- By Bethany Blankley | Watchdog.org
- Dec 6, 201
Outgoing Gov. John Hickenlooper asked the state Supreme Court to review the compatibility of two constitutional amendments governing the calculations of taxes to determine if one should be removed. The court rejected his request.
The 1982 Gallagher Amendment and the 1992 Taxpayer’s Bill of Rights (TABOR), designed to protect taxpayers, Hickenlooper wrote, created an “irreconcilable conflict in Colorado’s Constitution.”
The Gallagher Amendment sets the percentage for taxing residential and commercial property owners according to a specific formula that allows the residential assessment rate (RAR) to fluctuate and maintain the ratio to prevent large, unexpected spikes in tax bills.
TABOR prevents local and state governments from increasing taxes without voter approval, including any changes to the Gallagher formula.
Hickenlooper argues that more taxes are needed to aid the ailing fire departments and other public services in the state. If Gallagher was eliminated, he argues, state legislators could raise property taxes without voter approval.
In the legal documents submitted to the court, Hickenlooper argued that “Superimposing the TABOR system on the system the Gallagher Amendment created has caused the system to collapse … The effects have become so severe that they have started to cripple the ability of local government to provide essential services.”
The Colorado State Fire Chiefs and the Special District Association of Colorado lobbied Hickenlooper to submit his request to the court for years. In 2017, they asked the court to determine if TABOR controls Gallagher, could Gallagher be removed. The court rejected their request.
“This is a step back for rural Colorado,” Hickenlooper told Watchdog.org in an email. “We were hopeful that our questions would have been considered. [This] decision puts the focus back on the General Assembly.”
The former state legislator who authored the amendment, Dennis Gallagher, and other former lawmakers, wrote a letter to the governor asking him to reject the “radical” request to “wade into matters that should be determined by Colorado voters.” If Gallagher was removed, they wrote, “That to us is radical and an action that would send Colorado into a property tax revolt.”
The issue of raising taxes was also posed to the voters on the 2018 ballot, which they overwhelmingly rejected, Linda Gorman, a director at the Denver-based Independence Institute, says.
“The Gallagher and TABOR amendments to the Colorado Constitution protect Colorado citizens from automatic tax increases,” Gorman told Watchdog.org. “The 2018 ballot included proposals to increase taxes and make Gallagher and TABOR functionally obsolete. They lost.”
Gorman refutes the argument that one amendment weakens the other.
“TABOR does not prevent the state residential property assessment rate from being raised,” she said. “It just says that the people must approve the increase via a popular vote. If they say no, it is true that they are suspending the small details of Gallagher at that time. But they are doing it on a case-by-case basis, not suspending Gallagher. The telling detail here is that in the years where an increase might have been required, Democrats were mostly in control of state government, but they did not push to put an increase on the ballot.”
Penn Pfiffner, a former state legislator and Chairman of the Board of the TABOR Foundation, told Watchdog.org that the Gallagher Amendment “forces the statewide residential assessment rate down when home values go up. For regions within the state where home values do not increase as fast as the average, property taxes go down unless people vote under TABOR provisions to push the property tax back up. There is no conflict.”
One factor to consider is that property values fluctuate, and the state relies on a multi-year process that calculates county assessments. The property value ratio fluctuations are impacted by oil and gas or commercial property increases or decreases, Gorman notes.
Despite these fluctuations, numerous school districts “have found a way to increase their mill levies by ending TABOR restrictions on the amount of money they collect. Contrary to the claims in the Hickenlooper interrogatories, they are not restricted by TABOR and are hardly starved for funds,” Gorman adds.
While the decision by the state Supreme Court was a good one, Pfiffner says, the courts “have consistently weakened taxpayer protections in favor of bigger government. Citizens should not conclude that the threat to the Taxpayer’s Bill of Rights is over, as it will move next to the General Assembly. But for today, we can heave a sigh of relief that the Court acted properly – the debate about restrictions on the power to tax should not originate in the Judicial branch.”