Already, within a month of this past election, conservative interests led by Colorado Rising Action, many of the same folks who sponsored the Proposition 116 income tax cut, have filed an initiative for 2022 to reduce the residential assessment rate from the now fixed 7.15 percent to 6.5 percent.
December 13, 2020
Some mistakenly think that in repealing Gallagher, taxes on residential and commercial property will suddenly equalize. Not at all. Amendment B just freezes the current imbalance in place and prevents it from growing still further out of whack.
Had Amendment B not been enacted, the residential assessment rate would have declined still further.
Of course, this will be a boon to the coffers of the state as well as local governments. In just the first year, Gallagher repeal revenues will more than make up for the $150 million or more that the state will forego as a result of the income tax reduction. As tradeoffs go, this one is revenue positive, though of course many in government would have preferred to keep the income tax where it was.
Let me offer a pair of predictions: First, set your clocks for five or six or seven years down the road. Assuming an economic recovery and another strong real estate market in the interim, residential property taxes will increase quite substantially which will create a political reaction perhaps similar to what led to the adoption of Gallagher four decades back.