HomeMy WebLinkAboutMemo - Mail Packet - 9/12/2023 - Memorandum From Ginny Sawyer Re: Information On Prop Hh
City Manager’s Office
City Hall
300 LaPorte Ave.
PO Box 580
Fort Collins, CO 80522
970.221.6505
970.224.6107 - fax
fcgov.com
MEMORANDUM
Date: September 7, 2023
To: Mayor and City Council
From: Ginny Sawyer, Policy and Project Manager
Thru: Kelly DiMartino, City Manager
Tyler Marr, Deputy City Manager
RE: Information on Prop HH
Please see the provided information from Bowditch and Cassell.
Summary of Proposition HH
August 22, 2023
This is a high level summary of the primary components of Proposition HH, which will be on the
2023 statewide ballot. All provisions are statutory in nature. For more detailed information, please
consult the fiscal note to SB 23-303 or Legislative Council“ blue book” that will be mailed to voters
in September.
Primary components of Proposition HH:
Assessment Rates/Taxable Values. Decreases assessment rates and taxable values
for residential and nonresidential property owners. For owner-occupied primary
residences, the assessment rates will decrease as shown below:
Owner Occupied Primary Residences – Assessment Rates and Exemptions
2023 2024 2025-2032 2033 and After
Current Law
6.765%
after $15,000
reduction 6.976% 7.15% 7.15%
Under Prop HH
6.7%
after $50,000
reduction
6.7%
after $40,000
reduction
6.7%
after $40,000
reduction 7.15%*
*The assessment rate for owner-occupied primary residences may remain at 6.7
percent in 2033 and after under certain circumstances.
Note – For 2023, the changes under HH apply to all residential properties; beginning
2024, HH creates a new category of Owner Occupied Primary Residences and that is
what is reflected above. There are other changes for senior owner-occupied, other
multifamily residences, and commercial property tax categories as well.
So, for the “average” homeowner, using the statewide average of 69 mills: if you own a
$500,000 home, your taxes will decrease by an average of $221/year for 2023 tax year.
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A homeowner owning a $1.5 million home will have property taxes decrease by $275/year
for 2023 tax year.
TABOR Limit. Allows the state to retain money that otherwise would be refunded by
TABOR for ten years, and the legislature can extend that by legislation, without another
ballot vote. The TABOR revenue limit is inflation plus population growth, and Prop HH
adds an additional 1.0 percent to the calculation. This limit will grow each year, so that by
FY 2031-32 the state would be collecting an additional estimated $2.2 billion not subject
to TABOR. With these additional retained revenues, they will backfill local governments
to varying degrees (those below a property tax revenue threshold), allocate funding for
rental assistance, and allocate money to the State Education Fund for K-12 education.
TABOR refunds for all taxpayers will decrease if the state’s TABOR revenue limit
increases.
TABOR Refunds. Just for 2023, if Prop HH passes all TABOR refunds will be equalized
at approximately $820. Equalizing TABOR refunds helps lower income earners. If you
make $50,000, your refund will increase by $233; if you make $275,000, your refund will
decrease by $1,000.
Senior Homestead Exemption. Beginning in January 2025, allows the Senior
Homestead Exemption to be portable once seniors qualify for the exemption. In other
words, once qualified, you can sell your home and move to a different residence and retain
the exemption.
Local Government Revenue Cap. Creates a property tax revenue cap for local
governments, excluding home-rule cities and counties and all school districts. Districts
can adopt resolutions to exceed the cap. This is in addition to the existing local
government limits imposed by TABOR and the statutory 5.5% cap.
Summary
Prop HH will provide limited property tax reductions for homeowners, taxpayers will be foregoing
some portion of their future TABOR refunds, and K-12 education should see a steady stream of
new revenues whenever state revenues are increasing. A downturn economy would change
those projections.
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