PROPERTY TAXES EXPLAINED

by Douglas Bruce

In 1978, Proposition 13 cut California’s property taxes 65%; it won 64% voter
approval. Colorado politicians feared a tax revolt here. In 1982, Senator Dennis
Gallagher (D-Denver) persuaded 551,334 CO voters to “fix” property taxes.
“Gallagher” had zero net tax revenue relief. A demagogic property tax shift, it froze
residential property tax at 45% of total property taxes. A tiny fraction of voters with
non-residential property (business and large acreage--heavily Republican) pay 55%.
Free markets no longer set taxable property values. As values or tax rates rose, non-
residential property owners paid higher taxes; homeowner increases were less. How
could such “soak the rich” price fixing exist?
Despite the Constitution’s promise of “equal protection of the law,” tax rates are not
equal. Court liberals wrongly say discrimination in tax law is OK. If a law said
“Black men pay double,” we would all moan, but “Businessmen pay quintuple” is
called progressive public policy. “Gallagher” intended business pay tax on 29% of
value, homes pay on 21%. To keep its arbitrary 45% limit, when home prices rise
faster than business prices, the 21% residential tax ratio (rate) declines.
The business tax ratio is frozen, so if their mill levy and value both rise, they pay
two tax increases. If only 5% of voters own something besides a home, that 5%
pays 55% of total property taxes, forever. That’s grossly unfair.
Market defiance has consequences. The 21% ratio of 1982 has slid to 6.1% for 2019.
Today’s residential tax ratio is 2/7ths of what it was. Politicians did that. It did not
end the tax revolt; TABOR passed in 1992 with 812,308 votes.
Politicians now whine they aren’t getting an extra windfall from $400,000 average
Front Range prices. Why should they? Grandma’s property tax bill rises with
general inflation, not crazy new house prices soon to flatten out. When they dip,
government budgets will face limits, and trigger pleas to raise homeowner taxes.
TABOR did not cause this government greed “problem;” politicians did. They
falsely lament “unintended consequences.” TABOR simply said a tax assessment
“ratio” is also a tax “rate” which cannot rise without voter approval. Duh.
In 1982, Gallagher’s “magic ratios” of 21% and 29% meant residential owners paid
$4 in property taxes to every $5.52 paid by mostly conservative owners. After 36
years, that split is now $1 to $4.75. The residential tax ratio fell from 21% to 6.1%,
a 71% reduction that offsets tripling Front Range home prices. That’s about Prop.
13’s first-year tax relief, spread out over 26 years of TABOR protection.
Total property tax revenue still rises by inflation and new construction but, thanks
to TABOR, does not match skyrocketing values in our unhealthy housing bubble.

The state’s annual property tax report shows total property tax revenue in 1993 (after
TABOR) was $2.42 BILLION. Last year, it was $8.96 BILLION, a 270% increase.
Liberals call that a “cut” in revenue. Special districts particularly whine they need
more. Also false. Special district revenue was $287 million when TABOR passed; it is
now $1.72 BILLION, a 500% increase. Poor dears.

Legislators feel pressure to “do something about Gallagher.” Their last “taxation
solution” backfired, but they never learn.
One idea would apply the state constitution differently in urban and rural areas--more
discrimination. There’s no stopping stupidity under the Dome (pronounced “Dumb”).
The answer is simple: Repeal “Gallagher” and freeze the ratios at 5% and 25%. Give
long-suffering businesses relief from their 29% taxable value plus mill levy increases
from 1982 to 1992 (before TABOR) to subsidize residential tax relief.
Making the residential ratio equal would QUINTUPLE homeowner bills, causing a
REAL tax revolt. Politicians should accept reality; they screwed up. TABOR turned
political bad faith into property owner help. Its decades of relief will never be undone.
Stop their stupid, unAmerican game and atone to their political victims with a 13%
property tax cut, from 29% to 25%.
Politicians say, “Trust representative government; citizen petitions will cause the
world to explode.” Gallagher shows politicians are reliably dishonest and divisive.
They are not on our side. When they propose something, your best instinct is to
think twice and vote the other way.

(692 words)
Douglas Bruce wrote the Taxpayer’s Bill of Rights (TABOR) Amendment passed in 1992. He lives in
Colorado Springs.

(719) 550-0010