Colorado Tax Mandates Will Continue to Hurt Rural Areas

When home values rise, the state constitution requires cuts to residential tax rates that severely impact less-developed areas.

2 minute read

December 30, 2017, 7:00 AM PST

By Katharine Jose

Gilpin County, Colorado

RaksyBH / Shutterstock

A new report shows that, once again, a collision of two tax mandates in the Colorado state constitution will further reduce the funding available to rural districts for schools, fire departments, and other services.

Brian Eason of the The Denver Post quotes one lawmaker who, after hearing the latest forecast commented, “Thank you for this very disturbing analysis.” 

The first issue at hand is the 1982 Gallagher Amendment, which mandates that residential property taxes can comprise only 45 percent of statewide property tax revenue, with commercial and industrial property making up the remaining 45 percent. (In 1982, Colorado homeowners paid significantly more in property taxes than did businesses.)

The second is the 1992 Taxpayer Bill of Rights, which requires voter approval of any increase in property taxes.

As a result of Colorado’s rapid development over the last decades, residential property values soared, and in order to maintain the ratio determined by Gallagher, tax rates on those properties have fallen. (Meanwhile, the tax rate on commercial properties has remained the same.)

The most significant problem, at the moment, is that “The Gallagher cuts have disparate effects in different parts of the state.”

Because residential property values in areas like the Front Range have soared over the last decades, those areas are still seeing an increase in revenue, but in rural areas, where property values are rising at much slower rates, revenues are way down. (The Colorado Fiscal Institute produced a very helpful video that makes sense of the whole thing.)

The already pronounced “urban-rural divide” will only be exacerbated by the next round of  statewide property tax cuts in 2019.

Thursday, December 21, 2017 in The Denver Post

View of Interstate 205 bridge over Columbia River with Mt. Hood in background.

The Unceremonious Death of a Freeway Expansion Project

The end of an Oregon freeway project didn't get much fanfare, but the victory is worth celebrating.

September 19, 2023 - Streetsblog USA

A derelict sign on a barbed wire fence reads “Golf Course, Private, No Admittance.”

Converting Golf Courses to Housing Never as Easy as the Market Would Like

Thousands of golf courses have closed in recent years, but the obvious redevelopment opportunity represented by many defunct courses isn’t always easy to realize.

September 19, 2023 - The Business Journals

Close-up of red Houston BCycle bike share bikes parked at a station

Houston To End Bike Share Program

Lacking the funding it needs to continue, Houston’s BCycle bike share system will end operations in the coming months.

September 18, 2023 - Houston Chronicle

Close-up of Unalakleet, Alaska on map.

FTA Announces Tribal Transit Program Grants

The agency awarded close to $10 million to 22 communities around the country for transit improvements.

3 hours ago - Mass Transit

View from inside glass top floor of Amtrak passenger train with Rocky Mountains scenery outside.

Making Colorado’s Front Range Rail a Reality

Local leaders are scrambling to bring together the funding and political support to create new intercity rail service in the fast-growing region.

4 hours ago - Governing

Students walking on sunny walkway on college campus.

How College Campuses Fulfill an Urbanist Dream

Most college campuses in the United States are inherently walkable, mixing various uses with diverse housing options and transit networks.

5 hours ago - The Daily

Urban Design for Planners 1: Software Tools

This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.

Planning for Universal Design

Learn the tools for implementing Universal Design in planning regulations.