News Release - Many school districts to begin implementing legislative correction to property taxes

Nov. 8, 2021

Many school districts to begin implementing legislative correction to property taxes  

This December most Colorado school districts will begin incrementally raising property taxes to fix a decades’ old practice that reduced local taxes for education based on what has now been determined to be a misinterpretation of the Colorado Constitution.

The change in tax collection is mandated by House Bill 21-1164, which was signed into law in June and is forecasted to generate more than $80 million in additional property tax revenue for school districts in Fiscal Year 2021-22.

The legislation was intended to untangle a long-held misunderstanding by the Colorado Department of Education and others in how Colorado’s Taxpayer’s Bill of Rights (TABOR) should be interpreted. TABOR, which was approved in 1992, limits the amount of revenue the state can retain and spend. In the 1990s and 2000s, most school districts asked voters to allow them to retain and spend revenue in excess of the property tax revenue limitation imposed by TABOR -- a voter decision that is also known as “de-Brucing” or “de-TABORing.” 

Districts that de-TABORed had permission from voters to keep their local property tax collection mill levy at the level in place at the time of the de-TABOR vote. However, CDE interpreted state statute in such a way that de-TABORed districts should, instead, reduce their local property tax collections through 2007. Subsequent legal interpretation now makes it clear that local property tax collections should not have been reduced.

In 2020, impacted districts implemented tax credits to backfill the difference between their current education mill levy rate and the mill levy rate that should have remained in place because of the de-TABOR vote.

 This year’s legislation required CDE to develop a gradual correction plan. Starting this tax year, affected districts will increase their local property tax collections by a small amount every year until the tax credits are zero. A total of 118 of the state’s 178 school districts will be impacted by this taxation correction. 

Taxpayers in these districts will see a maximum one mill increase in their property tax mills beginning in the 2021 tax year and occurring each year following until the tax credits are reduced to zero. A mill is a $1 tax payment for every $1,000 of taxable property value, which is set by a county assessor. Follow this link for a spreadsheet that shows each district’s mill levy increase. 

The addition of this revenue will free up state funds for education that would have otherwise been used to “backfill” the undercollection of local property taxes throughout the state. As a result of this Mill Levy Correction, the legislature will have access to additional state funds for education. In the 2021-22 school year, the legislature chose to allocate this revenue as additional funding for at-risk and English learner students.

Contact county assessors for more information about local taxes.