Amid a contentious election year and global pandemic, voters deserve to understand what we’re voting for and how it will affect us. One ballot measure, proposed Amendment B, will hit home harder than the rest. If passed, Amendment B will repeal the Gallagher Amendment and increase your property taxes. However, the wording of the ballot language, in violation of the Taxpayer’s Bill of Rights, does not mention this tax increase. In my opinion, Amendment B is deceitful and just plain wrong.
What is the Gallagher Amendment? Passed by voters in 1982, the Gallagher Amendment brought relief from rapid growth and rising residential property taxes due to inflation and the favorable tax treatment often received by businesses and special interests. Gallagher imposed a 45% limit on the total value of residential property in the state with the other 55% of the property tax collected from non-residential property like oil and gas, and other commercial property. This 45:55 ratio has saved residential property owners $35 billion since being enacted.
Because of rising home and apartment prices, residential property values have steadily increased over the years. However, because the value of non-residential properties is often set more favorably than homes, Gallagher has required assessment rates on residential properties to be reduced from 21% in 1982 to 7.15% today and is projected to fall to 5.88% in 2021 to maintain the 45:55 balance. Gallagher has also prevented commercial interests from getting special tax loopholes and shifting the tax burden onto residential owners and renters, which has happened in many other states with average taxes on homes often exceeding $10,000 per year.
If the Gallagher Amendment is repealed, Coloradans can expect a much higher tax bill starting in the next tax cycle. Indirectly, renters will pay for increased property taxes passed on by housing providers. Homeowners may struggle to avoid foreclosure. Economic hardships will likely increase for fixed-income residents and at-risk families. Total housing costs will go up, and mortgages will be less accessible.
If Amendment B passes, it will take a sledgehammer to affordable housing. A major priority for local governments throughout Colorado is to address and take care of affordable housing for some residents; but this has been more difficult following the hit of COVID-19. In the current climate, voting “yes” on Amendment B would increase property taxes and the cost of affordable housing, pushing vulnerable families out of their homes and leaving these families with little to no housing options.
If Gallagher is repealed, the Colorado property tax administrator estimates residential property owners will pay an additional $203.7 million in property tax increases — just in the first year. This could escalate the financial crisis many Coloradans already face from rising unemployment and lost income due to COVID-19. Fear during a recession only creates more uncertainty in everyone’s finances. Now is not the time to raise taxes on Coloradans.
Even as we face the uncertainty of an economic recession, the deficit will still need to be made up elsewhere. While the ballot language suggests that taxes generated by the Gallagher repeal could fund fire protection, police and education, there is absolutely no requirement for lawmakers to do so. It is rumored that commercial interests are already planning legislation to reduce their taxes if Amendment B passes.
In my opinion, repealing the Gallagher Amendment is an extreme measure, and the effects will harm Colorado immediately and in the long run. In order to protect residents over special business interests, we must vote “no” on the Colorado Gallagher Amendment Repeal and Property Tax Assessment.
Dickey Lee Hullinghorst is the former Democratic Speaker of the Colorado House of Representatives.