One of the most consequential policies in Colorado over the past few years has been property taxes. Prior to its repeal in 2020, the Gallagher Amendment was approved by voters in 1982 as homeowners were concerned about residential property tax rate increases. The pressure resulted in a study committee that produced a policy that divided the states residential and commercial property tax rates. This amendment mandated 45% of the state’s property taxes be collected from residential properties and the remaining 55% from commercial properties with the commercial rate capped at 29%.

One of the ballot initiatives being proposed to combat the cost increases in property taxes this year would limit property tax revenue to 4% growth above the prior year’s statewide property tax revenue. It would also require voter approval if the property tax revenue was expected to be increased by more than 4%. Sounds easy enough, right?

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What is not being discussed in this proposal is how the 4% growth cap is not going to collect nearly enough revenue to fund the constitutionally mandated programs and needs our property taxes support. A recently published fiscal note prepared by the General Assembly’s office of Legislative Council, estimated the cost of this proposal at $3 billion for 2025. Yes, you read that correctly. A 4% cap on property taxes will leave the state in a position to back-fill local governments the outstanding balance of $3 billion. It is estimated the back-fill will then increase to $3.1 billion in 2026 and increase by larger amounts in future years. Picture the chart in your head right now; the anticipated growth rate is the steep line while the allowable growth rate percentage is the flat line.

We need to cap property taxes | COUNTERPOINT

Though the proponents of this measure make the argument Colorado’s budget is $40 billion and that they should “find” the money to fill the gap, there is much to know about the state budget to understand the absurdity of that directive. First, Colorado’s General Fund is only $15.1 billion and is really the only area the legislature has discretion over. Next, Colorado has a constitutional mandate to balance the budget every year. This means our state cannot carry a deficit. Colorado voters also have passed an amendment to mandate K-12 education funding. Colorado also has a constitutional mandate to fund Senior Homestead and Veteran Property Tax Exemptions, the Old Age Pension, as well as setting aside constitutionally mandated TABOR refunds, and more. And all of this comes before funding those on Medicaid, transportation and infrastructure, public safety and a multitude of services Coloradans depend on.

This is a consequential and difficult topic with a lot of nuance and choices to be made. But we assign a catchy phrase to it and legislate to simplify the problem — and the solution. Policies that sound easy and catchy but in practice will bankrupt programs Coloradans rely on while simultaneously destroying quality of life need more than a bumper sticker solution.

Lisa LaBriola is a principal at Husch Blackwell Strategies and was a Senate Democrat staffer for close to a decade. She served as chief of staff to former Senate Minority Leader Lucia Guzman and former Senate President Leroy Garcia. Opinions expressed here are her own and do not reflect the opinions of any other organizations.