C olorado’s Gallagher Amendment is not the reason why local governments and schools are underfunded in Colorado, and approving Amendment B won’t solve the state’s critical underfunding problems.
The impetus for the constitutional amendment, the legislation behind it and the measure itself are impossibly complicated and perilously intertwined with other laws and Colorado’s broken tax system.
Sign up for our free newsletter to receive the latest news
Sign up for our free newsletter to receive the latest news
Ballot Question Amendment B sounds relatively simple. As stated, it would remove the so-called Gallagher Amendment from the state Constitution. The amendment, saddled on the state by voters in 1982, forces commercial property owners to pay a greater rate of property taxes across the state than homeowners.
If making businesses pay a bigger share of property taxes instead of homeowners sounds good to you now, it’s because it sounded like a good idea to voters back then. Before the Gallagher Amendment, the State Legislature was free to assess and adjust the tax burden as it saw fit. The big picture is that state residents elect leaders who represent their view on taxation and other issues, and the state government — and taxes reflect — then reflect the will and mood of the people.
During the 1980s, Colorado grew quickly, along with state expenses, and taxes. The argument for passing the Gallagher Amendment was that elected officials were more influenced by deep-pocketed businesses, who could make big campaign contributions and hire persuasive lobbyists. Gallagher nullified that influence on property taxes by setting in stone a fixed ratio of commercial property taxation. One of the biggest problems the Gallagher Amendment created stems from property values rising at different rates across the state. One size never fits all when it comes to tax formulas.
Over the years, lawmakers learned to work with it. It forced legislators to look elsewhere for taxes to fund schools, roads and other services. Sales taxes, income taxes and other assessments grew.
Residents from states like Texas marvel at Colorado’s relatively low property tax rates but are shocked to see their paychecks dinged by the state and solid sales taxes added to everything but groceries and prescriptions. Despite the false claims and threats by many on the right side of the political spectrum, Colorado’s overall tax bill has never been excessive and isn’t now, compared to other states. Colorado regularly hovers among the top-ten lowest overall taxes among states.
That’s nothing to brag about. The reality is that Colorado schools, roads, colleges and other critical programs are underfunded. A drive across town or across the state confirms that reality. That wasn’t caused by the Gallagher Amendment.
The real problem in Colorado came from the adoption of the so-called Taxpayer Bill of Rights in 1992. That ill-conceived measure removed all flexibility and power in taxation from state lawmakers. It’s an idea created by far-right tax protesters that’s so bad that not a single other state has ever adopted it. Even deeply conservative states saw how unworkable and destructive the messy law is, something Colorado residents know first hand.
After it was passed, the effect of the Gallagher Amendment inadvertently began eating into school and local government budgets, because lawmakers couldn’t adjust taxes affected by changing property values and the other formula inconsistencies that became part of two mandatory laws.
The state tax mess became irrevocably broken when a third, conflicting tax mandate was approved in 2000 as Amendment 23. That measure, intended to counter the disastrous, resource-draining effects of TABOR, guaranteed that overall public school funding could not be reduced year over year, and instead, must grow at the rate of inflation. Without the ability to adjust or raise taxes, the only answer for years has been to take tax money intended for state roads, colleges and other programs and divert it to public schools.
The result is an unworkable and damaging state tax system that defies the wisdom of republican democracy and regularly endangers the state and public.
But out of the three, conflicting and unworkable forces undermining a once smart and fair tax system in Colorado, the Gallagher Amendment is the least damaging and will provide the least relief in fixing the problem of underfunded schools, roads, colleges and local governments.
Removing Gallagher from the state Constitution while leaving TABOR and Amendment 23 intact is like changing the kitchen faucet in hopes of fixing a household well that keeps going dry.
The end result of passing Amendment B can only be to raise taxes, primarily on homes, by removing the part of the law that ensures commercial property bears the larger brunt of a rising bill.
Passing this measure will only create different problems for Colorado. It won’t fix old ones. To do that, state lawmakers must ask voters to removed Gallagher, TABOR and Amendment 23 from the state Constitution and return control of state finances to elected representatives.
Too many far-right lawmakers are unwilling. Too many moderate and liberal lawmakers are too timorous — so far. The mistaken perception created by passing Amendment B only prolongs real, needed changed: going to voters to end TABOR and other deleterious tax problems chiseled into the state Constitution.
Removing the Gallagher Amendment and leaving TABOR and Amendment 23 intact would be a bad idea under normal circumstances. Given so much being unknown about how the pandemic crisis will affect personal, business and state finances in the short term and future, and how long those impacts will last, possibly years, meddling with just part of the Colorado tax quagmire becomes especially dangerous.
Voters should turn back this well-intentioned but poorly considered change to the state Constitution. Vote no on Amendment B.
