Let’s talk for a moment about the good, the bad and the really bad of The Gallagher Amendment…
— editorial in the Denver Post, August 2020.
Ballots for the November 2020 election will be mailed out in early October, here in Colorado — one of the five US states that allow all voters to vote by mail. (The other states are Hawaii, Oregon, Washington and Utah. At least 21 other states have laws that allow certain smaller elections, such as school board contests, to be conducted by mail.) We’ve been voting by mail since 2013.
Colorado County Clerks will begin mailing ballots on October 9. (Voters can also vote in person at Colorado County Clerk offices.)
The November race that’s received the most national coverage is, of course, the contest between Republican President Donald Trump and former Vice President, Democrat Joe Biden. But here in Colorado, voters will be able to weigh in on numerous additional candidates, and also, to express their preferences on various legislative proposals.
Voters will be asked to consider 11 ballot measures on this year’s ballot. For example, we will be asked whether to repeal the Gallagher Amendment. Back in 1982, Colorado voters amended the state constitution to provide property tax relief to homeowners. More about that mechanism in a moment.
That voter issue, appearing on your ballot as Amendment B, made some headlines last week when a group known as ‘Protect Our Homes Colorado’ filed a lawsuit in a Denver district court to halt the printing of ‘the Blue Book’ — the state’s official guide to the 2020 election — after a group of legislators decided to change the information about Amendment B in the Blue Book.
‘Protect Our Homes Colorado’ has been running a campaign to defeat Amendment B.
The information contained in the Blue Book is written by a ‘non-partisan’ legislative committee, following weeks and months of research and interviews. But before the draft language is finalized, the Book goes before a bi-partisan committee of legislators for final tweaks to the wording. In the case of Amendment B, the legislative tweaks were so substantial — according to ‘Protect Our Homes Colorado’ — that the group appealed to District Court Judge Martin F. Egelhoff to halt the printing of the booklet until some compromise wording could be agreed upon.
An excerpt from the original Blue Book wording for the ‘pro’ arguments:
Current constitutional provisions disproportionately impact rural and poor communities. Increases in home values on the Front Range result in a lower residential assessment rate for the whole state. This drives down the taxable value of residential properties in rural areas, meaning that local services such as fire protection, sanitation, and library services, may be reduced or eliminated because of property values elsewhere in the state. Amendment B prevents further reductions in these important services as a result of residential assessment rate decreases under current law.
The revised wording that ‘Protect Our Homes Colorado’ didn’t like:
The Gallagher Amendment is outdated and full of unintended consequences. If the Gallagher Amendment is not repealed, owners of high-end homes in Denver’s wealthiest neighborhoods would get a tax cut next year, while small businesses and farmers would pay a larger share of property taxes. The Gallagher Amendment causes small businesses to be taxed at a rate four times higher than residential property owners, and penalizes rural and low-income communities that lack a significant commercial tax base.
Judge Egelhoff declined to issue a temporary restraining order that could have stopped the Blue Book from being printed and distributed. He cited the “separation of powers doctrine” that prohibits a court from interfering in a legislative process.
The Gallagher Amendment impacts how much Colorado homeowners pay in property taxes, for services like public schools, fire protection, and county government. Under the Gallagher Amendment, the state government must adjust the property tax rates on a regular basis, so that non-residential property — vacant land, commercial, agricultural, oil and mining — pays 55% of the total property taxes collected, and residential property pays the other 45%. Since 1982, residential property has developed more rapidly than non-residential property, and has increased in value more rapidly, causing the assessment rate for homes to drop from 21% in 1982 to 7.19% in 2020. This outcome makes sense, with vacant property being constantly converted into residential as Colorado’s population has grown, and with home prices spiraling upwards.
Non-residential property continues to pay at a 29% rate, same as in 1982. Amendment B would freeze residential property assessment rate at the current 7.19% rate. Without this amendment — which is, essentially, a repeal of Gallagher — the state expects the residential rate to drop below 7.19% in 2021.
Because the rate is determined at the state level — and thus, the percentages are determined mainly by development in big cities like Denver, Boulder, and Colorado Springs — smaller communities that are heavily ‘residential’ with few thriving commercial businesses and with a struggling agricultural industry — like, for example, Pagosa Springs — would likely see a decline in funding for schools, fire districts, health districts, water districts, and county government.
Here’s a quote from an August 2020 editorial in the Denver Post:
“I’m from rural Western Colorado and Gallagher has definitely disproportionately affected us out here,” Rep. Matt Soper, R-Delta, told The Editorial Board last week. “A good example would be the Plateau Valley Health Clinic, which is actually a special district hospital. They are almost entirely funded from their mill, and they have had a good payer mix over the last couple of years from oil and gas, but oil and gas has now left that part of the state and they are very worried what the future looks like. And here’s the reality — they are going to go back to the voters and ask for a mill increase which means higher taxes on rural Colorado…”
…And we can all take solace and comfort in the fact that lawmakers cannot ever increase the state property tax assessment rate without a vote of the people because the Taxpayer’s Bill of Rights is very much still intact. Any increase in assessment rate and any increase in local mill levy will still come before Colorado voters for approval, and that is a strong check on Colorado’s tax burden.
As far as I know, we’ve not heard from any of our Pagosa Springs leadership concerning Amendment B… and what it might mean for our community.
Bill Hudson began sharing his opinions in the Pagosa Daily Post in 2004 and can’t seem to break the habit. He claims that, in Pagosa Springs, opinions are like pickup trucks: everybody has one.