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

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Cover CM Credits, Earn Certificates, Push Your Career Forward

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

July 16, 2025 - Diana Ionescu

Green vintage Chicago streetcar from the 1940s parked at the Illinois Railroad Museum in 1988.

Chicago’s Ghost Rails

Just beneath the surface of the modern city lie the remnants of its expansive early 20th-century streetcar system.

July 13, 2025 - WTTV

Blue and silver Amtrak train with vibrant green and yellow foliage in background.

Amtrak Cutting Jobs, Funding to High-Speed Rail

The agency plans to cut 10 percent of its workforce and has confirmed it will not fund new high-speed rail projects.

July 14, 2025 - Smart Cities Dive

Worker in yellow safety vest and hard hat looks up at servers in data center.

Ohio Forces Data Centers to Prepay for Power

Utilities are calling on states to hold data center operators responsible for new energy demands to prevent leaving consumers on the hook for their bills.

July 18 - Inside Climate News

Former MARTA CEO Collie Greenwood standing in front of MARTA HQ with blurred MARTA sign visible in background.

MARTA CEO Steps Down Amid Citizenship Concerns

MARTA’s board announced Thursday that its chief, who is from Canada, is resigning due to questions about his immigration status.

July 18 - WABE

Rendering of proposed protected bikeway in Santa Clara, California.

Silicon Valley ‘Bike Superhighway’ Awarded $14M State Grant

A Caltrans grant brings the 10-mile Central Bikeway project connecting Santa Clara and East San Jose closer to fruition.

July 17 - San José Spotlight