Vote ‘ no’ to keep residential property taxes from exploding
Amendment B, repealing Gallagher, is an “all- ornothing” statewide proposition that will raise residential property taxes on both property owners and renters, and remove the needed checks and balances currently in place to protect Colorado residents.
The Gallagher Amendment has saved renters and homeowners in Colorado $ 35 billion in property taxes since 1982. Property owners can estimate how much the Gallagher Amendment has saved on their taxes over the past 38 years, just multiply the current property tax by three; so if you are paying $ 1,000, without Gallagher you would be paying almost $ 3,000 in property taxes. These additional property tax costs would also be paid indirectly by renters.
Amendment B is not just repealing Gallagher, it is removing specific language in the Colorado Constitution. Doing so will inevitably lead to increased property taxes, higher rent and less housing affordability across the state. If it passes, the property tax increase will cost residents more than $ 203.7 million in just the first year. This amount will only grow as time goes on with a minimum of $ 1.02 billion more in taxes paid by homeowners than they would have paid if Amendment B fails.
Unfortunately, the sponsors of Amendment B have failed to disclose this tax increase in the ballot language as required by the Taxpayer’s Bill of Rights ( TABOR), a part of our Constitution. Voters deserve to know this is a tax increase.
Additionally, the constitutional requirement that commercial, industrial, businesses and nonresidential properties be taxed at a 29% assessment ratio has been essential to local government
funding ( although the ballot language insinuates otherwise). It has kept residential property taxes low and impeded legislators from giving out special tax breaks to specific special interests. The assessment rate determines how much property taxes are collected and disbursed for spending. Rising home values have caused the residential property assessment rate to continually adjust from 21% in 1982 to 7.15% today, with the expectation it will drop again to 5.88% in 2021. This prevents property tax increases and guarantees residents are only responsible for 45% of the total state property tax burden. If Amendment B passes, the assessment rate would no longer adjust and residential property owners will pay almost 18% more in taxes than they otherwise would.
Property taxes are the primary source of funding for many local governments. Since nonresidential property values don’t accelerate at the same rate as homes and residences, the fixed 29% assessment rate ensures at least 29% of the total market value of the property is taxable for government funding. The fixed rate is a residential protection that has kept businesses from lobbying to receive a lower tax rate. Proponents of Amendment B don’t have a replacement for what they’re trying to repeal, therefore a lower tax rate for special interests would leave renters, homeowners and local governments responsible for making up the deficit. The ballot language of Amendment B doesn’t make the increase in property taxes abundantly clear, and it misleads voters from understanding what repealing the Gallagher Amendment will ultimately cost now and into the future.
Legislators are looking at the repeal from a budgetary perspective to address the state’s financial concerns, while the first thing our legislature should do in a deficit situation is to stop the bleeding. An ‘ all or nothing’ reaction isn’t the resourceful way to bandage the problem. We have to be aware of the current economic climate for individual Colorado residents. The answer now — in a time of financial crisis and COVID- 19 — isn’t to remove protections for homeowners and renters provided by the Gallagher Amendment, it is to avoid raising statewide property taxes and maybe address each county or region separately in the future.
If we are lucky enough to have a roof over our heads, everyone in Colorado either rents or owns a residential property. The bottom line with Amendment B is this: The repeal of the Gallagher Amendment will increase residential property taxes statewide and unequally impact Colorado residents. We strongly urge you to vote “no” on Amendment B for your wallet and for your local community.