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J_COPT_2023A 12/20/2023 01:07:52 PM Committee Summary

PUBLIC
STAFF SUMMARY OF MEETING
JOINT 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
Introductions Committee Discussion Only
Overview of Commission Committee Discussion Only
Presentation, Division of Property Taxation Committee Discussion Only
Presentation, Legislative Council Staff Committee Discussion Only
Presentation, Henry Sobanet Committee Discussion Only
Selection of Facilitator Committee Discussion Only
Next 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


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


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


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.






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