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Voters to decide if Gallagher Amendment should be repealed
from 6-18-20 Edition
by The Villager
BY FREDA MIKLIN GOVERNMENTAL REPORTER
After years of talking about it, on June 12 the Colorado general assembly took action that could lead to the repeal of the Gallagher Amendment to the state constitution.
Senate Concurrent Resolution 20-001, if adopted by the voters in November, would end the requirement that an arbitrary formula from 1982 continues to be used to divide the total annual property tax burden between residential and business property in a manner that has long been viewed as resulting in unfair and unintended consequences that have been most financially detrimental to rural cities and counties in our state.
On a vote of 27-7 in the senate, including yeses from eight out of 15 Republican senators voting, along with all the Democrats, and 47-18 in the house, including six out of 24 Republicans and all the Democrats, the legislature declared its agreement that the time has come to let the voters of Colorado decide if the method for splitting the property tax burden devised 38 years ago is still right for Colorado.
Notably, five out of six members of the elite Joint Budget Commission (JBC) of the legislature voted in favor of the Resolution. The JBC is the
general assembly’s permanent fiscal and budget review agency that prepares the statewide annual budget each year after hearing from every department of state government and analyzing the management, operations, programs, and fiscal needs of all of them.
Even though one of the purposes of this effort is to address the unfair tax burden on business property, repealing the Gallagher Amendment will not cause an increase in taxes paid on residential real estate. If the measure is approved, the current tax rates of 29 per cent on business property and 7.15 percent on residential property will remain unchanged. Total taxes paid on residential real estate will not increase unless voters choose to increase their taxes or a home’s value goes up. If a home’s value declines, its taxes will go down.
The Resolution, sponsored by a Democrat and a Republican from both the senate and the house, does not require the governor’s signature to be placed on the November ballot.
According to a statement made on the floor of the senate by one of the bill’s prime sponsors, Democratic Sen. Chris Hansen, “Without a change to Gallagher, the 2020-2021 budget is going to cost K-12 education $500 million. City, county, and local services are also going to get similarly impacted.”
Republican prime sponsor Sen. Jack Tate, who has made the effort to solve this problem a key priority of his time in the senate, said Gallagher’s “original purpose was to make sure that business property taxpayers paid their fair share of taxes at a time (the 1980’s) when inflation and interest rates were high. Over 40 years, the property tax has shifted to business owners such that now the owner of business property pays more than four times the amount of taxes for the same amount of property, while artificially keeping residential rates unrealistically low. It is inherently unfair to local communities in Colorado, hurting the poorest communities worst.”
Fmiklin.villager@gmail.com
