What is the Gallagher Amendment?
A 1982 addition to the Colorado Constitution that is now threatening local government services in rural areas, the Gallagher Amendment includes a formula that attempts to keep statewide residential and non-residential property taxes at a 45/55 ratio. This is accomplished by artificially lowering residential tax assessment levels when property taxes are out of balance due to growth in a particular region of the state. Since the addition of the Gallagher Amendment in 1982, statewide residential assessment rates have been lowered from 21% to 7.2%, a reduction of nearly two-thirds. Gallagher accomplishes required rebalancing of the ratio by lowering statewide residential assessment rates while non-residential assessment rates remain fixed at 29%.
Why would the Front Range growth have anything to do with CMC’s property tax revenue?
The Gallagher Amendment calculation is based on a statewide average. Thus, the large population and infrastructure in the Front Range dominates the rural areas small percentage of the total state property values and drives the assessment rate down regardless of what is happening in rural Colorado.
Does this affect any other entity than CMC?
Yes. Locally funded organizations like fire districts, sanitation districts, counties and Colorado Mountain College are affected by artificial adjustments mandated by the Gallagher Amendment.
Will this raise my taxes?
Importantly, measure 4B is not an automatic or unlimited tax increase. It simply enables CMC's elected board to recover only those revenues lost by CMC due to growth in Colorado's Front Range property values. Residential taxpayers would pay the same level of CMC property tax as they would have paid prior to a Gallagher adjustment. If 4B had been in effect this year, the Gallagher residential rate drop would have equated to only $3 per $100,000 of assessed value. That is about the cost of a cup of coffee. CMC is asking to retain the $3 in order to maintain revenues at today’s level. Taxpayers other than residential could experience a small increase in taxes (this year would have been $7 per $100,000 of assessed value), depending on the amount of the adjustment in the Gallagher rate.
Why is 4B important to our communities?
Measure 4B allows local voters the opportunity to create a common sense way for our rural mountain communities to protect its 50-year investment in higher education, ensuring that future generations of students and community members have access to affordable, accessible college in their local communities.
How much tax revenue has CMC lost due to the Gallagher Amendment rate adjustment?
In 2017, the State significantly reduced the property tax assessment rate (from 7.96 to 7.2), causing a revenue reduction to CMC of over $2.7 million. It is projected that this level will be lowered again as long as growth in the Front Range continues to outpace growth in rural Colorado. The only direction this assessment can go is toward zero, causing CMC to limit or eliminate many of its services.
Why doesn’t the state legislature adjust the rates for various areas of the state where growth is not as great as on the Front Range?
The Gallagher Amendment is written to calculate the 45%/55% ratio described above on a statewide average. Because this is an amendment the legislature cannot change it. A statewide vote is needed to change or repeal the Gallagher Amendment. Assessment rates cannot be increased by the legislature either. The legislature is only authorized to reduce the residential assessment rates.
Why do we have to vote on this issue?
This issue is being referred to the voters as required by the TABOR amendment of the Colorado constitution.