Colorado voters set to repeal Gallagher Amendment
The Colorado Sun
Colorado voters approved Amendment B and jettisoned the Gallagher Amendment in a landslide, repealing the landmark constitutional provision that has delivered more than $35 billion in property tax cuts to homeowners and fundamentally reshaped government spending over the last four decades.
With 2.4 million votes tallied, the repeal effort was leading 58 percent to 42 percent.
If the results hold, it would represent a major victory for top state lawmakers, business leaders and liberal fiscal reform advocates who have been trying for years to get voters to relax some of Colorado’s unique constitutional restraints on taxes and public spending.
The decision prevents an estimated $491 million in cuts to school districts and another $204 million in cuts to county governments next year, amid a financial crisis that could get worse as coronavirus cases spike across the state. Those figures don’t even include the potential impact to cities or to special districts that provide essential services like fire protection and health care if Gallagher remained in place.
In exchange, voters would be giving up an estimated 18% residential property tax cut that was expected to take effect in 2021, forgoing financial relief for homeowners and renters alike amid an economic crisis.
Gallagher’s costs and benefits — unequally distributed across the state — have carved out a complicated legacy since its passage in 1982. On the one hand, it has largely delivered on its core promise of property tax relief, saving homeowners an estimated $2.8 billion last year alone, according to a state fiscal analysis. But its downsides have rippled throughout the state in uneven ways, squeezing local services in rural areas and shifting higher taxes onto businesses in some communities when residential taxes fall.
Gallagher limits residential taxes to 45% of the statewide property tax base. So when home values rise faster than those of businesses, it can trigger tax cuts for homeowners, helping offset the rising cost of housing. But because of the sheer volume of people who live on the Front Range, the housing market in the broader Denver area dictates the property taxes people pay all over the state, cutting tax revenue even in parts of rural Colorado that didn’t have much to begin with.
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