BY FREDA MIKLINGOVERNMENTAL REPORTER
Reeves Brown, executive director of Building a Better Colorado (BBCO) came to the monthly meeting of the Denver South Economic Development Partnership at the Lone Tree Arts Center on October 3 to report the findings from 37 meetings of community leaders held across the state in 2019, including one in Greenwood Village that we reported on here on July 17.
BBCO is a nonpartisan group that has been going around the state since 2015 to engage politically-balanced groups of community leaders in a constructive conversation to gauge their views on important issues that have been identified. They ask questions and gather answers. BBCO does not advocate for any specific solutions.
The three state fiscal policies BBCO asked participants about in 2019 were the 1982 Gallagher Amendment that froze the ratio of property value in our state to 45 percent for residential and 55 percent for non-residential, the 1992 Taxpayer Bill of Rights (TABOR) that “limits revenues available to state and local governments and requires voter approval to raise taxes,” and Amendment 23 of 2000 that requires the state to fund K-12 education at a minimum level.
Reeves explained that each of these policies that impacts Colorado’s quality of life are now “embedded into our state constitution and therefore out of the control of our state legislature.”
The Gallagher Amendment came about when residential property values were consistently growing, resulting in rising property tax bills. It works by forcing down the assessed value of residential property to maintain the 45 percent / 55 percent ratio, even though “residential property currently makes up 80 percent of total property values in Colorado.” An unintended consequence is that the residential property tax base is eroding, jeopardizing funding for essential local services like schools and fire protection. As an example, Reeves demonstrated that a $300,000 home in 1981 generated $5,400 in annual property tax, while a $300,000 home in 2018 generated $1,296 in property tax. “The forced decline in the residential assessment rate disproportionately and adversely impacts the poorest communities with the lowest rates of growth in residential property values,” he explained.
Another unintended consequence of the application of Gallagher is the shift in responsibility for funding K-12 education. In 1989, local government paid 57 percent of the cost of K-12 and the state paid 43 percent. In 2015 that ratio changed to 34 percent local and 66 percent state.
TABOR has kept taxes low for Coloradans but it has limited the state’s ability to keep up with the growth of costs of state programs needed by our population. It is especially evident in higher education, which was 68 percent state-funded and 32 percent resident tuition-funded in 2000-2001. In 2017-2018, the ratio had reversed to 65 percent resident tuition-funded and 35 percent state-funded.
State spending on transportation infrastructure has decreased from $125 per
person in 1991 to $69 per person in 2018, while the population has increased 64 percent. Most believe it is because TABOR requires a statewide vote to increase the gas tax. No elected official has proposed doing so since TABOR passed.
The collective opinion of the community leaders in 37 locations around the state that Reeves polled was that TABOR should not be repealed. However, 87 percent of participants said that something needed to be done about the effect of the overlapping requirements of TABOR and Gallagher, with 83 percent opting for removing the revenue cap included with TABOR, similar to what is presently proposed by statewide Proposition CC. Reeves made it very clear that BBCO’s proposal came before the state legislature proposed and passed Proposition CC. 59 percent of participants supported uncoupling Gallagher and TABOR to allow taxing authorities to automatically increase/decrease their mill levies to sustain a constant revenue stream in response to increases/decreases in the residential assessment rate.
For additional information about the results of their study, go to https://building
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