Amendment B would repeal the Gallagher Amendment, which was passed by Colorado voters in 1982 and ties residential property tax rates to commercial property tax rates. The existing amendment categorizes all properties as either residential or commercial and mandates that homeowners pay no more than 45% of the property tax total. Commercial properties are always billed 29% of their building’s value and the residential tax rate floats to maintain a 55/45 split. Repealing the amendment requires 55% voter approval. When business values drop — as during a recession — that lowers commercial property tax rates and forces residential tax rates to drop, too, to maintain the 55/45 split. Tax rates can go down quickly but can only rise very gradually because of Colorado’s Taxpayer Bill of Rights.
The case for: “The Gallagher Amendment is outdated and full of unintended consequences,” according to the state blue book. Amendment B is not a tax increase but rather fixes rates at their current levels. A repeal would ease the tax shortfall that’s expected to hit schools, fire districts and local governments because of the economic impact of the pandemic.
The case against: Repealing Gallagher would result in higher residential property taxes over time because residential tax rates would no longer be forced to drop. Rather than repealing the amendment statewide, taxpayers have the option to approve changes at the local level to best meet local needs.
Ballot question: “Without increasing property tax rates, to help preserve funding for local districts that provide fire protection, police, ambulance, hospital, kindergarten through twelfth grade education, and other services, and to avoid automatic mill levy increases, shall there be an amendment to the Colorado constitution to repeal the requirement that the general assembly periodically change the residential assessment rate in order to maintain the statewide proportion of residential property as compared to all other taxable property valued for property tax purposes and repeal the nonresidential property tax assessment rate of twenty-nine percent?”
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