J_COPT_2023A 12/20/2023 01:07:52 PM Committee Summary PUBLICSTAFF SUMMARY OF MEETINGJOINT COMMITTEE COMMITTEE ON COMMISSION ON PROPERTY TAX Date 12/20/2023 Attendance Baisley X Jonathan Cappelli X Guyleen Castriotta X deGruy Kennedy X Cody Davis X Brenda Dones X Sean Doughrety X Frizell X Loren Furman X JoAnn Groff X Brett Johnson X Lori Laske X Bob Olme X Tamara Pogue X Chris Richardson X Ann Terry X Kevin Vick X Andy Kerr (Vice Chair) X Hansen X Time 01:07:52 PM to 04:04:07 PM Place Old State Library This Meeting was called to order by Hansen This Report was prepared by Adam Alemzada Hearing Items Action Taken hIntroductions Committee Discussion Only hOverview of Commission Committee Discussion Only hPresentation, Division of Property Taxation Committee Discussion Only hPresentation, Legislative Council Staff Committee Discussion Only hPresentation, Henry Sobanet Committee Discussion Only hSelection of Facilitator Committee Discussion Only hNext Steps Committee Discussion Only Introductions - Committee Discussion Only 01:07:54 PM Senator Hansen, Chair, called the committee to order and went over the agenda for the hearing. Commissioner Andy Kerr, Vice Chair, gave opening remarks. Overview of Commission - Committee Discussion Only 01:12:42 PM Matt Becker and Greg Sobetski, Legislative Council Staff, provided background information on the creation and purpose of the committee. 01:15:27 PM Mr. Sobetski discussed the role of fiscal analysts within LCS. 01:18:00 PM Jason Gelender and Pierce Lively, Office of Legislative Legal Services, introduced themselves and explained how OLLS can assist the commission with their work. 01:20:43 PM Mr. Gelender responded to questions from the commission on the deadlines for initiatives. Presentation, Division of Property Taxation - Committee Discussion Only Attachment Tag File Name Attachment A http://www2.leg.state.co.us/CLICS/CLICS2023A/commsumm.nsf/0/AE6980CB4D73...$File/Attachment A.pdf?OpenElement Attachment A.pdf 01:24:20 PM Tony Werckman and Lori DeCrow, Division of Property Taxation (DPT), gave a presentation on property taxes in Colorado. Their presentation can be found in Attachment A and here: https://leg.colorado.gov/sites/default/files/images/committees/tax_commission_presentation_-_dola_-_final.pdf 01:26:11 PM Mr. Werckman explained the legal basis for property taxation, which includes the state constitution, statutory law, and case law. He discussed the Gallagher Amendment's passage and repeal. 01:35:22 PM Mr. Weckman discussed the Taxpayer Bill of Rights (TABOR) and its role in property tax legislation. He explained that TABOR requires voter approval for any legislation that increases taxes, including property taxes. 01:41:31 PM Mr. Wreckman discussed all the legislation that passed between 2021 and 2023 that impacted property taxes. 01:43:28 PM Ms. DeCrow discussed the terminology and procedures used by DPT in property valuation. 01:46:05 PM Ms. DeCrow went over the ten property classes used by DPT and the current assessment rates for different property classes. She explained how property value is calculated and how property values can be appealed by homeowners. She also explained that there has been a rise of property value appeals in 2023 as a result of increasing property taxes. 01:54:39 PM Mr. Wreckman and Ms. DeCrow responded to questions from the commission on property tax appeals and exemptions. Presentation, Legislative Council Staff - Committee Discussion Only Attachment Tag File Name Attachment B http://www2.leg.state.co.us/CLICS/CLICS2023A/commsumm.nsf/0/CD79CB2103D9...$File/Attachment B.pdf?OpenElement Attachment B.pdf 01:58:23 PM Mr. Sobetski and David Hansen, LCS, gave a presentation on the state's property tax outlook. Their presentation can be found in Attachment B and here: https://leg.colorado.gov/sites/default/files/images/committees/lcs_presentation_to_commission_on_property_taxation_-_12-20-2023.pdf 02:02:20 PM Mr. Sobetski explained that current property values are based on market conditions from June 30, 2022 due to how market timing values are used in the property tax equation. He also explained how the rapid increase in home values caused the rapid increase in property taxes. 02:11:35 PM Mr. Sobetski and Mr. Hansen responded to questions from the commission on the future of the housing market and on the areas of the state that are facing higher property tax increases. 02:20:29 PM Mr. Sobetski discussed how recent legislation has affected the use of assessment rates. 02:24:47 PM Mr. Sobetski explained that the evolving policy environment makes the data on property taxes and values less reliable. 02:26:59 PM Mr. Hansen discussed the economic forecast for actual and assessed property values in 2024 and 2025. 02:33:25 PM Mr. Hansen and Mr. Sobetski responded to questions from the commission on the discrepancy between actual and assessed value predictions for 2024. 02:39:37 PM Mr. Sobetski discussed the role of mill levies in property tax calculations and how mills are a very localized factor. Presentation, Henry Sobanet - Committee Discussion Only Attachment Tag File Name Attachment C http://www2.leg.state.co.us/CLICS/CLICS2023A/commsumm.nsf/0/470BA263DB49...$File/Attachment C.pdf?OpenElement Attachment C.pdf 02:47:30 PM The committee recessed. 02:58:33 PM The committee reconvened. 02:58:53 PM Henry Sobanet, Senior Vice Chancellor for Administration & Government Relations, Colorado State University, gave a presentation on property taxes. Their presentation can be found in Attachment C and here: https://leg.colorado.gov/sites/default/files/images/committees/henry_sobanet.pdf 03:01:22 PM Mr. Sobanet discussed how property taxes impact things like local control and sufficient school funding. He explained that lowering property taxes benefits homeowners financially, but detriments other things such as new developments and school funding. 03:06:40 PM Mr. Sobanet explained that Colorado has had low residential property taxes and high business property taxes compared to other states, which was caused by the Gallagher Amendment, TABOR, and Amendment 23. 03:09:22 PM Mr. Sobanet discussed the revenue history of the state's General Fund and how low property taxes have reduced the ability of local government's to fund schools. 03:16:15 PM Mr. Sobanet gave an overview of mechanisms that state and local government can use to impact property taxes. There mechanisms include assessment rates, mill levies, caps, time-limited plans, and smoothing. He responded to questions from the commission on examples of other states who have used smoothing and time-limited plans to address property taxes. 03:22:05 PM Mr. Sobanet responded to questions from the commission on the efficacy of the current school finance model and whether their is an alternative to using assessesd values for determining how much each homeowner is taxed. 03:33:35 PM Mr. Sobanet responded to questions from the commission on the correlation between the local share for school funding and the amount of revenue that local governments can collect. 03:36:11 PM Mr. Sobanet responded to questions from the commission on whether it would be possible to remove local governments from the property tax process and have the state take on a bigger role. Selection of Facilitator - Committee Discussion Only 03:43:48 PM Senator Hansen went over the two applicants for facilitators, Keystone Policy Center and Confluence Policy & Strategy Group. Commission discussion ensued. 03:58:40 PM Motion Select Keystone Policy Center to be the facilitator of the Commission on Property Tax. Moved Cody Davis Seconded Baisley Yes Jonathan Cappelli Yes Guyleen Castriotta Yes deGruy Kennedy Yes Cody Davis Yes Brenda Dones Yes Sean Doughrety Yes Frizell Yes Loren Furman Yes JoAnn Groff Yes Brett Johnson Yes Lori Laske Yes Bob Olme Yes Tamara Pogue Yes Chris Richardson Yes Ann Terry Yes Kevin Vick Yes Andy Kerr (Vice Chair) Yes Hansen Yes YES: 19 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS Next Steps - Committee Discussion Only 03:58:59 PM The commission discussed future meeting dates. They agreed to meet at on January 5, January 19, February 9, February 23, March 8, and March 15. 04:04:07 PM The committee adjourned.
