Amendment 32 gives taxpayers the business
The Nov. 4 ballot will feature a question asking voters if they want to increase their residential property taxes. It might not read this directly, but that’s what will happen if Amendment 32 passes.
Amendment 32 would repeal the so-called Gallagher Amendment passed by voters in 1982 to stop drastic increases in residential property taxes.
What Gallagher did is put the property tax burden on commercial property. Twenty-one years later, the business community is crying with pain while residential property owners have enjoyed seeing their property tax rates rise much less than they would have without Gallagher Amendment mandates.
Will voters agree to raise their taxes to make Colorado more business-friendly? Don’t bet on it, at least not this year.
Summit County voters have proven they will raise taxes on themselves when they know there’s a direct benefit, such as with the school district mill levies, but Amendment 32’s effects are more global, and it’s unclear how higher tax collections would be put to use.
Locally, the question pits Vail Resorts and Intrawest against the average homeowner. It’s doubtful that would raise much sympathy.
The story gets a bit more human when you think of the locally owned business struggling to make it on Main Street. This is the kind of talk that makes the rounds of local chamber of commerce meetings.
The Gallagher Amendment forces commercial property to pay taxes that amount to 55 percent of the state’s take. Residential is at 45 percent. Additionally, commercial property is taxed at a mandated 29 percent of assessed value, while residential assessments float downward to stay at the 45-percent ratio.
Residential assessment rates are now down to 7.96 percent. That means if your house is appraised at $100,000, you pay property taxes on $7,960 of the value.
Amendment 32 would freeze the residential rate at 8 percent and the commercial rate at 29 percent while getting rid of the 55-45 ratio.
It basically stops the artificial rise in commercial taxes, save for naturally increasing property values. Residential taxes will go up faster because the assessment rate won’t keep falling while property values rise.
There are all kinds of ramifications in this change for state government and the funding of education.
As the election approaches, we’ll be alerting readers to what’s at stake, aside from higher taxes.
Opinions published in this space are formulated by members of the Summit Daily News editorial board: Michael Bennett, Jim Pokrandt, Jason Starr, Rachel Toth, Reid Williams, Aidan Leonard and Martha Lunsky.
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