2023 Colorado Legislative Session Recap
2023 Legislative Session Recap
This legislative session was one of vision and bold ideas – some of which were adopted, while others didn’t make it to the finish line. By the end of the 120-day session, the realities of limited resources and nascent ideas of how to govern via a broad and varied coalition yielded mixed results: Colorado incrementally and unevenly moved toward creating opportunities for economic mobility for all. Among the many ideas considered were rent control, statewide upzoning to prompt affordable housing, tax credits for working families, and a ballot measure to blunt the impact of spiking property values. Some of the measures that we passionately believed in didn’t make it. And while that’s not the preferred outcome, we recognize that sometimes it takes multiple attempts to get good ideas passed. Other measures gained traction and the ever-elusive funding to make them happen. There’s still a lot of work to do in creating a more equitable Colorado, and the Bell Policy Center will be continuing to fight for that vision.
Progress on Tax Fairness
We’ve consistently worked to focus the state’s tax code on helping those who need it most. To that end, HB23-1112 expands the existing state Earned Income Tax Credit (EITC) and state Child Tax Credit (CTC) to help low- and middle-income Coloradans get needed relief. Due to uncertainty about the economy and federal policy, the expansion of the EITC tax credit will only last for one year, while the CTC change is permanent. In addition, the passage of HB23-1311 could give every Colorado taxpayer equal TABOR refund checks of roughly $650 (single filer) or $1,300 (joint filing), which pushes back against Colorado’s regressive tax structure. Its enactment, however, is tied to the passage of Proposition HH, which is the property tax relief measure. The flat refund checks would replace the six-tier sales tax refund mechanism enacted by lawmakers in 1999. In addition, the Bell successfully advocated against HB23-1063. This bill would have reduced Colorado’s income tax rate from 4.4 percent to 3.5 percent and blown a multi-billion-dollar hole in the state budget, while giving the wealthy a windfall.
Movement Toward Better-Funded Schools
Colorado has long struggled to meet the requirements of Amendment 23 and fully fund K-12 education. Since 2009-10, Colorado has underfunded K-12 education by $10 billion via a mechanism known as the Budget Stabilization (BS) Factor. For 2022-23, the BS Factor was $321 million. But with increases in local share due to rising property values and increases in the State Education Fund, Colorado is on track to erase the annual budget stabilization factor next year. It will be just $141 million in FY 2023-24. While some lawmakers wanted to pay down the annual BS Factor entirely, they determined that preserving the State Education Fund balance would guard against swings in property tax revenues and future economic downturns. How the state handles property tax spikes (see below) and backfills gaps in school funding from that effort will impact K-12 significantly. For this coming fiscal year, there is a 7.5 percent increase in education funding, which will result in an average of $10,579 per student, up from $9,596. While more is needed, this is a crucial step toward ensuring adequate educational investment for all Colorado children.
Property Tax Relief
Homeowners and business owners have been alarmed at the rapid rise in property taxes. The legislature stepped in with SB23-303 which, if approved by voters, will reduce property taxes by lowering tax rates and taxable property values. An additional property type — primary residences– is also created. Primary residences, along with properties owned by older Coloradans receiving the homestead exemption, would receive additional tax relief. The reductions are fairly progressive, giving lower-income homeowners greater savings. To ensure this relief does not come at a cost to local services, the state will keep an additional one percent of the TABOR surplus, and use these funds to reimburse local districts and the State Education Fund. A property tax limit would also be imposed for local districts, limiting annual property tax revenue growth to the rate of inflation. This cap does not apply to school districts or other voter-approved taxes. Local governments can exceed this soft cap by conducting a public hearing and gaining approval, or by utilizing temporary mill levy credits. While a progressive measure and a net gain for K-12 schools, renters were largely left out. Remaining funds can be used to assist renters’ property tax burden, but their gains pale in comparison to those of homeowners. Future legislatures will need to find ways to direct relief to low- and middle-income renters, which they could accomplish by adopting an income tax credit.
Growing Housing Affordability
The legislature continued its multi-year effort to improve renters’ rights and housing affordability. Across the state, Coloradans are struggling to absorb rising housing costs along with inflationary pressures on other essential services. To address this challenge, a sweeping land use bill, SB23-213, would have established a framework for inclusionary zoning policies in transit corridors and expanded housing density throughout the state. Unfortunately, the measure died on the last day of the session. The Bell had advocated for important affordability and anti-displacement provisions in the bill to assure increased density didn’t come at the expense of local communities. The underlying issues remain, and it’s likely a future legislature will take on these issues. Finally, several renters’ rights provisions passed this session, and others, including a repeal of rent control prohibition and a measure requiring just cause for evictions, did not. Despite this progress, more work remains to reduce housing prices in the short term, and support land use changes to stabilize the housing market.
Steps Toward Fairer Workplaces
While older Coloradans are one of the fastest growing segments of the state’s workforce, many face employment challenges because of age discrimination. SB23-058, which passed this session, makes progress in addressing this problem. By preventing employers from asking job applicants age-identifying information on an initial application, workers will be evaluated on their skills and experiences — not their age. SB23-058 will not solve age discrimination in the workforce. However, it offers meaningful progress. The Job Application Fairness Act is a step toward a more equitable workforce where the economic contributions and needs of older workers are considered and valued.
Protecting Progress in Consumer Lending
Colorado has a long, bipartisan history of adopting meaningful regulations on high-cost loans. For example, the 2018 ballot initiative, Proposition 111, which passed by one of the largest margins of any ballot question in the state’s history, capped excessive interest and fees on payday loans. In 2023, Colorado took steps to protect this important progress. HB23-1229 closes two lending loopholes — including one that permits out-of-state lenders to bypass Colorado laws. With its passage, HB23-1229 strengthens Colorado’s long history of ensuring high-cost loans, which are connected to cycles of debt and poverty, are subject to meaningful regulations that Coloradans have shown they support.
Building the Foundation for a Stronger Care Economy
Lawmakers passed several bills this session that will strengthen Colorado’s caring economy. SB23-269, Preschool Program Provider Bonuses, offers one-time bonuses for providers participating in the new Universal Preschool Program. These targeted bonuses are meant to help grow provider participation, which in turn will better support families in need of care. Additionally, SB23-261, the Direct Care Workforce Stabilization Board, brings workers, employers, and recipients of care to the table to identify much needed solutions to support the direct care workforce. While incremental, these dual efforts are signs of progress, and move our state forward in meeting the needs of care providers and recipients alike.
