Amendment B – Strongly Support

Amendment B – Real Property Tax Assessment Rates

(Partial Gallagher Repeal) – Senate Concurrent Resolution SCR20-001 (Constitutional Change)**http://leg.colorado.gov/bills/scr20-001

POSITION: STRONGLY SUPPORT

Rationale:

This measure preserves local funding for our public schools and other local districts. School districts rely on local funding first before receiving the state’s share. What is not covered by the local level is backfilled by the state. The state’s funding already is not adequately fulfilling that need. Further reduction at the local level would be devastating to our schools.

If the Gallagher Repeal is not successful, both Jeffco Public Schools and Jefferson County will see a significant negative impact.

Jeffco schools currently estimates a loss of $31.0M

Jefferson County will see a $29M decrease in revenue.

Here’s how your property taxes are distributed in Jeffco: https://www.jeffco.us/3851/Property-Taxes-101

  • 48% fund local school districts
  • 25% funding for the County
  • 25% funds special districts such as fire or water
  • 5% funding for cities and urban renewal

Ballot Language: “Without increasing property tax rates, to help preserve funding for local districts that provide fire protection, police, ambulance, hospital, kindergarten through twelfth grade education and other services, and to avoid automatic mill levy increases, shall there be an amendment to the Colorado Constitution to repeal the requirement that the general assembly periodically change the residential assessment rate in order to maintain the statewide proportion of residential property as compared to all other taxable property valued for property tax purposes and repeal the nonresidential property tax assessment rate of twenty-nine percent?”

Fiscal Note: http://leg.colorado.gov/sites/default/files/documents/2020A/bills/fn/2020a_scr001_00.pdf

The legislature also passed a companion bill, Senate Bill 20-223 which would take effect if voters approve the constitutional amendment. Senate Bill 223 would prohibit the legislature from changing assessment rates for property, thereby freezing the current rates of 7.15% for residential property and 29% for non-residential property in state statute. SB223 would allow the legislature to adjust the assessment rate in state statute. Under the Gallagher Amendment, property tax assessment rates were expected to continue to decrease. Therefore, repealing the Gallagher Amendment and freezing property tax rates at current levels was expected to result in higher residential assessment rates than under the Gallagher Amendment.

https://ballotpedia.org/Colorado_Gallagher_Amendment_Repeal_and_Property_Tax_Assessment_Rates_Measure_(2020)

SB20-223: http://leg.colorado.gov/sites/default/files/documents/2020A/bills/fn/2020a_sb223_f1.pdf

Additional background info: State Property Tax Administrator JoAnn Groff presented to the Joint Budget Committee (JBC) as a brief addendum to the May revenue forecast. Groff calculated that the expected drop in the Residential Assessment Rate (RAR) will mean a $246 million drop in district Total Program Funding revenues – which the state will have to backfill in 2021-22 – a $490 million drop in all district revenues,…and a $203 million drop in revenues for counties.

“The impact to school districts,” is that the residential assessment rate likely will have to drop next year from 7.15% to 5.88% (meaning a drop in local school district funding). When the state does not have the revenue to backfill K-12, the Budget Stabilization Factor increases (the B.S. Factor already exceeds $1.1 Billion).