How Colorado’s Proposition HH, a complex property tax fix, became ballot box poison

Proposition HH, the marquee measure of Colorado’s 2023 election season that had backing from the state’s top Democratic leaders, fell in a fashion as ugly as any in recent years.

The nearly 19-percentage-point shellacking suffered by the property tax ballot measure Tuesday left policymakers scrambling for a backup plan and spurred Gov. Jared Polis to call the first special session since the pandemic.

It also raised the question: How does a measure aimed at tax relief, albeit while attempting so much more, fall hard before an electorate facing historic increases in their next property tax bills?

Both backers and opponents of Prop. HH chalk up its loss to a lack of a clear message to voters. And the electorate may have been primed to say “No” by a barrage of ads with directly contradictory messages, including plenty on either side that stretched the truth or misrepresented what HH would do.

Some 59% of voters rejected the proposal in a low-turnout, off-year election, according to the latest results. The loss prompted finger-pointing among some Democrats and their allies.

“Proposition HH was a well-intended measure that was trying to address what lawmakers perceived to be a sudden and loud demand for some kind of property tax policy,” said Ian Silverii, a Democratic consultant and founder of The Bighorn Company, a political advocacy firm.

While the measure would have accomplished most of its goals, had it passed — including partially scaling back next year’s property tax increases — he said the approach had a major problem: “It never had one coherent message. It never had one coherent messenger, and if … Colorado voters don’t understand where the money is coming from, where it is going and what it’s going to help, they vote no.”

In all, more than 989,000 Coloradans said no to the measure, as of Thursday night — and they had potentially just as many reasons.

Property taxes, education funding and government aid

Proposition HH’s language mentioned a reduction in property taxes for homes and businesses, but also the “backfilling” of counties and several kinds of special districts for lost tax revenue. It mentioned the funding of school districts, too. The money would come from a portion of the state surplus.

If voters did more research, they’d learn that the last part meant a reduction in the state refunds required by the Taxpayer’s Bill of Rights, or TABOR, for years to come. They’d also see projections of huge sums of money set aside for new spending, reaching more than $2 billion a year within a decade, with most of it going to education.

State Senate President Steve Fenberg, a Boulder Democrat and chief proponent of the measure, cautioned against treating the opposition as united.

“The voters who voted no were not a monolith,” Fenberg said. “I think some of the Democrats who voted no feared it was something that would have resulted in reduced funding for their schools. There were Republicans who voted no who were concerned because they were told it would take away their TABOR refunds.”

Proposition HH’s chief opponent, Advance Colorado Institute President Michael Fields, echoed that sentiment, in his own way. But whether votes against it were about voters not liking pieces of the Prop. HH package, disliking its complexity or outright rejecting the policies proposed, a no vote is a no vote.

On top of that, many voters who participate in higher-turnout elections didn’t feel motivated to bother casting a ballot.

“When you lose by (nearly) 20 percent, it’s a combination of all the things” that might lead to a loss, said Fields, whose organization advocates for conservative fiscal policies.

He had expected the proposition to lose, he said, but was surprised by the wide margin.

Prop. HH failed by a much larger margin than the previous off-year ballot referendum to take aim at the state revenue cap, which is set under Colorado’s 31-year-old TABOR Amendment. The voter-passed constitutional amendment was aimed at limiting the growth of government.

In comparison, Proposition CC, which would have allowed the state to keep revenue above the cap instead of refunding it to taxpayers, failed by about 7 percentage points in 2019.

Citing internal polls his group conducted on Proposition HH, Fields said voters were particularly wary of its effect on refunds mandated by TABOR — especially on the heels of Democratic leaders’ much-touted Colorado Cashback Program for rebates in 2022.

The effect on refunds was a message he and other opponents hammered relentlessly in ads against the measure, at times saying Prop. HH would end them. The measure wouldn’t have ended refunds permanently, though by allowing the state to keep more money, it could have meant no refunds in some years.

Polis, during a news conference Thursday at which he announced the Nov. 17 special session, said the measure probably should have been broken into two or three separate, direct ballot questions that were in sync with each other.

“What people probably want to see is more specificity about exactly how the change would save them money and that it’s clear how that occurs,” Polis said. “This is technical, complicated stuff, so it’s hard to make it simple for a ballot initiative.”

For Polis, the measure’s failure was the second major blow to his agenda this year. It follows the death of his sweeping land-use reform bill in the final hours of the legislative session in May after fellow Democrats couldn’t overcome their differences.

Was Prop. HH too ambitious? Or not good enough?

For some of Colorado’s most progressive legislators, Proposition HH failed simply because some voters judged it to be insufficient.

“It was good, but it was not good enough. It provided some relief, but not enough relief,” said Rep. Lorena Garcia, an Adams County Democrat. “It was not an equitable piece of policy, and I think a lot of Coloradans saw that and said, ‘No.’ ”

Rep. Javier Mabrey, a Denver Democrat, agreed.

“Too many people were left out,” he said, referring to renters and lower- and middle-income earners.

Advocates for those groups considered HH’s set-aside of up to $20 million for rental assistance programs to be inadquate. Mabrey and Garcia both argued that renters would not have benefited from HH as much as homeowners. Renters make up more than a third of the state, according to census statistics, and have weathered sharp rent increases for years.

What’s more, Garcia said, HH was created in a vacuum — meaning inside the governor’s office. That, she argued, meant that there was no base of voters eager to sell a policy they had no hand in crafting.

It’s an argument echoed by Colorado’s major local government associations, which uniformly opposed the measure based on suspicions it would sap the vital revenue stream that property taxes provide for local services.

Kevin Bommer, executive director of the Colorado Municipal League, suggested HH was “cooked up in a back room where no one from local government was present to talk through it.”

His group, along with Colorado Counties Inc. and the Special District Association of Colorado, all said they were ready to work with legislators and the governor’s office on a new plan. Some local governments are already taking steps to lower property tax rates on their own.

“While this is a victory for local governments, and I want them to enjoy this moment, our war is far from finished,” said Ann Terry, executive director of the Special Districts Association. “We cannot rest on our laurels. We need to get back to work to provide viable solutions and a path forward.”