COLORADO SPRINGS– One of the first ballot issues appearing on Colorado’s ballot would undo a nearly-40-year-old law, if passed.
A vote for Amendment B is a vote to repeal the Gallagher Amendment, a section of the Colorado Constitution passed by voters in 1982 with the goal of lowering residential property taxes.
Currently, Colorado has the third lowest assessment rate for homes at 7.15% (meaning 7.15% of a homes value can be taxed). That assessment rate has dropped since Gallagher’s passing because the 1982 requires 45 percent of the state’s property taxes must come from homes and 55 percent from “non-residential” properties, like businesses, farms, or vacant lots.
Because residential property values increase faster than non-residential values the residential rate has to decrease to keep under the 45 percent ratios. Proponents of Amendment B say, that’s disproportionately affects rural Colorado because while the residential assessment rate applies statewide, property value increases do not meaning homes in rural areas are worth relatively less and are taxed at an ever-decreasing rate.
“That means all those local districts—hospitals, ambulances, fire departments, etc.— have a tough choice to either suffer cuts or they have to raise local taxes.” says Kent Thiry, the former CEO of DaVita Health and current campaigner for Amendment B.
The same applies for school districts and other special districts which commonly ask voters for Mill Levy increases to supplement budgets.
Because of the ratio, Thiry says, businesses and non-residential properties pay four to five times the property tax rate they would otherwise – at 29 percent. The non-residential assessment rate has not changed since 1982 and will not change if Amendment B passes.
“Just pointing out that there is a problem doesn’t mean that this fixes it.” said Michael Fields, the Executive Director of Colorado Rising Action and part of Keep Property Taxes Low.
Fields acknowledges the funding problems in rural areas the status quo is causing but says, Amendment B is not the approach.
“That should be addressed and not taking a hammer to the whole Gallagher amendment. We need to take a regional approach to assessment rates and say if it’s different in different areas, why don’t we have different assessment rates there,” he said.
Amendment B was put on the ballot by state law makers, passing out of the Colorado General Assembly with bipartisan support (28-6 in the senate, 47-18 in the house).
“One of the things that we love is that Colorado has the third-lowest residential tax rates in America and we want to protect that,” Thiry said. “Our amendment freezes that rate and in addition makes sure TABOR still applies. No one can raise a residential tax rate or a commercial tax rate without a vote of the people.”