adjourning the legislative session on May 8.

Ballot initiatives on the ballot in Colorado during odd-numbered years are limited to topics concerning taxes or state fiscal matters under TABOR, the Taxpayer’s Bill of Rights. This includes proposals for new taxes, tax increases, and changes related to taxes that result in a net gain in tax revenue. When voters approve a measure allowing the state to increase taxes and retain revenue, the estimated revenue is included in the ballot title and ballot information booklet. In some cases, the actual revenue the state receives is higher than the estimate, and thus, is higher than the amount voters initially approved. In this case, the state must ask voters whether the revenue may be retained and spent or refunded.

One measure, Proposition HH, would reduce property tax rates and allow the state to retain and spend revenues that would otherwise be refunded to residents under TABOR. Proposition HH would allocate this revenue to local governments for the purpose of making up lost tax revenues from the property tax rate reduction.

Proposition HH would create a limit on local government property tax revenue unless the district adopts a resolution or ordinance to exceed the limit. This wouldn’t apply to school districts and home-rule cities and counties. In order to exceed the local property tax revenue limit, a district would need to provide notice, conduct public hearings, and hear public testimony. Without following those steps, the local government would be required to refund the revenue above the limit to taxpayers. Annual growth in property tax revenue could not exceed the rate of inflation in the Denver-Aurora-Lakewood Consumer Price Index.

The measure would make other changes to property tax law and create a Proposition HH Cap on state revenue, similar to the Proposition C cap, which authorized the state to permanently retain and spend revenue up to a cap, referred to as the Referendum C cap (equaling FY 2007-08 revenues adjusted by inflation plus population growth), beginning in FY 2010-11.

Voters will also decide on a measure that would ask voters to allow the state to retain and spend revenue the state received above the estimated revenue generated from increased taxes on cigarettes and tobacco and nicotine products from Proposition EE. Otherwise, the state would refund $23.65 million to distributors and wholesalers and reduce the tobacco tax rate by 11.53%.

Since 1992, when TABOR was adopted, through 2022, Colorado voters have decided on 27 statewide ballot measures that would have increased revenue for the state, which required voter approval under TABOR.

  • Eight measures asked voters if the state could retain revenue as a voter-approved revenue change that would have otherwise been refunded to taxpayers under TABOR;
  • Five measures asked voters to adopt a new tax;
  • Two measures asked voters to eliminate a tax exemption (thereby raising state revenue);
  • One measure asked voters to reduce income tax deduction amounts;
  • Nine measures asked voters to adopt a tax increase;
  • One measure asked voters to adopt a tax increase and new tax; and
  • One measure asked voters to adopt a tax increase and eliminate a tax exemption.

Eight (29.6%) of the 27 measures were approved while 19 (70.3%) were defeated.

The state Legislature also approved a constitutional amendment, which will appear on the ballot in 2024, to create an independent judicial discipline adjudicative board and create rules for the judicial discipline process.

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