Amendment 32 merits "no’ vote
Colorado’s triple threats to the tax base – Gallagher, TABOR and education’s Amendment 23 – may well need revamping in time. But Amendment 32’s tinkering with Gallagher is not the answer, or even much of a beginning to an answer.
The effect on residential property owners would be a tax increase, in exchange for a break for commercial property owners.
Proponents see this as a way to make Colorado more enticing to business. But while commercial property taxes have been rising as residential rates drop, this state remains among the most business-friendly in the country when the total tax load is considered.
In short, the aim of the amendment is to fix a problem that the state does not currently have, while raising property taxes for the overwhelming majority of Colorado residents who own homes. Huh?
The amendment would abolish Gallagher’s requirement that state property tax fall 55 percent on commercial and 45 percent on residential property owners, as well as freeze the taxable portion of residential property at 8 percent. The current residential level is 7.96 percent.
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Under the Gallagher Amendment, approved by voters in 1982, the residential assessment rate decreases when residential property value statewide rises faster than the commercial value. That’s been the case, with Colorado’s tremendous growth. If commercial property values rise faster than residential, the state must get voter approval to raise the residential property taxable rate.
Boiled down, the amendment means homeowners would see a property tax rate hike to help fix a problem that does not exist – yet.
Better to shelve this half-measure and come back to the voters with genuine reform of that “perfect storm” of tax law – that is if it ever manifests into a genuine threat to essential services.