After a snap special session this past weekend in which Colorado lawmakers passed legislation to blunt the rise in property taxes and expand assistance to low-income families and renters, Summit County leaders are facing further complications in their path to passing a 2024 budget. 

With the failure of Proposition HH — state Democrats’ proposed remedy to lower property tax bills next year — Gov. Jared Polis tasked legislators with finding a short-term solution. They delivered in the form of several bills that were signed into law, one of which provides $430 million in total property tax reductions to homeowners statewide. 

That legislation preserved some of Proposition HH’s key components, including a reduction of the statewide assessment rate to 6.7% from 6.765% and the ability for homeowners to exempt $55,000 of their home’s value from taxation (up from $50,000 under HH). Lawmakers estimate it will shave potentially hundreds of dollars off property owners’ tax bills in 2024, though they will still see an increase over this year because of a spike in home valuations. 

But unlike HH, which was proposed as a 10-year plan that would’ve tapped into taxpayer refunds to help backfill schools, fire districts and other local taxing entities for the loss in revenue, the new law will only be in effect for next year and instead uses general fund money to offset the tax cuts. It does not provide a backfill to counties like Summit. 

“Obviously, it changes our budget. It changes the amount of property tax revenue that we have available,” said county Finance Director David Reynolds, during a Tuesday, Nov. 21, Summit Board of County Commissioners meeting that came one day after the special session ended. 

Of the total property tax revenue generated in the county, roughly one-third goes to the county government, while another third goes to the Summit School District and the rest goes to other taxing authorities such as Summit Fire & EMS and Colorado Mountain College.

Next year, the county’s share is projected to be about $66.9 million, roughly $3 million less than what was initially estimated before state tax changes. Still, it represents just under $19 million in new revenue. 

Spending has also increased, and county officials have stressed that much of those revenue gains will be offset by inflation, which has driven up the cost of everything from equipment to asphalt to staffing. 

That’s likely to be most felt in the county’s general fund, the county’s largest account that pays for public safety, human services and a slew of county departments. That fund is projected to net about $6 million in additional property tax revenue in 2024, yet officials say it may lose more than $4 million due to the incorporation of Keystone. 

“I am deeply concerned about our general fund. Six million dollars to our general fund does not cover the price of inflation,” said Commissioner Tamara Pogue, adding it will have to force the county to think about how it provides further property tax relief, if at all. 

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In an initial draft proposal released last month, officials included an average 4.4% reduction in county mill levies as a way to help blunt homeowners’ taxes. A mill is a $1 payment on every $1,000 of assessed value that generates revenue for fire and water districts, local governments, and schools, among other entities. 

A majority of the county’s mills are voter-approved for specific funds such as affordable housing and the Strong Future Fund, which provides tax funding for childhood care, behavioral health, fire mitigation, recycling and public infrastructure programs. Less than one-third of the county’s total mill levies goes to the general fund. 

Pogue said she feels “quite strongly at this point that we cannot allow any mill levy float of our general fund,” adding, “I think that would be irresponsible on behalf of the county as a whole.” 

Pogue said she would be willing to discuss mill levy float to voter approved initiatives, such as Strong Future, but she and other commissioners also said that could mean more cuts to services in exchange for little tax relief. 

Because other taxing entities, with the exception of Colorado Mountain College, are not planning to lower their mill levies, county officials said their reduction won’t add up to much for homeowners. According to a projection from Reynolds, a 4.4% average mill levy reduction would translate to about $22 in property tax relief on a $1.1 million home. By comparison, the state’s new property tax law could generate about $199 in relief for that same home. 

Commissioner Nina Waters said while the state legislature also passed bills aimed at lower-income Coloradans, such as an expansion of a tax credit for low-income families and more money for rental assistance, she voiced concerns about the county providing tax relief “on the backs of people who really need what we’re providing with those funds.” 

Waters continued: “I think that what the property owners asked for is a reduction in property tax. It feels to me that the state has provided that. I question whether or not we need to continue to provide anymore.” 

Commissioner Elisabeth Lawrence said she agreed. 

Reynolds said he had “heard the comments loud and clear” and that his team would continue its budget work as commissioners mull what to do with certain mill levies. 

While local governments originally had a Dec. 15 deadline to pass their budgets, that has been extended to Jan. 10 under the new property tax law.