Colorado’s wide-ranging Proposition HH, a property tax relief and education-funding measure pressed by the state’s Democratic leaders, went down in defeat Tuesday night as voters were rejecting it by 20 percentage points.
Just over 60% of voters rejected Proposition HH out of 1.4 million votes counted in unofficial results as of 10:40 a.m. Wednesday, while just shy of 40% supported it. The Associated Press called the measure’s defeat just before 8 p.m. Tuesday, less than an hour after voting ended.
More ballots remained to be counted across the state, making it possible the margin would narrow. But voters in all but a half-dozen counties were on track to reject the major policy proposal put forth by Gov. Jared Polis and legislative Democrats to deal with large property tax increases expected next year. It was the second time in four years that voters rebuffed an attempt by state Democrats to raise spending limits under the Taxpayer’s Bill of Rights, or TABOR.
Nearly 57% of Denver voters were supporting HH, but suburban voters were handily rejecting it: “No” votes had a 57% share in Arapahoe County, a 60% share in Jefferson County and a 67% share in Douglas County.
“It is a clear message to the governor and the legislature that people want clean property tax relief, and they should call a special session and do that before people get their bills next year,” said Michael Fields, president of the policy arm of Advance Colorado, an advocacy group for fiscal conservatism that led opposition to the measure.
Backers of Prop HH conceded defeat.
Steve Fenberg, the top Senate Democrat and sponsor of the bill to put Proposition HH on the ballot, lamented in a statement that the proposition fell “prey to a misinformation slogan campaign by the far right,” with opponents declaring HH would “end TABOR refunds.”
“It’s unclear tonight what the pathway forward is, but it’s clear the answer is not Initiative 50, which would amend the constitution to permanently reduce funding for schools, fire districts, and libraries,” said Fenberg, a Boulder Democrat who serves as Senate president. Initiative 50 is a ballot measure put forward by Fields’ group for the 2024 election that, if approved by voters, would cap property tax growth.
Proposition HH became a partisan battleground in an election year without any state races on the ballot.
Its complexity reflected the careful aims of supporters, while rallying opposition groups against a measure that, beyond tamping down on coming property tax increases — but not eliminating them — also proposed to tinker with state tax refunds and significantly boost education funding for years to come.
Democrats and their allies, particularly in education, supported Prop. HH as a way of blunting the worst of the property tax increases that are expected next year due to massive spikes in valuations across the state. They aimed both to reduce the scale of those increases and to compensate local governments for lost revenue, all while raising money for education, which long has been short-changed by state government.
But conservatives and some other critics fought Prop. HH, portraying it as an end-run around the state’s constitutional TABOR amendment, since the measure would allow the state to dip into state tax refunds to pay for its components.
Opposition groups found allies in local government associations, which didn’t like how HH would meddle in local affairs and suspected the measure would leave them without enough money for local services.
The wording of the measure and its complexity left some voters conflicted. On Tuesday, some voters interviewed by The Denver Post described the language as “disingenuous,” while others said they looked at who was backing it or opposing it to help determine its aims.
“They could have worded (HH) a lot better,” said Bryan Gock, a Denver resident who was dropping off his ballot at the Washington Park Rec Center. He described himself as center-left and voted against the measure. “I don’t have anything against breaking up TABOR, but I don’t like backdoor ways to do it.”
Fields called Tuesday’s outcome a “big win for TABOR.”
The question now is whether Democrats will call a special session ahead of the certification of property tax valuations at the end of year. Fenberg has previously expressed skepticism that there would be enough time — or that there would be enough political will for the state to trim back the primary funding source for many local governments, without providing money to cover their losses.
The measure’s Democratic backers in the legislature had said that if voters rejected Prop. HH, they had no backup plan to deliver property tax relief. Polis has declined to describe an alternative approach.
Conor Cahill, the governor’s spokesperson, said in a statement: “While (Polis) is disappointed voters didn’t pass a long-term property tax cut, he is currently considering next steps.”
Republicans, who sit at a historic ebb in power in the State Capitol, had little recourse against HH beyond urging voters to reject it. GOP lawmakers recently unveiled a slate of proposals they encouraged the state to pursue if HH failed.
Opponents ran a flurry of ads characterizing the measure as eventually taking away TABOR refunds. The main committee opposing the measure, No on HH, reported raising nearly $2 million.
Meanwhile, the pro-HH committee, Property Tax Relief Now, reported raising nearly $2.5 million and argued in its advertising and mailers that the ballot measure was the best solution to rising property taxes.
Proposition HH marked the latest defeat as Democrats attempted to leverage their trifecta in state government to hold onto more tax money. On the 2019 ballot, they ran Proposition CC, which proposed to retain all taxes collected beyond the TABOR cap, ending refunds, in a bid to shore up the budget.
Voters rejected Prop. CC by about 114,000 votes, or 7.3 percentage points.
Four years later, HH’s failure also represents the second big policy defeat Polis has faced this year as he seeks to address the state’s myriad of housing issues. During this year’s legislative session, Polis and his allies sought to reform land-use codes across the state but failed to muster enough support in his party, amid concerns that the proposal would undercut local control.
Property taxes promise to present an ongoing battleground in the state.
Advance Colorado has already landed its measure to cap property tax growth on the November 2024 ballot. And the Bell Policy Center, a progressive advocacy group, has filed proposed initiatives that would counteract that proposal, though they haven’t qualified for next year’s ballot yet.
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