Vail council ponders ballot measure to exempt town from Gallagher Amendment
Ballot measure would set residential property rate at the current 7.15%
The Vail Town Council Aug. 4 will consider a potential ballot question to address local impacts of the state’s Gallagher Amendment. The discussion item is listed as 3.4 on the afternoon meeting agenda which begins at 2:30 p.m.
The Gallagher Amendment was approved by Colorado voters and adopted in 1982 in response to homeowner concerns over rising residential property taxes. It requires that residential assessed values comprise no more than 45% of the state’s overall assessed value. Non-residential properties, such as commercial and vacant land, make up the remaining 55%.
While the Gallagher Amendment sets the commercial assessment at a fixed rate of 29%, the residential assessment rate must be adjusted by the Colorado Legislature during years of reappraisal to maintain a consistent ratio between total statewide assessed values of residential and non-residential property.
According to a staff memo prepared by Vail Finance Director Kathleen Halloran, the current estimate for residential rates is an 18% decrease or an assessment rate of 5.88%. This will represent the third reduction in property tax collections since 2017. The state’s Taxpayer Bill of Rights, or TABOR, amendment prevents the town from increasing its mill levy to make up for those losses without voter approval.
State lawmakers in have voted to refer a ballot question to Colorado voters Nov. 3 asking to repeal the Gallagher Amendment. If the repeal passes, the state will be able to set assessment rates for both residential and commercial properties at any level they deem fit in the future. However, it is uncertain if the statewide ballot proposal will be approved by voters.
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Several local special districts including the Vail Recreation District, Colorado Mountain College and the Gypsum Fire Protection District have been successful in asking voters to “de-Gallagherize” property tax collections in their jurisdictions, most recently in November 2018.
While the town of Vail’s mill levy is typically 10% of a taxpayer’s tax bill, property tax collections make up 8% of the town’s general gund revenues; $5.9 million is budgeted for 2020. The taxes pay for town operations including fire, police, transit, public works, community development, the Vail Town Library and administration.
During Tuesday’s council meeting, staff will present language for a potential ballot question that would diminish the impact of the Gallagher Amendment by allowing the town to increase or decrease its mill levy in order to effectively achieve a permanent residential assessment rate of 7.15%, the rate currently imposed on residential properties in the town and throughout the state:
SHALL THE TOWN OF VAIL BE AUTHORIZED TO INCREASE OR DECREASE ITS CURRENT AND ALL FUTURE MILL LEVIES ONLY IF, ON OR AFTER NOVEMBER 3, 2020, THERE ARE CHANGES IN THE METHOD OF CALCULATING ASSESSED VALUATION, INCLUDING WITHOUT LIMITATION A CHANGE IN THE PERCENTAGE OF ACTUAL VALUATION USED TO DETERMINE RESIDENTIAL ASSESSED VALUATION DUE TO ARTICLE X SECTION 3 OF THE COLORADO CONSTITUTION (OTHERWISE KNOWN AS THE GALLAGHER AMENDMENT), SO THAT, TO THE EXTENT POSSIBLE, THE ACTUAL TAX REVENUES GENERATED BY SUCH MILL LEVY ARE THE SAME AS THE ACTUAL TAX REVENUES THAT WOULD HAVE BEEN GENERATED HAD SUCH CHANGES IN THE METHOD OF CALCULATING ASSESSED VALUATION NOT OCCURRED; AND SHALL THE PROCEEDS OF SUCH TAXES AND INVESTMENT INCOME THEREON BE COLLECTED AND SPENT BY THE TOWN AS A VOTER APPROVED REVENUE CHANGE IN 2020 AND IN EACH YEAR THEREAFTER, WITHOUT REGARD TO ANY SPENDING, REVENUERAISING, OR OTHER LIMITATION CONTAINED WITHIN ARTICLE X, SECTION 20 OF THE COLORADO CONSTITUTION OR SECTION 29-1-301, COLORADO REVISED STATUTES, AND WITHOUT LIMITING IN ANY YEAR THE AMOUNT OF OTHER REVENUES THAT MAY BE COLLECTED AND SPENT BY THE TOWN?
For the question to be included on the Nov, 3, ballot, the ballot language needs to be submitted to the Eagle County Clerk and Recorder no later than Aug. 25. This would require passage of a resolution by the council setting the ballot language for the general election.
To see the staff memo on this topic, go to vailgov.com. To provide public input to the council prior to meeting, email firstname.lastname@example.org. Emails will be accepted until noon on the day of the meeting. To provide public input during the virtual meeting, register to attend at http://www.vailgov.com/town-council. The meeting is live streamed at HighFiveMedia.org/live-five.