Results of the Proposition HH election: Voters reject the property tax proposal that would have supported funding for schools

Results of the Proposition HH election: Voters reject the property tax proposal that would have supported funding for schools
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Proposition HH, a Democratic attempt to reduce property taxes while increasing school funding, was soundly rejected by Colorado voters.

Both sides’ supporters appeared to have known how the vote would turn out, as the “no” campaign called their watch party a celebration one full day before the polls closed and the “yes” campaign held no watch parties at all.

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Proposition HH would have allowed the state to retain and spend more money from other taxes, like sales and income taxes, while simultaneously providing some relief from rising property taxes for homeowners and business owners. The majority of that additional funding would have gone toward supporting K–12 education in the state education fund. Therefore, following the next year, there would be less money available for taxpayer refunds.

“In the end, the public desired uncomplicated property tax reform; however, they devised a 48-page bill that eliminated TABOR reimbursements without providing adequate relief from property taxes,” stated Michael Fields, the president of Advance Colorado Action, who was instrumental in the opposition campaign.

Despite Gov. Jared Polis’s unwavering refusal to commit, the defeat has reignited calls for a special legislative session. An official expressed disappointment to voters through text message on Tuesday night, saying that Polis is thinking about what to do next.

Legislators must act by December to offer some form of relief from property taxes before homeowners and business owners are hit with a 40% increase in valuation. Reducing property taxes will consequently have an impact on financing for numerous other local districts, including schools.

“The governor can balance the budget and reduce the negative factor because of all these property tax dollars coming in,” Bell Policy Center President Scott Wasserman, a proponent of Proposition HH, said. “We have to make up for it if this money disappears.”

The over $10 billion Colorado lawmakers have withheld from K–12 schools since the beginning of the Great Recession in order to fund other budgetary priorities is the negative factor. Another name for this withholding is the budget stabilization factor. The Colorado budget proposal for the upcoming year is the first to fully fund schools since 2008. The last few years have seen an increase in local property taxes, which has made that possible. Increased local funding reduces the amount of state funding required to meet constitutional funding requirements.

The majority of the more than $2 million spent in support of Proposition HH came from education organizations, such as Democrats for Education Reform, the Colorado Education Association, and the Colorado Association of School Boards.

They believed that the additional funding Proposition HH would give schools would enable future funding increases or assist the state in avoiding budget cuts in the event of another recession. Additionally, they were concerned that failing to reduce property taxes would support Initiative 50, a proposal that Fields’ group has put on the ballot for 2024 and which would limit the increase in property taxes to 4% annually.

Initiative 50 was dubbed a “school district destroyer” by Wasserman.

However, Polis continuously avoided discussing how Proposition HH would affect school funding in favor of concentrating on property tax relief.

According to Wasserman, a more candid discussion might have helped the “yes” campaign.

“More comprehensive communication should have been had by all parties involved than just regarding property taxes,” he stated. “I believe the governor should have been more transparent with the public regarding the issue this was attempting to address.”

Property taxes support a wide range of essential local services, such as schools, libraries, and fire departments, according to Wasserman. Voters should consider how property tax relief may impact the amount of money allocated to these services.

Fields stated that if the legislature agrees to some kind of cap on future increases and offers more substantial relief from property taxes than was provided in Proposition HH, he will withdraw Initiative 50. He disagreed with the notion that capping future revenue would negatively impact school districts.

Prioritization is the key, Fields stated. “I believe that the state ought to be contributing more funds. In addition to providing full funding for schools, they ought to ensure that more funds are allocated to the classroom.

Colorado’s state determines the amount of funding allocated to schools using a formula. Any amount not covered by local property taxes is reimbursed by the state. This implies that changes to property taxes will have a significant impact on the state budget. Higher education is crowded out by K–12 education, which consumes more than a third of the general fund and has difficulty meeting the state’s constitutional funding obligations.

At the same time, rural school districts in Colorado offer some of the lowest starting salaries in the nation, and the state finances its schools less than the national average.

Voters in Colorado have consistently rejected attempts to raise state taxes in order to fund public schools more fully or to allow the state to retain and increase the amount of money collected from current taxes.

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