Vail council looks into ballot measure for Gallagher relief
Latest expected drop in residential property tax rate could cost the town $1.4 million per year
What's Gallagher?The Gallagher Amendment, passed by Colorado voters in 1982, sets the proportion of property tax paid by residential and commercial property owners. The split is 45% residential, 55% commercial. The commercial rate has been set since 1982 at 29% of assessed value. Due to the growth in residential taxpayers, that rate has declined over the years. The current residential rate is 7.15%, but is expected to decline to 5.88% next year.
The Vail Town Council on Tuesday put the town on a path to ask voters to maintain current residential property tax rates.
The town is likely to ask voters to exempt the town from the continued downward trend in residential property tax rates. Those rates have been mandated by the Gallagher Amendment to the Colorado Constitution. Voters approved that measure in 1982.
The amendment sets a ratio between residential and commercial property tax rates. The amendment has set the commercial rate at 29% of assessed value. To keep the mandated ratio between commercial and residential contributions to local property tax collections, the residential tax rate has declined over the years.
The current rate is 7.15% of assessed value. To maintain the required ratio, that rate is expected to drop to 5.88% next year.
The Gallagher Amendment has hit hardest in rural areas, resulting in revenue declines for a host of special districts. In Eagle County, voters in the Eagle County Paramedic Services district, the Greater Eagle Fire Protection District and Gypsum Fire District have all approved measures to maintain rates at their current levels.
In Vail, town finance director Kathleen Halloran told the council that Gallagher tax rate declines have cost the town $1.3 million over the past three years. The next cut will cost roughly $1.4 million per year.
The Colorado legislature this year approved asking voters to repeal the Gallagher Amendment, while maintain the residential tax rate at its current level.
Councilmembers said any town ballot question has to be clear in its wording and intent.
Keeping it simple
Councilmember Travis Coggin said the current proposed language — much of which is required by state law — is confusing.
Coggin said he’s in favor of bringing certainty to town budgeting. But, he added, any tax question to town voters needs to be simple.
“I’ve read it, and I don’t understand it,” councilmember Kevin Foley said. Councilmember Jenn Bruno said the town’s message to voters needs to be clear, and should focus on maintaining town services.
“We need to be clear that this puts control in the hands of local government … and this will stabilize our own future,” councilmember Jen Mason said.
While the exact ballot language has yet to be finalized, councilmembers agreed that the town’s question should be put on this fall’s Eagle County coordinated ballot.
Mayor Dave Chapin said participating in the county’s election could bring better turnout.
Town Clerk Tammy Nagel said town and county officials will work up an agreement to get the measure on the Nov. 3 ballot.
Vail Daily Business Editor Scott Miller can be reached at firstname.lastname@example.org.