Taxpayers, and renters in particular, will lose thousands of dollars in TABOR refunds over the next decade if voters approve Proposition HH in November, a study released this week says.

The study from the Common Sense Institute comes on the heels of a poll from Magellan Strategies that said the more voters know about the property tax measure, the less they like it.

Polis’ property tax ballot measure is a toss-up, poll shows

The study was conducted by CSI Vice President Chris Brown and former Republican Rep. Lang Sias, who ran for lieutenant governor on the GOP ticket in 2018 and for state treasurer in 2022.

It found any property tax reduction would be outweighed by long-term state tax increases. Should Prop HH pass, the increase in property taxes will be slightly less, but taxpayers will lose $5,119 in TABOR refunds over the next 10 years.

Renters will be the biggest losers, the study says.

They won’t see any benefit from TABOR refunds that would be redirected to property owners and intended to slow the increase in property taxes. If Prop HH is approved by voters, property taxes will still go up, and that increase is likely to be passed along to renters, doubling the negative effect of the measure on renters.

Democratic lawmakers at the General Assembly sent Proposition HH to the ballot during the 2023 session as part of Senate Bill 303.

In signing the bill, Gov. Jared Polis earlier said the legislation — and the ballot measure that goes with it — will help people save money on property taxes, using the state’s record TABOR surplus, the result of a strong economy. The measure also has a “truth in taxation” policy, Polis said, one that caps property tax increases at the rate of inflation, although local jurisdictions could decide to ask voters to raise taxes above that limit.

This is “real relief for families all over the state,” Senate President Steve Fenberg, D-Boulder, one of the sponsors of SB 303, also said. Homeowners would see immediate savings, business and commercial property owners’ property taxes drop over the next decade, and critical services would be protected, he said.

And Rep. Mike Weissman, D-Aurora, one of the bill’s House sponsors, said the landlords who get property tax relief would pass those savings on to renters, although he didn’t provide evidence to back up this claim.

The ballot question will ask voters this November for permission to raise what’s called the Referendum C cap by 1% and keep that additional revenue for a 10-year period. That would generate about $167 million per year. That total would be funneled to local governments to hold them “harmless” from reductions in property tax revenue, as well as boost funding for K-12 education.

A companion measure, contained in House Bill 1311, will provide a one-time only equalized TABOR refund to taxpayers, should Proposition HH pass, giving each single filer $873, or $1,746 for joint filers.

If approved by voters, Proposition HH would make a temporary assessment rate reduction for residential property classes and reduce valuations — and the property taxes tied to those valuations — for owner-occupied, senior and multi-family housing by $50,000 in 2023, and by $40,000 from 2024 to 2032.

If voters rejected the measure, the TABOR refund in 2024 would be based on the state’s current six-tier refund mechanism, which is decided by income levels.

Taxpayers will pay more over the next 10 years if Prop HH passes, the study says. It does not “provide certainty or help to regulate the fluctuations in property taxes. A median priced home under current law would see a 42% tax increase from 2022 to 2023, and under Prop HH that same median average home still sees a large tax increase of 31%.”

The CSI study estimates 80% of the money retained under Prop HH would go to schools, rather than to backfill property tax losses anticipated by local governments.

A survey of county assessors show that property taxes have increased by about 40% for homeowners in the last two years.

Three issue committees have been formed to oppose Prop HH but have yet to report any contributions or expenditures. An issue committee in favor of Prop HH, Property Tax Relief Now, has raised more than $360,000, mostly from wealthy Democrats or organizations aligned with Democratic causes.

Deep-pocketed Democrats start spending to support Colorado’s Proposition HH