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Repealing Gallagher could help government budget shortfalls at cost to homeowners

For Colorado’s local governments to continue providing similar levels of service, the Gallagher Amendment will need to be repealed, the Garfield County assessor said at Tuesday’s Garfield County Board of County Commissioners meeting. 

“The complicated nature of trying to fix this problem … is that somewhere, somebody is going to have to lose,” County Assessor Jim Yellico said. “And, the people that would lose are your voters.” 

Added to Colorado’s Constitution in 1982, the Gallagher Amendment was created to ensure home owners wouldn’t be stuck with the lion’s share of funding government. To accomplish this, the amendment mandated that local and state governments couldn’t collect more than 45% of their property tax revenues from residential valuations.

Currently, that 45% cap means homeowners only pay taxes on about 7% of their home values, but assessors across the state predicted that could drop to as low as 5% in the next couple years. 

On the opposite side, non-residential properties, whose values have also increased, continue to pay taxes on 29% of their property values. 

A bi-partisan effort of both state and local officials is scheduled to add questions to the November ballot that would effectively remove the Gallagher Amendment from the state’s constitution, but there’s still questions about the long-term ramifications.

Associated Governments of Northwest Colorado Executive Director Bonnie Petersen presented the commissioners with some of the pros and cons of the repeal. 

“The formula set up by Gallagher is impacted by growth on the front range, which we all know is out of control,” Petersen said. “As that residential sector grows and those valuations go up, every time we assess property values, residential (tax) rates go down in rural communities.”

Without a repeal, residential property tax rates could continue to go down, providing less money for governments to conduct their day-to-day operations.

“The state and all of our communities are facing budget shortfalls,” Petersen said. “That has all sorts of domino effects in terms of local governments, and there’s significant concern.” 

Repealing Gallagher could cap the rate at about 7% because of language in the TABOR amendment, which could prevent an increase in the assessment rate without the people’s vote, she said.

But, some aren’t convinced TABOR is airtight.

“There is concern the word assessment is not in TABOR,” Petersen said. “So questions arose as to whether Legislature could change the assessment.”

Additionally, if voter’s repeal Gallagher, they would be voting to raise their own taxes. 

Based on predictions by Dennis Gallagher, the Gallagher Amendment’s author, Petersen said if repealed, property taxes could cost the state’s residential land owners an additional $203 million in the first year of the repeal.

Yellico said for commercial property owners to pay less and governments to continue providing the current level of services, residential property taxes would need to increase.

“That’s on the voters,” he said. “And voters don’t tend to raise their own taxes.”

County Commissioner Tom Jankovsky said he did not support repealing Gallagher. 

“I believe in limited government,” Jankovsky said. “And we’ve got to deal with what’s been dealt to us.”


How removing the Gallagher Amendment could work in Glenwood Springs

Voters could decide in November whether longstanding statewide restrictions on property tax ratios should be removed.

As part of a bipartisan effort, both state and local officials are planning to add questions to the November ballot that would effectively remove the Gallagher Amendment from Colorado’s constitution.

Added in 1982, the amendment set out to ensure homeowner’s wouldn’t bear the brunt of funding government. But as the housing market boomed and home values skyrocketed, businesses were left to pick up the tab, said Karl Hanlon, Glenwood Springs city attorney.

Prior to the Gallagher amendment, when residential properties accounted for about 45 percent of the state’s total taxable property values, houses were taxed at about 30 percent of their assessed value.

The amendment mandated that local and state governments couldn’t collect more than 45 percent of their property tax revenues from residential valuations, according to information provided by Building a Better Colorado.

As residential properties’ taxable values increased, now accounting for about 80 percent of the state’s total taxable property values, the amount a local government could tax a residential property decreased to ensure the 45 percent ratio was maintained, dubbed a ratcheting effect, Hanlon said. 

To determine how to tax a property, a local government multiplies the property’s base market value by an assessment rate dictated by the state constitution and modified by the Gallagher Amendment.

Since 1982, residential property tax assessment rates have shrunk from around 30 percent to about 7 percent in 2020. Meanwhile, all non-residential properties are taxed at 29 percent of assessed value as they have been since the Gallagher Amendment was approved.

Reduction of services

Property taxes are collected locally and spent locally, Building a Better Colorado reported. Colorado has not imposed a property level tax since 1964.

The funds primarily go to school districts, but also fund special districts — such as fire and library districts — cities, counties and junior colleges.

Analysts predict the ratcheting effect in 2021 could drop residential property tax rates down to about 6 percent, which would result in the city of Glenwood Springs losing about $131,000 in revenue from property tax mills and could significantly impact the city’s fire districts, Mayor Jonathan Godes said.

“We look at this as a potential cut of $131,000, which is essentially two less people available to fight fires,” Godes said.

The revenue problem is compounded by decreasing sales tax revenue as a result of the pandemic, Hanlon said. School districts rely heavily on property tax revenues, but the city’s fire districts can pull money from the general fund, which is fed — in part — by sales taxes. 

With both sources of revenue declining, Godes said maintaining the city’s current level of services would be challenging.

In addition to some state legislators’ initiative to “de-Gallagherize” Colorado’s constitution, the Glenwood Springs City Council approved a motion, July 2, to craft language for additional questions on the ballot that would further de-Gallagherize the city’s revenue in the future. 

Although the city’s ballot questions have not been released yet, Hanlon explained the intention of the questions will be to ensure the tax rate for assessed residential value does not drop below its current rate of about 7 percent.

Hanlon said property tax percentages would not increase as a result of the city’s ballot question.

Godes added, “The goal is to not have our most basic services — health and safety — see a reduction in revenue.” 

The city’s ballot question is separate from the state’s question, though both ask the voters to commit to similar changes. 

If the Legislature’s ballot question failed, Hanlon said the city’s ballot question would insulate the city’s revenues from further ratchet effects. But the question is still important if voters approve Legislatures’ de-Gallagher effort, he added.

“It allows us to maintain revenues where they’re at, which under the proposed repeal of Gallagher … there could, frankly, be a reduction (of residential property tax percentages),” Hanlon said. “Keeping in mind that with the Tax Payer’s Bill of Rights Amendment (TABOR) in place, the repeal of Gallagher does not mean a local jurisdiction could increase the taxes on your property without going to an election to make that happen.”


While most of the City Council approved the motion for city staff to craft de-Gallagher questions for the November ballot, Councilor Tony Hershey voted against the motion.

“I think it’s duplicative to have it on a local ballot,” Hershey said. “Why not see what happens on the state ballot first.”  

In general, Hershey said he does not support either the state or the city’s movement to de-Gallagherize. The potential hike in residential property taxes — though any increase would need voter approval as per the TABOR amendment — is too much, he explained. 

“The TABOR amendment is next,” Hershey speculated. “The government will spend as much money you give them.”

Instead of additional questions to remove or hamper the Gallagher Amendment, Hershey said he’d rather see school and fire districts directly ask voters for more money by way of additional property mill increases, which would apply to businesses as well further increasing the tax burden on commercial properties while marginally increasing residential taxes.

“I’m opposed to (removing) Gallagher, because I think the government spends too much money and not in the right way,” Hershey.


Gallagher led to $35 billion in residential property tax cuts. Now Colorado lawmakers want voters to repeal it.

In a desperate attempt to stave off further budget calamity, state lawmakers are fast-tracking a landmark ballot measure that would ask voters to repeal the Gallagher Amendment — the property tax-limiting constitutional provision that has provided an estimated $35 billion in tax relief to Colorado homeowners since 1983.

The bipartisan proposal — which requires a legislative supermajority to pass — represents the nuclear option for tackling Gallagher, a sign that the growing economic crisis is upending long-held assumptions about what is politically feasible in tax-averse Colorado.

It is also an indication of just how desperate state lawmakers have become as they face an economic abyss unlike any other in their lifetimes.

Last week, state budget writers put the finishing touches on a proposed spending plan that cuts $3 billion this year and next. And earlier in May, lawmakers learned that Gallagher could trigger an 18% residential property tax cut, which would mean an additional $491 million in cuts to schools and $204 million in cuts to county governments starting in July 2021.

Read the full story via The Colorado Sun.

The Colorado Sun is a reader-supported news organization dedicated to covering the people, places and policies that matter in Colorado. Read more, sign up for free newsletters and subscribe at coloradosun.com.

Glenwood voters approve selling MOC property during Tuesday special election

Glenwood voters overwhelmingly approved authorizing the city to sell its municipal operations center in Tuesday’s special election.

Ballot Issue A, the only question on the ballot, asked voters to authorize the city to sell or otherwise convey its interest in the 19-acre property at 2307 Wulfsohn Road and the access road leading to it.

According to unofficial election results, which came in around 8 p.m., 1,019 residents supported Ballot Issue A whereas 454 did not.

The municipal operations center was constructed in 2002 and has required significant foundation and structural repairs over the years.

In 2014, the city spent nearly $2.5 million trying to stabilize the roughly 35,000-square-foot facility, but to little avail.

Citing employee safety, the city decided to move its Electric, Fleet, Parks, Streets and Special Works Activities Team departments out of the building last year.

Instead of pouring additional resources into the structurally ailing facility, the city wanted to sell the property, but needed voter approval to do so.

In the past, RFTA has expressed interest in purchasing the 19-acre MOC property and access road leading to it.

Last year, RFTA provided the city with a non-binding letter of interest that included $1.2 million for the property and $60,000 for the access road leading to it.

The city mailed out approximately 5,600 ballots to Glenwood Springs residents on March 23 for the special election.

In November, approximately 2,074 Glenwood voters participated in the regular election, which authorized a new tobacco tax.

Additionally, last April roughly 2,195 votes were cast when residents ultimately said no to a new street tax.

As a result of the COVID-19 crisis, the city strongly recommended that voters mail their ballots in to avoid in-person contact.

Residents could still drop off ballots inside the county courthouse or in the gray box outside of the courthouse along Eighth Street.

City hall was also open from 7 a.m. to 7 p.m. Tuesday for residents to drop off ballots or get a replacement one.

“We got quite a lot dropped off, but we also got quite a lot mailed in,” Catherine Fletcher, Glenwood Springs city clerk, said. “It’s probably about 50/50.”

Because city hall has been shut down, a few city employees from various departments assisted in the ballot-counting process.

Ballot counters wore face coverings and gloves as they stacked envelopes, verified signatures and ran ballots through the counting machine in council chambers.

“Wearing a mask, wearing it for a whole day, all day, it’s a lot,” Fletcher said. “Nobody realizes until you have to do that.”

Kacee Stewart, who generally works in the police department as a records clerk, had been helping process ballots since last week.

“It’s different,” Stewart said. “It feels nice to be helping out with something like this.”

Executive Administrative Assistant Sara Weigel was also helping count ballots in addition to her usual, day-to-day responsibilities.

“I think it’s really important that we still have the election and have some sort of normalcy,” Weigel said. “And, make sure that everybody is able to vote and that right isn’t taken away.”


Glenwood Springs Special Election still on for April 14

Despite the COVID-19 crisis, the city’s special election will occur as planned on April 14.

According to City Clerk Catherine Fletcher, the city mailed out approximately 5,600 ballots on March 23 and received 1,100 back as of Thursday morning.

Due to safety concerns, the city is asking residents to mail ballots in. 

However, residents can drop off ballots in-person at the gray box in front of the Garfield County Courthouse on Eighth Street if necessary.

Fletcher will also make a drop box available at city hall on Election Day.

On April 14, city hall will open from 7 a.m. to 7 p.m., only to residents needing to drop off ballots or receive a replacement one.

Fletcher said only one resident will be allowed into council chambers at a time and individuals must comply with social-distancing requirements and wear face coverings. 

Ballot counters will also adhere to strict social-distancing requirements, wear gloves and face coverings as well as wipe down surfaces frequently Fletcher said.

Only one question appeared on April’s special election ballot.

If approved by voters, Ballot Question A would authorize the city to sell or otherwise convey its interest in the 19-acre municipal operations property and access road along Wulfsohn Road.

The city-owned municipal operations center was constructed in 2002 and previously housed the electric, fleet, parks, streets and special works activities team departments. 

All five departments have since relocated as a result of structural safety concerns. 

Over the years the city has spent a significant amount of money, including nearly $2.5 million in foundational and structural repairs in 2014, to try and stabilize the building. 

However, instead of pouring more taxpayer money into fixing the facility, the city hopes to sell it but needs voter approval to do so first. 

In September, RFTA provided the city with a non-binding letter of interest that proposed $1.2 million for the property and an additional $60,000 for the access road leading to it. 

Fletcher must receive ballots no later than 7 p.m. April 14.


Carbondale votes for tobacco tax

Carbondale voters overwhelmingly approved a cigarette and tobacco tax within town limits in Tuesday’s municipal election.

Also on the ballot Tuesday were three town board of trustee seats, but the three incumbents ran unopposed.

Lani Kitching (851 votes), Ben Bohmfalk (890 votes), and Marty Silverstein (1,046 votes) were each reelected for another term.

The tobacco tax, similar to other measures other taxes municipalities have approved in the past few years, will dramatically increase the cost of cigarettes and nicotine products.

Most of the towns and municipalities in the region approved a $3.20 tax per pack of cigarettes that rises 10 cents a year until it reaches $4.

But Carbondale asked voters to approve the full $4 tax per pack, along with a 40% tax on all other products containing nicotine, including cigars and e-cigarettes.

Smoking and nicotine cessation products like gums and patches are not affected.

The tax question won with 924 votes in favor, and 381 opposed. The tax takes effect July 1.

Under the state’s TABOR Amendment, taxing authorities must tell voters how much they expect to raise from the tax, and Carbondale put the upper limit at $700,000 annually. Town Manager Jay Harrington said that number is much higher than the town actually expects to make from the tax.

Glenwood voters being asked to authorize Municipal Operations Center sale in April election

The city is aiming to get the failing Municipal Operations Center off its hands through a ballot in front of the voters right now.

Constructed in 2002, the Municipal Operations Center previously housed the city’s electric, fleet, parks, streets and special works activities team departments.

Over the years, however, the less than 20-year-old facility has deteriorated quickly. So much, in fact, that all five departments have since relocated due to employee safety concerns.

“Numerous attempts and millions of dollars have been spent to try to save that building,” Mayor Jonathan Godes said. “But at some point, you are throwing good money after bad.”

If approved by voters, Ballot Question A would authorize the city to sell or otherwise convey its interest in the 19-acre Municipal Operations Center property and access road along Wulfsohn Road.

Ballots were mailed out this week for the city’s special election set to be held on April 14.

In 2011, city employees noticed the Municipal Operations Center was under settlement distress and engineers were brought in to determine mitigation measures.

Significant and costly grouting operations were completed in 2014, but the building continued to move “even along the sections that were grouted” according to a previous city council staff report.

“It’s unsuitable and unsafe for human occupation of any kind,” Godes said.

Last year, city council unanimously approved purchasing the former McCandless Truck Center located at 2222 Devereux Road for $2 million to house the fleet, streets, and special works activities team departments.

Additionally, the Parks Department has since relocated to a facility on Soccer Field Road and the electric department to offices in West Glenwood.

Public Works Director Matthew Langhorst said the city hardly utilizes the Municipal Operations Center other than for storage.

In the past, RFTA has expressed interest in acquiring the city-owned property.

“RFTA is still interested in purchasing the (Glenwood Springs Municipal Operations Center),” RFTA CEO Dan Blankenship said Thursday. “We are developing a plan to expand our maintenance facility onto the city’s property.”

In September, RFTA provided the city with a non-binding letter of interest that included $1.2 million for the property and $60,000 for the access road leading to it.

RFTA Chief Operating Officer Kurt Ravenschlag said that upon further consideration and subject to a successful closing, RFTA has also proposed up to $200,000 for river walk trail improvements in Glenwood Springs.

However, ahead of any such transactions, voters must authorize the city to sell the property first.

City Clerk Catherine Fletcher said approximately 5,000 ballots had been mailed to Glenwood Springs residents.

Fletcher said ballots would not be accepted in person at city hall as the facility remains closed.

Residents are encouraged to mail their ballots in due to the COVID-19 pandemic.

However, if needed, residents may drop ballots off in the county’s gray box in front of the courthouse, Fletcher said.

Ballots must be received by 7 p.m. April 14.


Should Glenwood Springs have runoff elections for city council? Question could head to voters

A candidate does not need 50% of the vote to be elected to Glenwood Springs City Council.

Instead, the city’s charter states that the candidate who receives the most votes wins – no majority necessary.

But Glenwood Springs voters could be asked as part of this April’s special election whether or not those rules should change.

Specifically, should a runoff occur if a candidate does not receive over half the vote?

According to Mayor Jonathan Godes, no recent council race fueled the discussion. Instead, the topic has lingered among previous mayors and city councilors for quite some time.

“If we, as city council, want to put this on the ballot in April now is the time to make that decision,” Godes said.

While city council decides whether or not to put the question on the ballot, the voters would get the final say in the matter.

“It’s a charter amendment,” Godes said. “It has to go to a vote of the people.”

According to a city council staff report, a city election typically carries with it a price tag of between $12,000 to $15,000.

Additionally, in nearby municipalities like Aspen, residents elect four city councilors and a mayor, which can lead to runoffs.

Aspen residents vote for two city council candidates from the entire field.

The top two candidates then take office “provided that the candidate receives 45% plus one vote, or more, of the votes cast for the office” according to the city’s charter.

If not enough candidates receive over 45% of the vote, then a runoff ensues.

Councilor Tony Hershey, who previously served on Aspen’s City Council, said he opposed the idea of a runoff election in Glenwood Springs.

“I think the concern is if there are like 12 people running and one person wins with 20% of the vote, is that really the will of the people?” Hershey said. “We are lucky to have two or three candidates in any one race. Sometimes people run unopposed.”

In the April 2019 elections, eight candidates ran for four council seats in Glenwood Springs. Two of those races were uncontested as councilors Paula Stepp and Steve Davis ran unopposed.

In 2015, seven candidates ran for four city council seats in Glenwood Springs. In that election, councilors Todd Leahy and Michael Gamba ran unopposed for the Ward 3 and Ward 4 seats respectively.

Additionally, that election’s closest contest was that of former councilor Kathryn Trauger defeating her two opponents with over 60% of the vote.

Aspen residents, unlike Glenwood Springs voters, also directly elect their mayor.

In Glenwood Springs, a city with nearly 10,000 residents, seven city councilors decide who serves as mayor.

“I think a direct election of the mayor by voters would increase their participation in the city’s affairs,” Councilor Rick Voorhees said.

Voorhees also believed a runoff between the top two candidates in ward and at-large races, should a candidate not receive over 50% of the vote, would “produce more interest and more accountability.”

“An additional round might force the candidates to base their platforms on hard facts and research, not simply what they believe the public wants to hear,” Voorhees said.

Council, likely in the coming weeks, will decide whether or not to put the runoff question before voters this April.


Basalt Issue 3A: Setting property tax rate gains widespread support

Basalt officials were finally breathing easy Tuesday night after a year of budget uncertainty.

The town government’s request to re-establish a property tax mill levy was ahead by a comfortable 191-vote margin with a handful of votes remaining to count. As of 10:15 p.m., there were 594 votes in favor of the mill levy and 345 against. That’s a margin of 63% to 37%.

The vote on the property tax rate was required after town staff discovered in fall 2018 that the government had been violating the Colorado Taxpayers’ Bill of Rights for more than a decade by raising the property tax rate without voter approval. The council responded by approving $2.1 million in refunds for four years of overcharges and placing a question on the ballot to re-establish the tax rate.

“I think we’ve continued to forge ahead to solve the problem,” Town Manager Ryan Mahoney said Tuesday night after the voting trend was clear. “With that came earning the trust from their constituency.”

Issue 3A asked for permission to set the property tax rate at 5.957 mills, the same as last year. Without that approval, Basalt would have been forced to drop to a mill levy of 2.562 — the lowest level it has been since the Colorado Taxpayers’ Bill of Rights was approved in 1992.

The lower mill levy would have forced Basalt to slash about $700,000 from its budget for 2020 and future years.

“The reality is you can slash $700,000 from your budget and you might not feel it in year one,” Mahoney said. But the cumulative effect of the budget cuts would eventually mean infrastructure repairs wouldn’t be made as frequently, vehicles wouldn’t be replaced and special projects couldn’t be pursued, he said.

Mayor Jacque Whitsitt said she felt many voters understood the implications, despite the complexity of the issue. It was a low-key campaign, but when she went door-to-door, it seemed like voters were informed, she said.

Since the TABOR violation was discovered, the town government took steps to beef up its financial oversight. It added citizen watchdogs to its financial advisory board. It changed budget approval procedures so increase transparency of the mill levy.

“I think the town has really ramped up their game on transparency and financial reporting,” Whitsitt said.

She said the results were a personal relief as well. Whitsitt must leave office in April due to term limits. She didn’t want to leave office with the town facing a dire financial situation.

“It’s great to go out on a high note,” she said.

Mahoney said voter approval of the ballot question means the town can “stay on track” with its strategic plan, which includes everything from regular maintenance of roads and sidewalks to efforts to add affordable housing and assist with affordable daycare.

The ballot measure also gives future town council flexibility in raising and lowering the property tax rate — as long as it stays under 5.957 mills. Any increase above that level requires voter approval.

Despite the stakes, the election didn’t entice many Basalt residents to vote. As of deadline time Tuesday night, there were 939 ballots cast with a small amount remaining to be counted. There are about 2,200 registered voters, so the turnout was about 42 percent.

There were 844 votes cast in the last municipal election in April 2018.

The measure was supported by a comfortable margin in both Eagle and Pitkin counties. Basalt is divided among the two.

In the Eagle County portion of Basalt, the vote was 429 in favor and 267 against as of 10:15 p.m. The margin was 165 in favor and 78 against in the Pitkin County portion of Basalt.


Proposition DD still too close to call

After the first round of votes were tallied Tuesday, it’s still too soon to tell whether Colorado voters have passed a measure that will use taxes from sports betting to fund projects outlined in the Colorado Water Plan.

As of 8:30 p.m., unofficial results showed 49.74 percent of Colorado voters for Proposition DD and 50.26 percent against it.

In Pitkin and Eagle counties, the measure passed with 58 percent of voters in each county supporting the measure.

Voters in Garfield County rejected Proposition DD with 53 percent of voters against it.

If Proposition DD passes, the state will be authorized to collect a 10 percent tax up to $29 million (but probably closer to $15 million) a year from casino’s sports-betting proceeds. The money would go toward funding projects that align with the goals outlined in the water plan, as well as toward meeting interstate obligations such as the Colorado River Compact.

The plan, outlined in a 567-page policy document, does not prescribe or endorse specific projects, but, instead, sets Colorado’s water values, goals and measurable objectives. According to the water plan, there is an estimated funding gap of $100 million per year over 30 years, but Colorado Water Conservation Board officials have said that number is an estimate and not precise.

Some of the projects outlined in the water plan stand in opposition to one another — for example stream restoration projects with an emphasis on environmental health and building or expanding dams and reservoirs that would divert and impound more Colorado River water. Proposition DD funding could go toward any of these.

The funds would be administered by the Colorado Water Conservation Board, a statewide agency charged with managing Colorado’s water supply.

In addition to doling out money from Proposition DD in the form of water-plan grants, the revenue could also be spent to ensure compliance with interstate compacts and to pay water users for temporary and voluntary reductions in consumptive use. That could mean a demand management program — the feasibility of which the state is currently studying — in which agricultural water users would be paid to leave more water in the river.

The measure had received broad support from environmental organizations, agriculture interests, water-conservation districts and even Aspen Skiing Company.

Editor’s note: Aspen Journalism collaborates with The Aspen Times and other Swift Communications newspapers on coverage of rivers and water. For more, go to aspenjournalism.org.