It’s official: Colorado voters will decide in November whether they want to make a major change in the state’s approach to taxes by repealing the Gallagher Amendment.
Two-thirds of each chamber of the state legislature had to approve of the repeal proposal to place it on the ballot, and both did so this week: House members voted for it 47-18 on Friday morning, following a 27-7 vote in the Senate on Tuesday.
If approved by voters, the Gallagher repeal would keep residential property tax rates from dropping in future years, saving schools, local governments and the state from taking huge financial hits as a result of the coronavirus-induced recession.
The proposal garnered significant GOP support at the Capitol. Sen. Jack Tate, R-Centennial, and Rep. Matt Soper, R-Delta, both sponsored the effort, and about a half-dozen Republicans in each chamber backed them. Democrats are united behind the repeal request.
Referred ballot measures don’t need Gov. Jared Polis’ signature, although he has said he supports the proposal.
Gallagher, named for former state Sen. Dennis Gallagher, was initially approved by voters in 1982, with a goal of limiting residential property taxation and forcing business to pay a higher tax share. Through a required balance between residential and commercial tax rates, one of its effects has been to bring down residential property taxes to near the lowest in the nation. Property taxes help fuel local districts of all kinds, and if the Gallagher Amendment is not repealed, legislative analysts predict, K-12 education alone will lose half a billion dollars next year.
“Colorado’s schools, libraries, firefighters, police officers, and special districts can’t afford the Gallagher Amendment,” said state Rep. Daneya Esgar, D-Pueblo, who chairs the legislative budget committee. “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 how the Gallagher Amendment is hampering our local governments’ ability to properly fund needed services. It’s time to relegate it to the history books.”
The next hurdle for proponents is to sell the repeal to voters.
“We go now to the citizens of Colorado with broad, diverse support,” Tate said, “from the business community, rural Colorado, those districts that are supported by tax revenue — hospital districts, fire districts, law enforcement. Stability is important for everybody, whether it’s the fire district or the business community.”
Tate and Sen. Chris Hansen, D-Denver, led the effort from the start, inspired to act by the coronavirus pandemic that’s plunged Colorado governments, state and local alike, into budgetary crisis. The legislature does not have the ability to raise taxes on its own, nor do state governments, and so referring this measure is one of a few tools lawmakers have broken out to try to address the state’s billion-dollar shortfall.
Following the House vote Friday, Hansen said voters this fall should consider the roughly $500 million on the line for schools.
This may not be the only major fiscal reform on the 2020 ballot. Initiative 271 seeks to generate billions by raising income taxes on Colorado’s richest people while lowering them for everyone making less than $250,000. Initiative 306 seeks to do the opposite by lowering income taxes across the board and thereby cutting into state revenues. However, neither initiative has qualified for the ballot yet.
