A week into voting, proponents for Amendment B reminded voters of why it's important to repeal the Gallagher Amendment.
The constitutional equation on the state's income from residential and business property taxes will hurt the economic recovery and cripple budgets for first responders and schools, they said.
“I want to stress to voters across Colorado: How we emerge from the pandemic and the recession will depend on how we vote on Amendment B,” Gov. Jared Polis said in a statement Saturday. “If Gallagher isn’t repealed, Coloradans and the local businesses that have taken the brunt of the impact this year will experience nearly $300 million in automatic property tax increases next year. The Gallagher Amendment is an unfair and outdated formula that will make it harder for Colorado to bounce back. Our small businesses can’t afford this tax increase now.”
He was joined Saturday by Kent Thiry, the retired CEO of DaVita Inc. and co-chair of the repeal campaign, Colorado Coming Together, as well as Lorena Cantarovici, the 2017 Colorado Small Business of the Year winner.
"Right now, if we keep things the same, our small businesses and restaurants will go from paying a tax rate that is four times greater than the residential rate to one that is five times," Thiry said in a press release. "We can’t let that happen. That violates our basic Colorado value of fairness.”
Amendment B would freeze the residential assessment rate at its current 7.15%, though the rate was expected to decrease the next two years. At the same time, small businesses and commercial properties would be spared from offsetting increases.
A coalition of Colorado business groups released a report last week that estimated the cost shift is $250 million to $270 million tax next year if the Gallagher Amendment prevails. The groups included the National Federation of Independent Business, the Boulder Chamber, the Colorado Springs Chamber & EDC and Colorado Concern.
The group opposing the repeal, Keep Property Taxes Low, said the other side is peddling myths.
Their estimate is $500 million at stake the first year.
“Removing the Gallagher Amendment will eventually create the largest tax increase in the state’s history,” Michael Fields, executive director of Colorado Rising State Action, one of the groups defending Gallagher, said in a statement. “In this volatile and challenging time, Coloradans do not need more taxes on their plate. Not only does repealing the Gallagher Amendment not help small businesses, but the legislature also has no plan for what comes next.”
As a statutory amendment, anything passed by the voters could be amended by a majority in the General Assembly, which, at the moment, is controlled by Democrats.
Keep Property Taxes Low said if the legislature really wants to help small businesses, they could do that by cutting a "cornucopia" of taxes, regulations and fees.
Legislators, however, said there's no room for cuts in a budget ravaged by the pandemic and constrained by constitutional measures such as the Gallagher Amendment and the Taxpayer's Bill of Rights.
Part of the problem hurting rural communities is that Gallagher sets a statewide equation. That caps revenue too low in areas that don't have high property values to tax, forcing politicians to try to pass more local taxes to offset basic needs.
Opponents to Amendment B said there's also nothing stopping the legislature from setting regional equations, instead of "taking a hammer" to the state constitution.