DENVER, CO – The House today passed Joint Budget Committee (JBC) Chair Daneya Esgar’s bipartisan bill to repeal the Gallagher Amendment. The bill would ask Colorado voters to decide whether to repeal the Gallagher amendment. The bill passed by a vote of 47-18.
“Colorado’s schools, libraries, firefighters, police officers, and special districts can’t afford the Gallagher amendment,” said Rep. Esgar, D-Pueblo. “Today we’re asking voters to decide whether we do away with a policy that is no longer delivering on its original intent. I’ve worked on this issue for long enough to know first hand that the Gallagher Amendment is hampering our local governments’ ability to properly fund needed services. It’s time to relegate it to the history books.”
Passed in 1982, the Gallagher amendment requires local jurisdictions to adjust property taxes in order to maintain a 45/55 statewide ratio between residential and commercial property tax collections. Gallagher originally intended for local governments to be able to raise and lower their local property taxes in response to fluctuating property values to ensure adequate local tax collections to support vital services including our K-12 schools and fire districts. However, the passage of TABOR in 1992 prevents local jurisdictions from raising property taxes without voter approval. Consequently, the rise in local property values has drastically reduced the residential assessment rate from 21% in 1987 to 7.15% today and shifted the tax burden to commercial properties, increasing costs for our small businesses across the state.
SCR20-001 refers a question to Colorado voters to decide whether to repeal the Gallagher amendment in order to prevent a further decline in the residential assessment rate, as required by Gallagher. Failure to pass the repeal will result in a further decrease in local property taxes, increased state obligation to fund K-12 education, and heightened pressure to cut other services to maintain a balanced budget. SB20-223 is a companion bill to SCR-001 that will freeze the property tax assessment rate if Coloradans approve the ballot measure.