Opinion | Tony Jones: Unintended property tax consequences have arrived after 2020’s Gallagher Amendment repeal | SummitDaily.com

Opinion | Tony Jones: Unintended property tax consequences have arrived after 2020’s Gallagher Amendment repeal

Thinking back to the 2020 elections, I remember distinctively feeling two emotions regarding the outcome. First, profound relief that we’d have a new president. Secondly, a feeling of incredulity that Colorado voters had repealed the Gallagher Amendment. The anti-Gallagher measure, Amendment B, repealed the constitutional amendment that kept residential property taxes in Colorado low and put most of the property tax onus on businesses. In talking with folks from other states, I knew that homeowners in Colorado were fortunate to have Gallagher on their side. Property taxes in other states can be easily double or triple what we pay in Colorado for a similar property.

Looking back, it’s easy to understand why some voters may have thought Amendment B a good idea. Recall that we were deep in the pandemic, locked down in our homes, and the economy was struggling with businesses closing and millions of people having lost employment. I’ll be the first to excuse policy mistakes due to decisions made under duress, and I’m sure that there was some of this at play when the legislative and business backers of Amendment B put it up for a vote. But I was sure then, and remain so today, that this was also a calculated move made to take advantage of the COVID crisis and folks’ fear over the craziness we were living through to push a property tax increase that Colorado’s notoriously tax-adverse voters wouldn’t typically agree to.

Well, the Amendment B chickens have come home to roost in the form of impending tax increases for residential properties. And, ironically, many Colorado property owners, some of whom presumably were in the 58% who voted for Amendment B, are voicing their outrage over the increase. And, reactively, Colorado lawmakers are planning to add another twist to the already tortured gordian knot that is our state’s finances. That new twist is SB23-303, which will be legislatively referred to the 2023 ballot. This complex bill, among other things, includes a one-time cut to property tax assessments and reduces the rate at which properties are to be taxed. Oh, and it’s tied to another bill that would increase renters’ TABOR refunds, since their refund dollars are helping to fund the property tax cuts for homeowners. Well, (sarcasm alert!) that certainly seems straightforward, and I’m sure no unintended consequences could come from it.

There are other alternatives for addressing the property tax increase issue being considered. Advance Colorado is promoting Initiative 21, which, if it makes to the ballot, would cap property tax increases at 3% annually and bank up to $100 million in TABOR-eligible surpluses to support fire districts. Additionally, the Bell Policy Center is getting into the ballot measure game with a set of policies that would also cap property tax increases and backfill spending for schools and water projects with TABOR funds. Both initiatives have a steep hill to climb to get from policy ideas to ballot measures, but it’s starting to look like there could be competing property tax reduction measures on the ballot along with the legal uncertainty that goes along with that.

TABOR continues to be a complicating factor in Colorado’s state budgeting process. While having voters approve tax increases sounds good on paper, in reality it’s led to underfunding of transportation, schools and other vital services in Colorado, because (surprise!), folks don’t want higher taxes, and if you give them a choice they’ll vote against them. As a former state worker, the part that I especially don’t like about TABOR is the mechanism that ratchets down agency budgets in low revenue years and hampers the ability for those agency budgets to recover even when tax revenues increase.

This ratchet effect also exasperated the effects of the Gallagher Amendment on Colorado’s business economy. But TABOR is the law and it’s been, shall we say, interesting, to see how the governor’s office and legislature, pursuing an “if you can’t beat ’em join ’em” strategy, have cottoned onto the TABOR piggy bank recently. All three of these property tax measures use TABOR refund dollars to backfill the loss in revenue to public services that reducing property taxes will cause. Of course, none of these bills would be needed were it not for TABOR and its effect on our state government’s finances. Personally, my preference would be that rather than addressing the symptoms of the illness that TABOR is for Colorado, cure the disease. This means modifying or eliminating it. This also puts the responsibility for trustworthy and accountable governance back in the hands of elected officials. Those same elected officials that you and I vote into office and can vote out of office if they’re not living up to the ideals of responsible governance and taxation.

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