Opponents To Property Tax Ballot Measure Say Lawmakers Manipulated Nonpartisan Voter Guide

Kevin J. Beaty/Denverite
Houses on a Denver area hillside.

Coloradans will be asked this fall whether to repeal the Gallagher Amendment, a provision in the state constitution that caps residential property tax rates.

But the group fighting the measure says the way the state plans to explain it to voters is misleading, and they’ve filed suit to demand a rewrite.

“Protect Our Homes Colorado” has asked a Denver District Court judge to change the language in the state official voter guide — the Blue Book — that’s mailed to millions of voters, and halt its printing until that happens. The language is typically written by nonpartisan staff on the Legislative Council, the legislature’s research arm.

But in this case, large pieces of the Blue Book description were rewritten by legislators, including House Majority Leader Alec Garnett, D-Denver, and state Sen. John Cooke, R-Greeley.

"It's all with the goal of making sure that the actual language in the Blue Book will match what the public will hear in the debate,” Garnett said at a committee meeting last week.

That change to match the coming political debate is precisely the problem, said Clay Vigoda, campaign manager for Protect Our Homes Colorado.

"They disregarded the legislative council staff's attempt to make this unbiased and non-partisan, which is required by the Colorado constitution,” he said in a press conference Wednesday. “And instead they made wholesale changes that basically turned the Blue Book language on Amendment B into campaign propaganda for the yes vote."

Voters passed the Gallagher Amendment in 1982 as a way to limit residential property taxes. Backers say it’s saved homeowners $35 billion since then. But opponents say it’s led to the underfunding of vital government services like schools and fire departments and put a larger financial burden on businesses.

The most significant change to the voter guide language, from Garnett, rewrote the arguments in favor of Amendment B. It and two other minor amendments to the guide passed on a 15-3 bipartisan vote last week.

Original pro arguments, as summarized by Legislative Council staffRe-written pro arguments from Rep. Garnett
Current constitutional provisions disproportionately impact rural and poor communities. Increases in home values on the Front Range result in a lower residential assessment rate for the whole state. This drives down the taxable value of residential properties in rural areas, meaning that local services such as fire protection, sanitation, and library services, may be reduced or eliminated because of property values elsewhere in the state. Amendment B prevents further reductions in these important services as a result of residential assessment rate decreases under current law.The Gallagher Amendment is outdated and full of unintended consequences. If the Gallagher Amendment is not repealed, owners of high-end homes in Denver’s wealthiest neighborhoods would get a tax cut next year, while small businesses and farmers would pay a larger share of property taxes. The Gallagher Amendment causes small businesses to be taxed at a rate four times higher than residential property owners, and penalizes rural and low-income communities that lack a significant commercial tax base.
Amendment B makes property taxes more equitable. Nonresidential property owners, including businesses, farmers, and ranchers have paid an increasingly higher proportion of property taxes over time relative to residential property owners. Currently, nonresidential property taxpayers pay 55 percent of the tax burden, but represent only 20 percent of total property value. Conversely, residential property owners only pay 45 percent of the tax burden and make up 80 percent of property value in the state.Colorado has some of the lowest residential property taxes in the nation, and  Amendment B fixes property tax assessment rates at their current levels. Amendment B is not a tax increase. Under Amendment B, the property tax rates homeowners and businesses pay could only be increased by a vote of the people.
Amendment B prevents a school funding shortage from becoming a state budget crisis. With each decline in the residential assessment rate, the local contribution for school funding decreases and the state funding requirement increases. The state share of school finance rose from 48 percent in 1982 to 60 percent in 2019, and is expected to continue to grow. The higher state share for school finance has shifted funding from other important state programs and services, such as transportation infrastructure, human services, and public safety. Amendment B will prevent deep cuts to schools, hospitals, fire protection, and other local services in many areas of the state. Declines in the residential assessment rate caused by the Gallagher Amendment have resulted in significant reductions in vital services provided by local governments, particularly in rural and low-income communities. Amendment B allows local governments to continue providing services that their communities expect.

The split over the Blue Book issue, and indeed on the Gallagher Amendment itself, does not follow party lines. The bill referring the repeal to voters was sponsored by Republicans from the Denver suburbs and the Western Slope as well as Democrats from Denver and Pueblo.

“These are the amendments that the committee made because it is vital that the public understand the full picture of Gallagher – the good, the bad, and if you’re a small business or rural fire department, all of the ugly wreckage that the Gallagher Amendment has caused,” state Rep. Matt Soper, R-Delta, one of the prime sponsors, wrote in a statement defending the language.

The opposition to the Gallagher repeal includes conservative groups like Colorado Rising State Action, as well as the authors of the Gallagher Amendment — former Democratic state legislators Dennis Gallagher and Ron Stewart, and former Democratic House Speaker Dickey Lee Hullinghorst. She joined the lawsuit against the state, saying legislators “almost completely disregarded” the months of work by nonpartisan staff.

"I'm very pained really, and disappointed, to have to say that the process went seriously wrong for this one ballot measure,” she said.

The Blue Book is set to go to the printer on Sept. 10 if the court doesn’t intervene.