The November 2023 election is quickly approaching and brings with it another round of tax—particularly property tax measures—that will soon be put to Colorado voters. And, if what has already been filed is any indication, Coloradans will be voting on even more tax measures in 2024.
2023 Statewide Ballot Initiatives
Statewide ballot initiatives in odd-year elections, such as the upcoming 2023 election, are limited to matters arising under Article X, Section 20 of the Colorado Constitution, which is commonly referred to as TABOR or the Taxpayer’s Bill of Rights. This year, Coloradans will vote on two statewide measures implicating TABOR: Proposition II and Proposition HH. Both measures were referred by the Colorado General Assembly, meaning the measures passed an initial vote by both houses of Colorado’s legislature. However, because both measures would increase the amount of tax revenue the state could retain, TABOR requires that they be put before Colorado voters and approved before any changes in the law are made.
Proposition II asks voters to decide whether the state should either: (1) retain and spend the $23.65 million in revenue collected from cigarettes, tobacco and nicotine products to invest and enhance Colorado preschool programs (i.e., a “yes” vote); or (2) refund the revenue to cigarette wholesalers, tobacco and nicotine distributors, and taxpayers (i.e., a “no” vote). If passed, Proposition II would provide additional funding for free preschool for Colorado families, allowing thousands more children access to educational programming before entering kindergarten.
Proposition II is an initiative stemming from a 2020 measure approved by 67.56% of voters called Proposition EE. This proposition approved taxing certain nicotine products to fund public schools, housing initiatives and Colorado preschool programming. The measure was expected to generate $176 million in the 2021-22 fiscal year, but has thus far greatly exceeded this estimate. Because TABOR requires that revenue collected from tax beyond the original estimate be refunded to taxpayers, Proposition II is on the ballot.
To date, supporters of Proposition II have spent over $255,000 in support of the initiative. There are no official opponents of the measure.
Proposition HH is the second statewide measure on the ballot and has proved to be a hot-button issue for the 2023 election. If passed, the initiative would make several changes to state property taxes and state revenue limits. Specifically, the measure would reduce residential property tax assessment rates and provide funding to local governments to make up for decreased property tax revenues. Taxpayer refunds, though, would decrease under TABOR, and the state would retain revenue in excess of the current limit—currently known as Referendum C. The proposed new limit—known as the Proposition HH cap—would be calculated in a similar fashion to the current cap, but with an additional growth factor of one percentage point each year. Revenue generated up to the new cap would then be used to fund local governments and state education.
Proposition HH has wide support among Colorado Democrats, including Gov. Polis. If passed, the measure would allow Colorado to retain more revenue, which would then be used to fund public schools, fire districts, libraries and other essential government services. Opponents of the measure argue that the loss to taxpayers from the reduction in TABOR refunds likely exceeds the property tax savings and is also costly for renters who do not directly benefit from the property tax relief and will receive lower TABOR refunds. Thus far, supporters have spent over $810,000, while opponents have spent close to $1,600,000 in opposition.
While these proposed measures have generated much interest, it is worth noting that since 1999, odd-year statewide ballot measures have less than a 36% success rate.
What’s On Deck for 2024
The groundwork is also being laid for the 2024 election cycle. Currently, there are four citizen-initiated ballot measures that have been approved for circulation of signatures. Once again, tax-reduction measures are front and center. At least several of these measures appear to be a direct reaction to Proposition HH.
Initiative No. 21 seeks to amend the Colorado Constitution and statutory law to limit the annual increase in the amount of revenue collected on a property to no more than 3% unless the property has been substantially improved, in which case the property’s actual value must be reappraised. This measure would lock in lower property taxes, while not making up the lost revenue for state and local government.
Initiative No. 22, which is led by the same proponents as Initiative No. 21, seeks to reduce various sales taxes through 2025 and 2026. Specifically, the measure would reduce the sales and use tax from 2.9% to 2.89%, thereby reducing the General Fund revenue by an estimated $17.7 million in fiscal year 2024–2025. According to the initiative’s fiscal summary, if passed, some taxpayers will have more after-tax income, but local government budgets will be adversely impacted.
Continuing with the theme of tax rate reductions, Initiative No. 31 is a proposed statutory amendment that would reduce taxes on individual and corporate federal taxable income from 4.40% to 4.35%. Jon Caldera and Ben Murrey of the Independence Institute are the proponents of this initiative. Coloradans have passed similar measures to Initiatives No. 21 and No. 31 in the past, and it is unclear how low is too low for Colorado voters when it comes to various tax rates.
The final citizen-initiated ballot measure already approved for circulation is Initiative No. 50, which if passed, would require voter approval for government retention of property tax revenue if the total revenue is projected to increase by more than 4%. In Colorado, property tax revenue funds county government, public schools, junior colleges and special districts. Colorado has not had a statewide property tax since 1964. Opponents of the measure, which include the Bell Policy Center, argue that setting hard caps on property taxes puts local communities in the hands of voters from very different regions in Colorado and could potentially lead to inequitable results.
Several other initiatives for the 2024 election cycle—while not yet approved for circulation—continue to move forward. They include hot-button social issues related to education, abortion, criminal justice and parental rights.
Colorado ballots will be mailed to registered voters from Oct. 16–20. But it is not too late to register to vote. Through Oct. 30, Coloradans can register to vote at GoVoteColorado.gov. And after that, individuals can register in person until 7 p.m. on Election Day, Nov. 7, 2023. Over 400 drop boxes and 350 voting centers will be available for voters by Oct. 23. More information about locations, opening dates and hours can be found at GoVoteColorado.gov.
For more detailed information on the Colorado election cycle and Colorado’s ballot initiatives, visit our comprehensive online ballot tracker. For additional information and the full text of the measures, visit the Colorado Secretary of State’s website.
THIS DOCUMENT IS INTENDED TO PROVIDE YOU WITH GENERAL INFORMATION REGARDING Colorado ballot measures in 2023 and 2024. THE CONTENTS OF THIS DOCUMENT ARE NOT INTENDED TO PROVIDE SPECIFIC LEGAL ADVICE. IF YOU HAVE ANY QUESTIONS ABOUT THE CONTENTS OF THIS DOCUMENT OR IF YOU NEED LEGAL ADVICE AS TO AN ISSUE, PLEASE CONTACT THE ATTORNEYS LISTED OR YOUR REGULAR BROWNSTEIN HYATT FARBER SCHRECK, LLP ATTORNEY. THIS COMMUNICATION MAY BE CONSIDERED ADVERTISING IN SOME JURISDICTIONS.