With the passage of Amendment B, Colorado voters have repealed the Gallagher Amendment. The repeal will keep residential property tax rates from dropping. This will save local governments and the state from taking huge financial hits as a result of the coronavirus-related recession.
The Gallagher Amendment tied residential property tax rates to commercial property tax rates, requiring that homeowners pay no more than 45% of total property taxes. Commercial property owners were always taxed at 29% of their property’s value. The residential tax rate fluctuated to maintain the 45/55 split.
As home values have gone up, the residential rate has been cut to keep homeowners’ share of taxes below the 45% threshold. Commercial properties, meanwhile, have picked up more of the tax burden.
Despite being a constitutional amendment, the measure repealing Gallagher only needed a majority of the vote to pass because it doesn’t add any new language. Figuring out changes to the formula will be the next step.