Gallagher Amendment Keeps Property Taxes Affordable For Many Homeowners

By Eileen Doherty, MS ~

DENVER, CO. – Policy analysts have been reviewing the impact of the Gallagher Amendment on libraries, fire districts and schools at the local level.

In the early 1980s, many Coloradoans, especially older adults had difficulty paying their property taxes. State legislators came together as a bi-partisan group and proposed the Gallagher Amendment to the voters, named after former senator Dennis Gallagher (D-Denver) who was one of the prime sponsors. Led by former Bev Bledsoe, R-Aroya, Speaker of the House of Representatives, the Amendment passed in 1982 limiting the amount of residential real estate taxes in the state’s pool of taxes.

Property taxes are collected by counties to pay for schools, fire protection, recreation, water and sewer infrastructure, libraries, and road maintenance.

A complex formula is used to determine how an individual homeowner’s property taxes are calculated which includes the base property value, the assessed property value and the mill levy. Local governments raise money through mill levies for general operations. Voters may approve additional mill levies for specific purposes such as a “new water or sewer system” or “capital improvements on schools”.

The residential and commercial assessment rates for property tax rates are set based on the Gallagher Amendment. In recent years, although the amount of property taxes paid has increased due to increases in assessed value, the residential assessment rate has been decreasing, often resulting in less money for local governments to provide county services.

A bill will be debated in the next legislative session to ask voters in the Fall of 2019 to change the Gallagher Amendment and give the state legislature authority to adjust rates for homeowners on property taxes for local services.

More debate is needed on this issue. An increase in the residential rate would result in higher property taxes on homes, presumably making more funding available for local services, however, Colorado’s Tabor Amendment and other constitutional amendments also complicate funding of local services.

Policy makers have also been studying changes in the Senior Property Tax Homestead Exemption which provides tax relief on the first $200,000 of value to home owners who have owned their homes for ten years or more.

If one or both of these initiatives are passed, many home owners would see increases in their property taxes. For more information, contact your elected officials or call 303-333-3482.

Eileen Doherty

Eileen Doherty

Eileen Doherty, MS is the Executive Director of the Colorado Gerontological Society. Her areas of expertise include management and administration of nonprofit organizations, education and training on issues related to older adults, advocacy and policy development on senior issues, and clinical practice in working with seniors and families to manage their lives in the later years. She has been the Director of the Society since 1982. She teaches Nonprofit Management for Fort Hays State University.