Colorado’s Constitutional conundrum: Gallagher vs. TABOR amendments, and what it means for us

FYI. Posted as it mentions TABOR and you can see what the other side is saying….

EAGLE COUNTY — Call it the Colorado Conundrum.

Colorado homeowners in the next couple of years will see a property tax break, while our state government is forced to make budget cuts. That’s because we stand at the crossroads of a couple of constitutional amendments — Gallagher and the Taxpayers Bill of Rights, or TABOR.

Tim Hoover is the communications director for the Colorado Fiscal Institute, a nonprofit and nonpartisan fiscal policy and analysis organization. They don’t have a dog in this fight, but if they did they’d root against TABOR.

“This is a profoundly serious problem. TABOR is not a watchdog. It’s a rabid dog,” Hoover said. “TABOR is literally threatening public safety.”

When the Gallagher Amendment intersects with TABOR, that causes problems, Hoover explained.


That conflict is not as complicated as you might think, and it goes like this:

Colorado voters approved the Gallagher Amendment in 1982.

The Gallagher Amendment changed the way homes were appraised for property tax purposes. It also mandated that the amount of property taxes collected on homes had to always be lower than the amount of property taxes collected on non-residential property.

Gallagher stipulates that residential property taxes would be capped at 45 percent of the state’s total property tax revenue. Nonresidential property taxes comprise the other 55 percent.

Non-residential property is taxed at 29 percent of its value. Residential property is currently taxed at 7.96 percent, but the residential rate can fluctuate to maintain that 45/55 split.

You are not taxed on your property’s total market value. You’re taxed on the assessed value.

For residential property taxed at 7.96 percent, it works like this:

Let’s say your home is worth $350,000. Multiply $350,000 by 7.96 percent, and your assessed value is $27,860. That’s the amount on which your residential property is taxed.

Multiply that by a taxing entity’s mill levy — a bureaucratic term for property tax rate — and that’s what you’ll pay that taxing entity. Add up all of the mill levies for all of the taxing entities in your neighborhood, and that’s your property tax bill.


You can either do your own math, or Eagle County Assessor Mark Chapin — Colorado’s Assessor of the Year — and his crew will do it for you.

Gallagher defines non-residential property as commercial, farms, oil and gas property, vacant land and a handful of other categories.

Property taxes are collected locally, at the county level. Eagle County Treasurer Teak Simonton distributes that tax money to the local, county and state entities that are supposed to receive it.

Colorado’s schools are funded through those local property tax dollars, as well as other kinds of taxes collected at the state level. If local taxes come up short, then the state is on the hook to make up the difference.

Other entities don’t have that safety net. Last May, voters living in the Gypsum Department and Eagle River Fire Protection District, as well as the Eagle County ambulance district approved tax increases.

Anyway, back to school funding, to which county voters also gave a boost in 2016.

In the early 1980s, local property taxes paid 54 percent of the state education budget; the state paid 46 percent.

By 2015, the state was providing 66 percent of the state’s education budget, while local property taxes paid 34 percent.

This happened because the Gallagher Amendment mandated that the residential property tax rate shrank from 21 percent in 1982, to 7.96 percent in 2003, where it remains.

The tax rate declined because home values continue to increase, while the Gallagher Amendment mandates that 45/55 split with non-residential property.


Here’s where the Gallagher Amendment collides with the TABOR Amendment — which Colorado voters approved in 1992.

TABOR demands that all tax increases be approved by a vote of the people. Local governments sometimes skirt that requirement by calling an increase a fee, instead of a tax.

Property tax rates can be reduced without voters’ permission to maintain the 45/55 Gallagher split, but TABOR prohibits tax rates from being increased without a vote.

In 2017, residential property values are increasing again.

To maintain the required 45/55 taxation split, property tax rates will likely have to be ratcheted down again, probably to somewhere around 6.56 percent, according to projections by the Colorado Fiscal Institute.

Businesses, meanwhile, are still being assessed at 29 percent — four times the rate that homes are.

The pinch feels different in different parts of the state. If you’re in places such as Pitkin or Eagle counties, or the Front Range where home values continue to increase, then the fiscal impact on schools might not be as dramatic as in Conejos County, one of the nation’s poorest areas. But that split is affecting local revenues throughout the state.

Staff Writer Randy Wyrick can be reached at 970-748-2935 and

Colorado’s Constitutional conundrum: Gallagher vs. TABOR amendments, and what it means for us

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