Education groups support Proposition HH while conservative groups, government groups oppose

October 4, 2023

The campaigns battling over Proposition HH have entered the homestretch on relatively equal financial footing as the property tax relief ballot measure faces growing opposition from local governments and business groups.

The question, pitched by Gov. Jared Polis and fellow Democrats in the legislature to deal with expected tax hikes next year due to rising property values, is the biggest measure on Colorado’s ballot this fall. It’s drawing backing from liberal groups and unions as well as the AARP and the League of Women Voters.

But the complex measure’s potential impact on local property tax revenue, and next year’s state tax refunds, has drawn fire from the Colorado Municipal League, the National Federation of Independent Business and other groups. The CML represents the interests of cities and towns across the state.

That gives the conservative campaign leading the fight more ammunition as it attempts to defeat Proposition HH, putting state officials on the defensive.

Ballots for the Nov. 7 election will be mailed out by county clerks beginning Oct. 16.

Supporters reported about $854,000 in cash on hand to close out September, according to campaign finance reports due Tuesday. The Property Tax Relief Now committee has raised about $1.1 million total, largely from education organizations, Democratic donor Pat Stryker and the advocacy wing of the nonprofit Gary Community Ventures, a philanthropic organization formerly led by Denver Mayor Mike Johnston.

The major opposition group reported about $833,000 in the bank, out of $1.6 million raised in total. Most of its money, $1 million, has come from Advance Colorado, a nonprofit that backs conservative fiscal policy. Michael Fields, who leads the Advance Colorado Institute, also is the registered agent for the opposition group.

During the most recent reporting period, Sept. 14-27, the supporting committee reported raising about $325,000, nearly all from education groups. The No on HH committee brought in $500,000 from Advance Colorado, as well as a handful of small-dollar donations.

No on HH has spent more so far, including more than $500,000 on digital advertising just before the recent reporting deadline. The proponents, meanwhile, have not reported much spending yet — though that is sure to change as voters start flipping through Blue Books and receiving ballots in the mail.

Much of the money on both sides has come from organizations that aren’t required to disclose individual donors, keeping some sources hidden from public view.

The rundown on Prop HH

Proposition HH seeks to blunt the sharpest spikes in property taxes that are expected next year while giving local governments money to make up for property tax revenue they’d miss out on.

To pay for it, the measure would increase the cap on tax collections imposed by the Taxpayer’s Bill of Rights by 1 percentage point each year. That would increase the state’s budget by about $170 million this year — and up to $2.2 billion per year in a decade.

State officials would use up to 20% of the extra money to backfill the local governments for lost property tax revenue, and they would set aside up to $20 million for rental assistance programs to help residents who aren’t homeowners.

The remainder would go directly to school districts, to offset their lost property tax revenue, and to other education programs — totaling $125 million this upcoming fiscal year and potentially more than $2.1 billion a year within a decade, according to projections.

In another progressive tweak, lawmakers also incorporated into the proposal a one-time flattening of refunds that are due to taxpayers next year under TABOR. If voters pass Prop HH, all taxpayers would receive an estimated refund of $898, according to the Blue Book, versus the typical income-based refunds that send more money to wealthier Coloradans under the premise they paid more in taxes.

Battling campaign messages

Senate President Steve Fenberg highlighted the stakes of Prop HH in a statement provided by the supporting committee.

“Influential organizations … are rallying behind HH because they understand that a 40% (property) tax increase would be devastating for our economy, and especially for seniors, working families, and renters,” Fenberg said. “Proposition HH averts this crisis while also ensuring local schools, fire districts, and communities aren’t harmed — all while preserving TABOR refunds for the future.”

But it’s the future of TABOR that has raised conservatives’ ire.

Opponents argue Prop HH would be a tax increase, since it allows the state to retain more money. Under the direst of predictions, they say it would effectively erase state refunds over the next decade — and savings on property taxes wouldn’t make up the difference.

“The ballot language completely hides the fact that Prop HH would eventually end TABOR tax refunds permanently,” Fields, from the No on HH campaign, wrote in a text message. “The more voters hear about this measure, the worse it does. So we are working hard to make sure everyone hears about it.”

The ballot measure’s long-term effects on TABOR refunds and Coloradans’ overall finances have been a point of much consternation among backers and opponents.

The Colorado Fiscal Institute, a liberal policy think tank that recently endorsed the proposal, found that taxpayers could still expect hundreds of dollars’ worth of TABOR refunds per year on average through the next decade.

Other supporters include the AFL-CIO, the Colorado Professional Firefighters and ProgressNow Colorado.

“Hardworking Colorado families and vulnerable seniors who are on the brink are most at risk if we don’t pass Prop HH,” Beth Hendrix, executive director of the League of Women Voters of Colorado, said in a statement, calling it “the most responsible solution” to property tax increases.

Groups that have come out against Prop HH include the Colorado Association of Realtors and the Colorado Special District Association.

Ann Terry, executive director of the Special District Association, called the measure “too complicated” in an interview, even if it contains some relief elements her group might otherwise be able to support. But it “was not thought out and presented to stakeholders in a way where we would be able to understand its current impact and long-term impact,” she said.

If the proposition passes, Terry said, there is wide concern that local governments and special districts won’t be fully reimbursed for tax revenue they would otherwise collect.

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Education groups support Proposition HH while conservative groups, government groups oppose

The rundown on Prop HH

Battling campaign messages

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