Colorado lawmakers gave preliminary approval to a bill to reduce property taxes on Tuesday, ending the second day of a Special session of the legislature.

Governor Jared Polis called lawmakers back to work after reaching an agreement with sponsors of two ballot measures that those measures would be withdrawn if the bill passed.

The bill – along with another bill lawmakers passed in May – would provide $1 billion in annual property tax relief. The savings for individual homeowners depend on several factors. Property taxes are based on the value of your property, the state tax rate and your local assessment.

The Office of State Planning and Budget has calculated the average savings from the two bills for different parts of the state:

• Denver County – median home price of $709,920 – average savings of $233.47 (5.64% savings) on property tax bill in 2025 and $259.91 (6.27% savings) in 2026. (Total Mills 81,617)
• Adams County – median home price of $556,660 – average savings of $324.22 (7.03% savings) on a property tax bill in 2025 and $366.42 (7.94% savings) in 2026. (Total Mills 115,884)
• Garfield County – median home price of $540,700 – average savings of $188.52 (8.37% savings) on property tax bill in 2025 and $214.03 (9.50% savings) in 2026. (Total Mills 58,276)
• Pueblo County – median home price of $326,260 – average savings of $173.26 (7.79% savings) on property tax bill in 2025 and $196.36 (8.83% savings) in 2026. (Total Mills 95,346)
• Xcel, Tri-State and Black Hills Energy customers are expected to save $100 per household on their electricity bills over the next five years as a result of the compromise bill.

Economists on the bipartisan Legislative Council also analyzed the savings that the two bills would bring compared to the two ballot bills.

They say the owner of a $550,000 home living in an 80-mill levy area would save $220 per year under the two bills and $638 per year under the two ballot measures.

But there is a trade-off. Property taxes fund local governments and schools, and the ballot measures would mean $630 million less per year for grades K-12, which equates to an $858 million cut in per-pupil funding in fiscal year 2025-26 from current law, according to the Office of State Planning and Budget.

The budget office says Denver Public Schools would lose $67 million, Adams 12 Five Star Schools would lose $30 million, Roaring Fork RE-1 would lose $5 million and Pueblo City would lose $11 million.

While the state of Colorado is required to make up for lost revenue from schools, the same does not apply to local governments, including special districts. Several lawmakers say they are particularly concerned about fire districts, which are funded entirely by property taxes.

Colorado state fire chiefs say revenues in many districts have not kept pace with inflation for years. Brad White, chief of the Grand Fire Protection District, says some departments can barely open their doors right now.

“We’re hearing from our fire chiefs in East Plains that they’re out of volunteers. They’re already close to closing their doors,” White said. “Further revenue cuts mean they don’t have equipment for the few volunteers they do have. We’re hearing from our fire chiefs in West Slope that the money from the oil and gas wells that they once relied on is no longer there and they still haven’t gotten back to pre-recession revenue levels.”

Democratic Speaker of the state House of Representatives Julie McCluskie says she is working with Polis on a stable funding source for fire districts: “I am committed to ensuring that we as a state find a better way to provide resources and funds to fire districts. Many of our communities are struggling with the extraordinary increase in demand for services, they do not have the local resources to meet that need, and we as a state need to step in.”

The state House of Representatives is expected to give final approval to the compromise bill on Wednesday, after which it will go to the state Senate.