When Colorado lawmakers reconvene in 2021, they face a projected $1 billion dollar pandemic-driven shortfall in our state budget. On top of that, our K-12 schools will require $250 million in backfill funding as a result of Colorado’s outdated Gallagher amendment. By passing Amendment B, and repealing the Gallagher amendment from our constitution, we can avoid making a tough situation so much worse.
The Gallagher amendment was placed in our constitution in 1982. It sets a formula for how property taxes are assessed in Colorado. Because it’s in the constitution, that formula has remained unchanged for nearly 40 years.
Gallagher’s formula states that 45% of property taxes must come from residential properties (homes), and 55% must come from non-residential properties (commercial, manufacturing, agriculture). In order to maintain the formula, as residential property values increase, the residential property tax rate must decrease.
When Gallagher was passed, residential properties made up 53% of the overall property value in the state. Today they account for 80%. That means Gallagher continues to require 20% of the tax base (non-residential) to pay 55% of the statewide property tax bill. The math doesn’t add up, and it shows.
Property taxes become the budgets that fund our schools, fire districts, ambulances and a variety of Boulder County services. It’s no wonder that with Gallagher’s lopsided formula, so many of our schools would face near-constant budget deficits if they were not able to pass mill levy overrides. When local taxes come up short in funding our schools, the state is required to make up the difference. This pulls dollars from so many other essential services and programs that benefit our communities. Higher education, transportation, human services, anything the state helps support is at risk for funding cuts because of Gallagher’s inadequacy.
Not only is Gallagher failing to fund the basic budget needs of our schools and vital county services statewide, but it is particularly damaging to lower income and rural communities. These areas often have fewer non-residential properties, and have seen much slower growth in home values. When Gallagher’s one-size-fits all approach ratchets down rates, it carves away even more funding from services that were already in budget holes.
Amendment B provides an immediate solution to a problem that is guaranteed to deepen. It repeals Gallagher’s unfair, harmful formula from the state constitution and freezes property tax rates. That means that as our communities move toward recovering from a year of unprecedented challenges, residential properties will keep their current tax rate, which is the third lowest in the country.
By freezing rates in place we can provide our schools and vital services with a level of stability they have not had in decades. Amendment B does not increase taxes, it prevents the goal posts from being continually moved at the expense of so many of our neighborhoods.
A majority of Democrat and Republican state lawmakers support Amendment B, and are joined by a growing number of leaders in education, labor, business, agriculture, public safety and fire protection. Amendment B is an important step in moving our communities toward a bright recovery and into the future. Please join us in voting Yes on Amendment B.
Deb Gardner is the Chair of the Boulder Board of County Commissioners and previously served as a state legislator for House District 11. Elise Jones is a Boulder County Commissioner for District 1.