Proposition HH, also known as the Property Tax Changes and Revenue Change Measure, will appear on Colorado’s general election ballot this November. Prop. HH, if enacted, would limit assessed values in order to provide property tax relief, a seemingly pro-taxpayer cause. Prop. HH, however, is a wolf in sheep’s clothing.
Though it may provide property tax relief for some, passage of Prop. HH would lead to a much higher overall state tax burden in the long-run. In an article published last week on Forbes.com, ATR’s Patrick Gleason explains how Governor Polis has taken contradictory positions by supporting Proposition HH. That’s because Proposition HH hinders the ability to phase out the state income tax using surplus revenue, which is Polis’s stated position.
The real purposes of Proposition HH is not to reduce property tax burdens, but to attack Colorado’s Taxpayer’s Bill of Rights (TABOR). TABOR, a constitutional amendment approved in 1992, caps the rise in government spending at the rate of population growth plus inflation. Revenue collections beyond the limit allowed by TABOR must be refunded to taxpayers.
TABOR has been key to Colorado’s economic success for the past three decades and has helped keep tax rates relatively low and prevented the Democrat-run legislature from raising taxes like their counterparts in other blue states have done. Colorado was one of only five states that kept the growth rate of state spending over the past decade below the rate of population growth plus inflation.
Proposition HH would put a stop to the taxpayer refunds required under TABOR, gutting its ability to serve as an effective spending cap moving forward. If Prop. HH is enacted, revenue collections in excess of the TABOR limit, rather than go back to taxpayers, would be distributed to local government officials to spend.
For these reasons, Americans for Tax Reform is urging Colorado voters to reject Prop. HH, which is a misleading effort to destroy the nation’s strongest spending cap and taxpayer protection measure.