Colorado Property Tax Reduction for Senior Citizens, Referendum A (2000)
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Text of measure
The language that appeared on the ballot:
Legislative Constitutional Amendment Analysis by Colorado Legislative Council: reduces property taxes for qualified senior citizens by exempting up to one-half, but not to exceed $100,000, of the value of a home from property taxation; makes the property tax reduction available to persons 65 years of age or older who have owned and lived in their homes for the preceding ten years; requires the state to reimburse local governments for any property tax revenue reduction resulting from this proposal; and excludes the state reimbursement to local governments from state and local revenue and spending limits.
Background and Provisions of the Proposal: In Colorado, property taxes fund local government services, such as schools, police, fire protection, and recreation facilities. This proposal lowers property taxes for qualified senior citizens by subtracting a portion of a home's value to determine the amount of property taxes owed. The portion of a home's value that is subtracted or exempted to reduce property taxes is referred to as a homestead exemption.
Property tax reduction. Homeowners pay property taxes based on the value of their home and the tax rate set by the local governments where they live. This proposal reduces the taxable value of a home by one-half of the first $200,000 of a home's value, thereby lowering property taxes for those who qualify. Homeowners with homes valued at $200,000 and under receive the largest percentage tax reduction. The percentage reduction in property taxes decreases as the home value increases above $200,000. The dollar amount of the tax reduction will vary depending upon the local property tax rate. The state legislature can adjust the $200,000 cap on the home value to either increase or decrease the benefit from the homestead exemption in future years.
Impact of the proposal. This proposal affects property taxes paid beginning in 2003. About 107,700 homes are expected to qualify for the property tax reduction, and the average property tax savings for those who qualify will be about $410. The total reduction in property taxes is estimated to be about $44 million in the first year, which amounts to about 1.4 percent of all property taxes collected. The state is required to reimburse all local governments for the reduction in property tax revenue resulting from the proposal.
Excess state revenues. The state constitution limits most of the money that the state can collect each year to inflation plus the percentage change in state population. Money above this limit must be refunded to taxpayers unless the voters allow the state to keep and spend the excess state revenue. For the purpose of reimbursing local governments, this proposal asks the voters to allow the state to refund $44 million less in the first year. This amount would increase by about $2.3 million each year thereafter. Under current law, if there is excess revenue, the proposal would reduce the average first year tax refund by approximately $15 per taxpayer or $30 for a married couple. The reduction in the tax refund would increase slightly each year thereafter.