Amendment B – Repeal the Gallagher Amendment Related to Property Taxes

Amendment B would repeal two constitutional requirements in Article X commonly referred to as the Gallagher Amendment, after then-state senator Dennis Gallagher who drafted the referendum passed by voters in 1982.

Colorado has had rapid population growth with only five congressional districts in 1980, seven today and possibly eight after the 2020 census reapportionment. Nevertheless, Colorado’s total residential property taxes are fixed at the 1982 level of 45% of the total property tax.

Since Gallagher passed, most nonresidential property is assessed at a fixed 29% rate. Under the formula,
      property tax = property value * assessment rate * mill levy,
the state is forced to annually reevaluate the assessment rate on residential properties to maintain the required 45% - 55% ratio. In 1983 the residential assessment rate (RAR) was 21%. Even in the years when nonresidential property values increase faster than residential values, TABOR forbids the RAR from increasing without a vote of the people. The RAR has only gone down since 1983 to its current 7.15%.

Amendment B would repeal the 45% - 55% ratio requirement and the fixed 29% nonresidential assessment rate. Since the legislature is unlikely to decrease assessment rates, expect them to stay at 29% and 7.15%. Any future increases in assessment rates would have to be approved by the electorate. Some local jurisdictions have automatic property tax increases to offset losses from the Gallagher, and those would be eliminated. If Amendment B does not pass, the RAR is projected to continue to decrease.

Because Amendment B is a repeal of constitutional provisions, only a simple majority is needed for passage. A similar attempt to repeal Gallagher in 2003 failed with 77.6% voting against Initiative 32.

Recommendation: Yes/For

Schools, counties, fire departments and more depend on property taxes. Urban communities with a good mix of residential and nonresidential properties are weathering Gallagher’s requirements okay, but rural communities are suffering.

TABOR, the Gallagher Amendment and Amendment 23 are the three big constraints on the state budget. We have a chance to free ourselves from one of the big three while keeping Colorado’s residential property taxes among the lowest in the nation.

Website for the Yes side – Yes on Amendment B
https://yesonamendmentb.com/
Building a Better Colorado “does not advocate for any specific solutions” but asked community groups about possible solutions for Colorado’s fiscal handcuffs.
https://buildingabettercolorado.org/understanding-the-gallagher-amendment/

Website for the No side – Keep Property Taxes Low
https://keeptaxeslowco.com/


Approved Ballot Language

Amendment B (CONSTITUTIONAL)

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?

YES/FOR ____
NO/AGAINST ____

SCR20-001 to refer Amendment B to the voters
https://leg.colorado.gov/sites/default/files/documents/2020A/bills/2020a_scr001_enr.pdf