Early Bird

Trustees pass resolution in support of Gallagher Amendment repeal

The resolution notes the amendment’s impact on higher-education funding and that access to education at every degree level is central to the state’s economic-development strategy.

By Lindsey Coulter

October 8, 2020

The Metropolitan State University of Denver Board of Trustees adopted and approved a resolution last month in support of repealing the Gallagher Amendment from the Colorado Constitution.

The Gallagher Amendment requires that 45% of the total share of state property taxes come from residential property taxes and 55% from nonresidential (commercial) property taxes. Since the amendment passed, it has caused a continual reduction in the Residential Property Tax Assessment Rate from 21% in 1983 to 7.15% in 2020 and thus eroded local property-tax bases across the state.

“When home values rise rapidly or residential property grows, the Gallagher Amendment triggers a cut to the residential assessment rate, a key part of the formula that determines the tax bill on a home,” said David Fine, J.D., general counsel and secretary to the board.

Gallagher’s erosion of local property-tax bases has reduced local funding for K-12 education, thus forcing the state to increase its investment as part of that local-state funding partnership, from 43% in 1989 to 66% in 2015. This increased investment has reduced funds available for other priorities such as support for the cost of higher-education tuition, which has been reduced from 68% in 2000 to 35% in 2017.

The board’s resolution states that “access to high quality academic programs at every degree level is a central component of the State of Colorado’s economic development strategy, and the state’s financial support of higher education is essential to maintaining such access.” The resolution also notes that the state’s reduction in support of higher education has shifted the tuition burden to students who are graduating with increasingly higher amounts of college debt, which inhibits their ability to contribute to the economy upon graduation.

Since the Gallagher Amendment’s passage in 1982, the decline in the residential assessment rate has decreased revenue for local communities, especially in rural Colorado. For many school districts, the Gallagher Amendment has cut local funding, requiring the state to take on more of the burden of paying for K-12 education and forcing local governments to increase mill levies.

“This has led to school-funding shortfalls, as well as cuts to other state services critical to business, like transportation and higher education,” Fine added on behalf of the trustees. “Thus, the Gallagher Amendment has hurt higher education and should be repealed.”

Learn more about Colorado Amendment B, Gallagher Amendment Repeal and Property Tax Assessment Rates Measure (2020).

Read the MSU Denver Board of Trustees’ full resolution in support of the repeal.