Colorado homeowners’ total savings from a spate of property tax changes in recent years are expected to eclipse $1 billion soon — money that has and will stay in owners’ pockets, but with an effect on local services that is still being tallied.
To backers of the cuts, the savings reflect state efforts to blunt Colorado’s affordability crisis, especially as home valuations — and corresponding tax bills — skyrocketed following the pandemic. For service providers that rely on local taxes, such as libraries, fire departments and river conservation agencies, the savings have meant a cloud over their budgets as they grapple to meet higher demands.
In other words, the property tax wars may have ceased, but the dust still hasn’t settled.
“Districts are trying to figure out how to provide ongoing services and perhaps additional services their communities need with less, or potentially less,” said Ann Terry, the CEO of , as her members were still finalizing their budgets in December. “By no means were districts sitting on piles of cash.”
There are thousands of entities across the state that receive property taxes, including school districts, cities, and county governments. Property taxes pay for more than two dozen types of local improvement and service districts that cover cemeteries, ambulances, pest control, flood prevention, downtown development, fire protection and more.
Total property tax collections in the state rocketed from about $12.76 billion in 2022 to $15.45 billion in 2023. Cuts through the legislature trimmed that amount slightly, to $15.29 billion, in 2024.
Schools reaped more than half the total collections in recent years. The seeming windfall, however, was only enough to keep up with delayed maintenance and upgrades — along with the rising costs for people and equipment that nearly every organization faced, officials with the districts said.
All the changes to tax rates equal a savings of about $270 for the owner of a $625,000 home on next year’s tax bill, versus the taxes they would have owed under pre-2021 tax rates, according to . The department expects the savings to rise to $300 for a similar home in tax year 2026, paid in 2027.
Overall, the cuts between 2021 and 2024 have lowered tax bills by more than $800 million in the aggregate, a figure that’s expected to exceed $1 billion total in the coming year.
“I’m proud of Colorado’s work to reduce property taxes for Coloradans, helping people stay in their homes and keeping more of their hard-earned money,” Gov. Jared Polis said in a statement. “This has been a bipartisan effort that has saved hundreds of millions of dollars for Coloradans.”
Combating rising tax burdens
The Common Sense Institute, a business-oriented think tank based in Greenwood Village, has regularly found Colorado in last place, or near last place, in housing affordability, executive director Kelly Caufield said in an interview. Between 2016 and 2023, households in Denver saw their overall tax burden, between state, local and federal obligations, rise by more than 50%, she said.
The overall effect of the property tax cuts hasn’t yet become clear and will require more data to suss out. But, she noted, the legislature focused on cutting the rates at a time of acute sticker shock.
At the time, Coloradans were seeing their property values rise by 33% or more, with a corresponding rise in their tax bills.
“There are a lot of things to unpack still,” Caufield said. “But I think things are still feeling better for a lot of Coloradans than they did when we were in that crisis moment of huge increases.”
In 2020, voters repealed the Gallagher Amendment in the state constitution, which locked in a certain ratio of residential to commercial property taxes that provided extra security for homeowners against sudden increases. The vote, in effect, unmoored residential property taxes right when home values surged at a historic pace, leaving owners gobsmacked by bills that reflected their new valuations.
Over the next several years, lawmakers tweaked the property tax formula to make it more palatable — while also trying to avoid more dramatic cuts that outside advocacy groups were proposing for the ballot, and which officials worried would slash local services.
The efforts to wrestle down property taxes led to multiple special sessions of the state legislature, a failed referred ballot measure and regular end-of-session bills to wrench down tax rates.
The most recent deal, passed during a 2024 special session of the legislature, included a six-year moratorium on new property tax measures from either the legislature or from the backers of proposed — but ultimately rescinded — ballot measures that would have ratcheted down the tax formula even further.
That law changed the formula used by the state to determine a property’s assessed value, or the amount of the value that’s subject to taxation, to provide tax relief. And it limited how much local property tax collections could grow.
While the state determines the assessment rate, property taxes are fundamentally a local concern. Local voters vote on local governments’ mill levies, which are the percentage of their assessed value that is taxed, for local services.
The web of special districts can mean homes in the same city, but located just blocks apart, can pay slightly different rates for different services.
The state’s changes to the rates chafed some local districts’ officials, including fire districts that fretted about affording equipment and firefighters as risks from wildfires loomed large year-round.
“Just the cost of providing services and buying equipment has increased astronomically,” said Ken Watkins, the executive director of the Colorado State Fire Chiefs, which represents fire districts throughout the state.
Tax rate changes affect planning
Fire trucks alone have doubled in cost since the pandemic, with a price tag of up to $2 million for a ladder truck, he said. The constant tweaking of the property tax rates has wreaked havoc with future planning, Watkins said. The changes also led districts to scramble to avoid cutting essential services.
That has included some districts cutting back specialist medical response teams, mental health crisis teams and heavy rescue teams, Watkins said. Others have tried to use another state law from 2024 that allowed them to ask local voters to raise sales taxes or the fees charged to developers to service new neighborhoods or businesses.
Fire departments are made up of Coloradans who are also feeling the pinch from higher costs, Watkins said. They’re often hesitant to stick their hands out to neighbors who are likewise struggling, but many districts are facing cuts of 15% or more to their projected revenue — potentially millions of dollars in larger districts — because of changes to property tax law.
By his tally, 39 districts asked for some kind of relief in 2025, including raising mill levies or asking voters to uncap revenue collection. In some cases, that meant asking voters to approve tax increases they had already voted on in prior elections because the new law essentially overrode those prior votes. Nine were unsuccessful.
“There are solutions, for sure, by going to your voters. But we don’t like to go to voters unless we really have to,” Watkins said. “Certainly, we realize taxes are an issue for everyone in Colorado. We’re not saying we’re not concerned — because our citizens are paying more in taxes, just like we are.”
Ultimately, local property taxes are determined by local need, said Terry from the Special District Association. State officials stepping into the debate meant decisions in the Capitol were superseding decisions made by local governments.
“Special districts are frustrated that the legislature removed any prior voter-approved approval of their revenue limits,” Terry said, referring to local votes to remove growth caps. “It feels like a real disregard for local government elections and voter intent.”
But she and others won’t know exactly how the cuts’ impacts will trickle into local communities until the changes have settled for another year or two and budgets have adjusted to the recently cooling housing market.
