New state property-tax revenue limit will affect some Pitkin funds starting with 2026 budget year, county CFO warns

Pitkin County officials told commissioners on Jan. 28 that a sequence of recent state bills changed how assessed values are calculated and added a new property-tax revenue limit that will apply to some county funds beginning with property taxes levied in 2025 (collected in budget year 2026).

Anne (last name not stated), Pitkin County chief financial and administrative officer and public trustee, led the briefing and outlined the recent state actions. She said the cumulative legislative changes have been incremental and complex and that county staff are reviewing which local funds the new limit will affect.

What changed in state law - Timeline of bills: staff described a multiyear sequence: in 2022, Senate Bill 238 reduced assessed values; in 2023, Senate Bill 303 and subsequent special-session changes introduced additional assessed-value changes and a proposed revenue limit (voters rejected a statewide measure called Prop HH); later special-session adjustments followed; in 2024, Senate Bill 233 continued assessed-value changes and added a property-tax revenue limit; and in the 2024 special session a change extended the limit into future budget years (starting 2026 for local budgets). Staff also referenced a later-enacted House bill (referred to in the briefing as House Bill 24B1001) that modified the revenue-limit calculations. - New revenue limit structure: the new law sets an annual limit of 5.25% growth in property-tax revenue per assessed-value year, multiplied by the number of years in the assessment cycle. In Pitkin County’s two-year assessment cycle that translates to a 10.5% cap over the full cycle, with carryover mechanics (for example, if one year’s increase is below 5.25%, part of the unused allowance can carry forward). - Exemptions: the law excludes K–12 school districts, home-rule towns and home-rule cities and city-counties from the new limit — but the law did not exempt home-rule counties (Pitkin County and Weld County are the two home-rule counties in Colorado, staff noted). Entities already subject to TABOR or the state 5.5% revenue limit were also identified as excluded from the new limit.

Local impacts described by staff - Funds likely affected: staff said the new limit could apply to some county special-purpose tax funds that are not already constrained — specifically ambulance districts, a healthy-community tax, a recently created affordable-housing property tax fund, Open Space & Trails and Redstone Ranch acreage funds. Staff noted that some of those funds experienced large assessed-value-driven increases in 2024; for example, Open Space & Trails received an almost 50% bump in property-tax revenue in 2024 tied to assessed-value changes. - Example: staff said that had the new revenue limit been in place earlier, a large 2024 purchase discussed by the Open Space & Trails board (the Snowmass Falls property) would likely have been infeasible because the board could not have collected the full assessed-value increase.

Operational and legal questions Commissioners asked staff to research legal questions including whether the state law could effectively override local voter approvals to exempt funds from the limit and what ballot language would be required if a county sought a voter-authorized waiver for a single year or in perpetuity. Staff said state guidance requires a specific ballot-title procedure to ask voters to waive the limit for a specified year or for future years.

Practical budgeting implications - Staff suggested the revenue limit will make multi-year forecasting more complex and recommended that the county reexamine long-range plans for funds dependent on assessed-value increases. County budgeting staff said that for many funds the practical near-term budgetary impact may be limited — Pitkin’s typical internal forecasts already avoid aggressive growth assumptions — but single large windfalls tied to assessed-value changes could be curtailed under the new calculation. - Implementation and operations: staff noted implementation will require changes to assessor and treasurer reporting and software to break out allocations and apply the new limits, and they said state agencies (including the Department of Local Affairs) have been involved in drafting guidance but that considerable administrative coordination remains.

Next steps County finance staff said they will provide more detailed modeling of which funds will be affected, consult the county attorney and — if needed — recommend options for board consideration, including a possible voter question to waive the limit for a year or for specified funds. Commissioners asked staff to consult the state attorney general’s office on legal questions and to present clearer five-year fund projections that reflect the new statutory limit.

Ending: Staff characterized the change as legally and administratively significant for affected funds and pledged follow-up analysis for the board’s 2026 budget cycle.