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Gallagher and TABOR are BOTH a problem
I live in Arapahoe County. My takeaway is that the real problem with Gallagher is not really Gallagher but Tabor.
Seems like the proposed repeal of Gallagher came about because the legislators couldn’t agree on a truly comprehensive fix to the problem of taxation.
Seems that they could have just asked to have the current Gallagher Amendment amended to build in more flexibility in the formula and limit the maximums that residential and non-residential could represent.
One final point, based on your discussion, it appears that oil and gas is once again going to receive a subsidizing gift if Gallagher is repealed, which given climate change, pollution, etc. I’m not sure is good public policy.
In principle, I don’t believe the Constitution is the appropriate place for these policy matters. The Constitution should be reserved for establishing the structures of government and establishing and protecting citizens’ rights.
Thanks for your thoughtful feedback, Miles. Gallagher is a rather complex fiscal formula in our constitution, and - as you note - it's made even more complex by its interaction with TABOR. These two constitutional fiscal policies:
1) erode the residential property tax base which funds loc all public services, and
2) increasingly shifts the property tax burden from homeowners to business (1:5 tax bill ratio next year, on the same value of property).
You are partly correct that TABOR is the problem insofar as concerns Point #1, above. As you know, because of TABOR, the Residential can't go UP when NON-residential values grow faster than residential values, as Gallagher intended, therefore the residential rate has only gone DOWN which continues to erode local tax bases.
But even without TABOR, Gallagher is still problematic insofar as concerns Point #2, because as long as the value of Residential property grows faster than non-residential property, Gallagher will continue to shift the tax burden to business owners.
Personally, I couldn't agree with you more that fiscal policy SHOULDN'T be in the constitution because STATIC fiscal formulas - no matter how well-intended and well-thought - can't account for evolving changes in our DYNAMIC real world.
Regarding your statement that the legislature's proposal to repeal Gallagher was "because the legislators couldn't agree on a truly comprehensive fix to the problem of taxation", I think the solution is more challenging than that. The comprehensive problem with our tax structure is the result of three fiscal CONSTITUTIONAL amendments over 38 years, coupled with numerous other STATUTORY amendments that the legislature has subsequently adopted (e.g. our very inequitable School Finance formula) in reaction to those constitutional amendments to try and keep the state running with those fiscal constraints. Given the additional constitutional limitation that all ballot measures (which are required to fix anything in the constitution) may only address a "single subject", I think it's simply not possible to "fix" this tangled problem with only one ballot proposal. It took us 38 years and multiple statutory policies to create this problem; it's therefore likely that it will take multiple steps over time to unwind it. I think the legislature's current proposal to repeal Gallagher was the most logical place to START that "fix". Time will tell if the voters are even willing to take this first step, much less embrace what I believe are the necessary additional fixes going forward.
Miles.. your comments are very thoughtful and Reeves response is very accurate. I'd add a couple thoughts: I don't know if Gallagher can be "fixed." The legislature and the interim committee both looked at potential fixes and they seemed to produce other disparities. For example, it is difficult, if not impossible to design a regional approach partly because we have over 3000 special districts, frequently covering many counties; it gets really challenging if you divide up districts. And, it does not seem that Steamboat and Craig....only 40 miles apart...should be in the same region. Or Aspen and Rifle? Really challenging.
There was discussion about limit the maximums, or floors that the two assessment rates would have to stay within. Ultimately, there were two problems. This would have required an "amendment" rather than a "repeal" which would require 55% voter approval, rather than 50% and most political folks felt that might be an insurmountable obstacle. It might also have trouble with the crazy "single subject" rule that we have in Colorado.
I understand the comment about the oil and gas industry. Their assessment rate would remain frozen at 29% and they would not get a lower tax burden. It is fair to say that their property taxes would then fluctuate only related to the value of the minerals.
I am convinced that removing Gallagher from the Constitution is the best alternative and the right thing for Colorado.
i appreciate your thoughtful comments.