Photo Credit: Auburn Examiner
Ballots are now hitting mailboxes throughout El Paso County. We appreciate that you, the SpringsTaxpayers.com readers, do your homework at election time. Several of you have contacted us about Amendment B —the repeal of the Gallagher Amendment.
A bipartisan group of legislators came up with the repeal idea, and referred it to the ballot. This was not a citizen-led initiative.
Following extensive, government-mandated business shut downs, supporters of Amendment B claim that it is an effort to help fuel the recovery from the COVID-19 pandemic, and to ease the burden on businesses. We have empathy toward businesses that have suffered under the unreasonable government-imposed mandates. But politicians passing the buck down the line to the homeowners and renters —who are also suffering financially— isn’t an acceptable solution. This isn’t the first time they’ve come after Gallagher. We suspect we’re in a, “never let an emergency go to waste,” scenario, as the proponents of Amendment B would eliminate a residential tax protection during a pandemic, in order to swell the coffers of government.
Before we explain why Amendment B, the repeal of the Gallagher Amendment, deserves a NO vote, let’s take a look at the state’s explanation of the 1982 amendment and its original intent.
Q:Why was the Gallagher Amendment passed?
A: The passage of the Gallagher Amendment by the voters of Colorado in 1982 was the culmination of a property tax revolt that originated in the late 1970’s. Homeowners, concerned about skyrocketing residential property taxes, pressured the state legislature to address the problem. As a result, in 1982, Speaker of the House, Bev Bledsoe appointed nine members from the General Assembly to study the problem and recommend solutions. The Gallagher Amendment was the culmination of the panel’s effort to find a workable solution to skyrocketing residential property taxes.
Q: What does the Gallagher Amendment do?
A: The Gallagher Amendment divides the state’s total property tax burden between residential and nonresidential (commercial) property. According to the Amendment, 45% of the total amount of state property tax collected must come from residential property, and 55% of the property tax collected must come from commercial property. Further, the Amendment mandates that the assessment rate for commercial property, which is responsible for 55% of the total state property tax burden, be fixed at 29%. The residential rate, on the other hand, is annually adjusted to hold the 45/55 split constant.
Now, let’s examine Amendment B’s language on this year’s ballot.
Amendment B: “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?”
The ballot language says, “without raising property tax rates.” That part is technically true, but is deceptive. It won’t raise tax rates, but it will raise tax amounts. We have yet to write a check for a tax rate, it’s the dollar amount that affects our checkbooks.
When residential property valuations are assessed next in 2021, most people will pay higher property taxes in 2022, 2023, and beyond, due to the home values increasing, and with no assessment rate decreases, courtesy of Gallagher.
How does Amendment B impact residential property owners?
With a “yes” vote on Amendment B, residential property owners will pay more in taxes in 2022 and beyond. That is because the market value of your house will go up, while the assessment rate remains constant at around 7.15%. The assessment rate will not fluctuate, as we’re no longer protected by Gallagher.
With a “NO” vote on Amendment B, residential property owners will pay less in taxes in 2022 and beyond. That is because the market value of your house will go up while Assessment Rate will go down to 5.88% due to Gallagher protections.
Here’s an example provided by the El Paso County Assessor’s Office, of a home in Briargate for the current tax years 2020/2021:
Next is what the Briargate homeowner would be paying in 2022/2023 if Gallagher is repealed with a “yes” vote. This would be an increase of $342.20 a year for this home for 2022 and 2023 due to the market value increasing and assessment rate being fixed:
Next is what the Briargate homeowner would be paying in 2022/2023 if Gallagher remains in place with your “NO” vote. This would be a decrease of $124.87 for this home for 2022 and 2023 due to an assessment rate decreasing to adjust for Gallagher:
Our concern for El Paso County residents:
With a housing shortage, high home prices, and sky-high rent prices, expect our valuations to increase as the housing market remains hot. Many families are under financial burden after COVID-19 shutdowns. Can homeowners and renters afford a $350 increase in property taxes? Let’s not pass the buck down the line to the homeowners and renters. Removing Gallagher will hurt those who are most vulnerable and have difficulty paying the high mortgage and rent prices in Colorado.
Our low property taxes are one of the few expenses where Coloradans catch a break. There are many areas where we don’t catch a break. Colorado Springs residents hold jobs that pay 13.2% below the national average. Colorado Springs cost of living is 3% higher than the rest of the country. Cost of groceries in Colorado is 2.5% higher than the rest of the country. We have the 6th highest home costs of the 50 states. We rank #11 of the 50 states for car insurance and home insurancepremiums.
Low property taxes are one of the few low-cost perks we have left! We took a look at how our tax burden compares to other states. Colorado is #24 in the nation, so right in the middle. It stings when our local politicians say that we need to raise property taxes, and shame us by saying how little we’re paying. Don’t buy into it, folks. Government needs to get its spending priorities straight. They’ve had record revenues in recent years. Where did that money go?
Gallagher was put in place for a reason. Let’s protect homeowners. Vote “NO” on Amendment B to ensure the protection remains.