Eagle County voters facing several Gallagher-relief questions
Besides the state question, voters in Eagle County and three towns will also vote for Gallagher relief
County voters this year will face several ballot issues asking essentially for the same thing: relief from the property tax assessment rate cuts that come with the 1982 Gallagher Amendment to the Colorado Constitution.
The state has Amendment B, a repeal of the amendment. Locally, Eagle County, the towns of Eagle, Avon and Vail and the Eagle River Fire Protection District all have questions on the Nov. 3 general election ballot as well. The Avon-based fire district will send out its own ballots to voters in the district.
The question for the county and towns all have the same basic ballot title:
“Sustaining Existing Levels of (entity) Revenue from Future State Imposed Reductions in Residential Assessed Valuation Rates Due to Article X, Section 3 of the Colorado Constitution (Gallagher Amendment) or Similar State Action.”
In addition to the local ballot titles, all the entities asking the question this year worked together to create almost-identical ballot language. This language is from the county’s question:
“Without raising the mill levy for the 2021 tax collection year, shall the Board of County Commissioners for Eagle County have the authority to adjust the county’s mill levy rate thereafter as needed for the sole purpose of maintaining revenues that may otherwise be lost as a result of state imposed reductions in the ratio of assessed property tax valuations so that actual tax revenue generated by the county’s mill levies are the same as the revenues that would have been generated had the state not imposed such reductions, in order to allow the county to sustain existing services…”
What does that mean?
What the local governments want to do is exempt local assessment rates from the requirements of the Gallagher Amendment. Here’s how that works.
The amendment sets a permanent ratio between residential and commercial property. Commercial property must always pay 55% of property tax collections throughout the state. Residential property makes up the remainder.
At the time the amendment was passed, residential property was taxed at roughly 30% of its county-assessed value. Commercial property was taxed at roughly 29% of its county-assessed value.
The commercial rate has been fixed since Gallagher passed. But residential growth has vastly outpaced commercial growth. To maintain the mandated ratio, the residential assessment rate has fallen over the years and is currently at 7.15%. The residential assessment rate is expected to fall to 5.88% in 2021.
According to town of Vail finance director Kathleen Halloran, that decline could cost the town $1.4 million in revenue next year.
The assessment rate declines have hit hard in rural areas. The Gypsum Fire Protection District, the Greater Eagle Fire Protection District and Eagle County Paramedic Services are three of many districts around the state that have already received voter permission to freeze assessment rates.
So many local governments and districts asking for Gallagher relief might create a good bit of voter confusion. Eagle County Attorney Bryan Treu answered a handful of questions regarding all those issues via email.
Q: If the state’s measure passes, does that make the local issues moot?
A: We are hopeful the state measure passes and the BoCC will be adopting a resolution in support of Amendment B. However, our local questions do not become moot if Amendment B passes. Amendment B would remove the requirement of an automatic residential assessment rate reduction, but it would not preclude the legislature from taking similar action in the future.
The legislature passed a bill last session that will take effect if Amendment B passes (Senate Bill 20-223). Although it purports to be a moratorium on lowering residential assessment rates, that moratorium is only in effect until the legislature decides to do something different. Voter approval is not required to take this action. That is preferred over a mandatory reduction, but still concerning to us.
As we have seen in the past with Gallagher, the impacts of a residential assessment rate reduction are felt here but caused by the exponential housing growth on the Front Range. The Front Range may have more housing units to help offset or recoup a reduction. We do not. Accordingly, a local solution is preferred over a statewide solution. Our local questions protect us from future residential assessment rate reductions whether caused by Gallagher or caused by the state legislature in a post-Gallagher world.
Q: If the state’s measure fails, do the local issues do what the state’s issue would have?
A: Yes, our local measures would accomplish keeping our revenues the same prior to any state-imposed reduction in residential assessment rates. Our questions would allow us to backfill the revenue that would have otherwise been lost from such a reduction.
Q: If all the measures pass, what’s the effect on setting assessment rates and mill levies into the future?
A: If the legislature was no longer mandated by Gallagher to lower the residential assessment rate and kept the current residential assessment rate at 7.15%, there would be no changes to our local mill levies. Our questions only authorize us to increase mills to offset lost revenue in the sole circumstance where the state lowers the residential assessment rate. If the state chose to lower the residential assessment rate due to Front Range growth or other circumstances outside of our control, we could then, and only then, recoup that lost revenue.
Vail Daily Business Editor Scott Miller can be reached at email@example.com.
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