Coloradans this fall will be asked to repeal a nearly 40-year-old amendment to the state constitution that determines property tax rates.
Amendment B asks voters to repeal a stipulation known as the Gallagher Amendment, which controls how much residential and non-residential property owners pay in taxes to local governments each year.
Passed in the early 1980s, the pervasively controversial Gallagher rule requires that the majority of the state’s overall property tax values come from structures like factories, farms and office buildings — not homes. As residential property values have soared, the requirement to maintain that ratio has seen the residential assessment rate fall by nearly 14% in the past four decades, while the non residential rate has stayed flat at 29%.
The fallout has been a wave of mill levy increases across the state intended to buoy the losses incurred from low residential property tax collections, which fund services like schools and special districts.
If passed, Amendment B would freeze the current rates as is and require voter approval to increase them.
Proponents say the measure will alleviate taxes on small businesses in an especially volatile climate and balance strained county coffers in the most rural parts of the state. Opponents argue that without the shield of Gallagher, taxes for homeowners will steadily creep up. Legislative analysts have said that keeping the rate flat would indeed result in increased property taxes for homeowners, and if Gallagher remains intact, residential rates will likely continue to fall in the coming years.
The issue has produced a unique smattering of bipartisan bedfellows. Last month, Republican Aurora City Councilman Curtis Gardner and Democratic state Sen. Rhonda Fields co-wrote a column voicing their support for the measure.
“We now have a chance to repeal the Gallagher Amendment before it once again squeezes our economy even more and takes a buzzsaw to bare-bones budgets for vital services,” the local lawmakers wrote. “Amendment B is a straightforward solution that removes Gallagher’s broken formula, and freezes property tax rates.”
Longtime Democratic Denver politician Dennis Gallagher, who co-wrote the original amendment nearly 40 years ago, has been a vocal critic of the effort to axe his brainchild, as has Colorado State Rising Action, a stringently conservative social welfare organization. Michael Fields, executive director of the group, is the registered agent for the committee created to oppose the measure.
“The Gallagher Amendment isn’t perfect, but a full repeal will mean increasing residential property taxes while providing little to no benefit to small businesses,” representatives of Colorado State Rising Action wrote on the group’s website. “The middle of a recession is not the time to raise property taxes on hardworking families and renters while creating uncertainty about the future.”
Dennis Gallagher was one of a handful of Colorado politicos who asked a Denver District Court judge to halt the printing of a state-provided voter guide last month after a coalition of current legislators tweaked language included in the packet. Gallagher and other claimed the new language was misleading and would unfairly encourage residents to approve the proposed change.
“The proponents of the ballot measure threw our months of public input and staff work with changes to nearly everything, including the title, placement of sections, new graphs and charts, and wholesale changes in wording,” Gallagher said in a statement issued when the suit was filed.
A judge ultimately dismissed the suit and the information booklets were mailed to voters as-is.
Only paltry contributions have been reported to a pair of issue committees registered to oppose and support the proposal in recent weeks, with only $1,100 in cash contributions reported between them as of Sept. 21, according to campaign finance reports.
But that changed Oct. 5 when a pair of wealthy benefactors injected the race with six-figure sums. On the same day, Boulder entrepreneur Dan Caruso contributed $25,000 to the proponents of the proposal, and Greg Maffei, CEO of the umbrella company that oversee Live Nation, Sirius XM and TripAdvisor, doled out $100,000 to the issue committee. Maffei’s donation was tied to a PO Box in Avon.