5 questions to Consider Before Repealing the Gallagher Amendment

Colorado’s constitution gives our legislature the power to refer changes to the constitution for the people to consider at ballot times. Two thirds of the legislators have to vote to put a referred measure on the ballot for the people’s consideration.  That’s exactly what Senator Ron Stewart and I did back in the early 1980’s. And over two thirds of our fellow legislators did the same to place a referred measure called the Gallagher Amendment on the ballot in 1982 for the people’s consideration. Since then, Gallagher has been doing what it was supposed to do: make sure that residential property taxes do not rise above 45% of the total property tax pie in Colorado. The people voted 65% to 35% in that election to protect their residential tax rates from going through the roof. The people felt the amendment was fair.   

So now come two legislators, as allowed under their constitutional powers, State Senator Chris Hansen, D-Denver and State Representative Jack Tate, R-Centennial who have announced they will refer an amendment to the General Assembly to repeal the homeowner protection amendment.  They are aiming for this November’s ballot. Even Governor Jared Polis has jumped aboard the effort.   

Voters should start studying legislators’ hasty proposals now to make sure they understand what repeal of Gallagher means for their home taxes and for business taxes. And granted, there have been some issues with Gallagher and, as St. Augustine said long ago, “An unquestioned faith is a weak faith.” While I am proud of the original intent of Gallagher to keep home property taxes manageable, let us see what changes Tate and Hansen come up with in their repeal of Gallagher. Let’s see if they come up with something better. And will it be fair?   

Here are 5 questions voters should consider as we continue down this path to legislative repeal of protection of the middle class in Colorado’s constitution. I confess I feel a little like the Mother Superior in the Sound of Music” when she wondered what she could do about a problem like Sister Maria. “What are we going to do about a problem like Gallagher?” Let’s review these study questions for the ultimate test on this November’s ballot. As reasonable and rational people we will be anxious to see the results of their efforts.

1.  Firstly, why have Tate and Hansen singled out homeowners for their tax repeal? I am informed that there are over 160 tax breaks given to businesses in Colorado. Tax laws exempts tax on ink and printing paper for newspapers and even bull semen is exempted from tax for our cattle industry folks. I think home tax payers would appreciate the legislature questioning all of the business tax breaks afforded that class as they look to repeal the only protection given to middle class residential rate taxpayers. This is not fair at all. 

2. Perhaps Hansen and Tate might want to look at a short term solution. Consider foregoing the two year assessment cycle and go to a 4 or 6-year cycle during the pandemic. I bet even our Libertarian-minded Governor might think this remedy in the short term will keep funds for schools as stable as possible during the downtime. 

3. A big point being missed in all this is that the residential assessment ratio will go down  because “all other” classes of property will decline in value. So supporters of repeal say they are trying to save the $450 million in residential taxes that would be lost if the residential assessment ratio goes down without  saying that all other classes of property will have a $500 million plus reduction in their taxes next year. So are we saying it’s ok to have all others pay less in taxes but residential property owners have to keep paying what they paid before? Is this not a tax increase on residential property both next year and in the future if residential property was going to be reduced because of the reduction in the residential assessment ratio? One of the most persuasive arguments for Gallagher in 1982 was that Coloradans saw it as fair. 

4. If Hansen and Tate simply repeal Gallagher does that not allow for home property taxes to increase the residential side of the property tax pie?  Friends, don’t be misled, this effort is all about increasing home taxes and the legislature should be clear on how much home taxes will increase under their proposals.  

5.The final question voters should ask is how much more do you want homeowners to pay in  property taxes so business classes can pay less? Tate and Hansen have to answer this question to persuade voters their changes are fair.   

Voters get ready for the test on the November ballot. Let’s see what the legislature comes up with.  The people of Colorado are the final judges on any changes to their state constitution. 

The Honorable Dennis Gallagher is a former city auditor, city councilman, state senator and state representative. He’ll be sharing thoughts and stories from North Denver’s past and future in his reoccuring column in the North Star.