Amendment B – A bit of the backstory

by Ed DeCecco

The year was 1982. Michael Jackson released Thriller, ET was phoning home and charming audiences the world over, and the Denver Broncos finished last in the AFC West. More notably for Colorado taxpayers, voters also approved Amendment 1, which was passed by the General Assembly as House Concurrent Resolution No. 1005.

Amendment 1 was a constitutional amendment and it was first. (Note: My editor has informed me that wasn’t quite enough backstory.) Amendment 1 was a comprehensive restructuring of article X, section 3 of the Colorado Constitution that made a number of changes to the property tax system. Prior to its introduction, a Citizen’s Panel reviewed and made recommendations for changing the property tax system, and then a House Ad Hoc Committee synthesized those recommendations into a concurrent resolution. Amendment 1 exempted some properties; established penalties for counties that failed to value property correctly; made a number of changes to the State Board of Equalization; and last but not least, amended how actual property value is determined and how property is valued for assessment.

Now, if you are a county assessor, you would read this last item and think to yourself “Everyone knows how to value and assess property. On with it, you buffoon!” But for everyone else, a brief explanation of the property tax system is probably helpful. First, the actual value of property is determined for each assessment cycle, which for most property begins every odd-numbered year. The assessed valuation of the property is then determined by multiplying the actual value by the applicable assessment rate. Finally, the assessed valuation is multiplied by a local government’s mill levy, which is the property tax rate expressed in one one-thousandths, to determine the amount of tax owed.

Prior to Amendment 1, the assessment rates were fixed in statute at 30% for residential and nonresidential property, although there were also a number of subclasses of property that had lower assessment rates established in law. With the exception of producing mines and lands or leaseholds producing oil or gas, Amendment 1 required nonresidential property to be assessed at 29% of its actual value, and residential property to be initially assessed at 21% of its actual value.

But as a result of the conference committee report for House Concurrent Resolution No. 1005 that both chambers adopted, article X, section 3 (1)(b) of the Colorado Constitution requires the General Assembly to determine the percentage of aggregate statewide assessed property that is attributable to residential real property for the 1985 property tax year and to recalculate that percentage each year thereafter based on certain adjustments (called the “target percentage” in statute).[1] Each property tax year when there is a change in the level of value, which is the biennial reassessment cycle, the General Assembly must adjust the residential assessment rate with the goal of keeping the target percentage the same as it was in the year immediately preceding the new assessment cycle. You probably know this provision by its common moniker—the Gallagher Amendment.[2]

As a result of the Gallagher Amendment, the residential assessment rate has over time declined to 18%, 16%, 15%, 14.34%, 12.86%, 10.36%, 9.74%, 7.96%, 7.2%,[3] and finally to its current level of 7.15%. Those percentages remind me of the scores on my last 10 German tests in high school. And just as my scores alarmed my high school German teacher and parents, this trend of lowering residential assessment rates caught the attention of the General Assembly. Thus, it convened the Alternatives to the Gallagher Amendment Interim Study Committee during the interim after the 2018 legislative session. As part of this committee, the legislators heard testimony about the declining residential assessment rate and the effect on local governments and, as its name suggested, considered alternatives to the Gallagher Amendment.

While no proposals passed in 2018 as a result of the interim committee, perhaps a seed was planted, as two committee members—Senator Jack Tate, Arapahoe County, and Representative Daneya Esgar, Pueblo County—were prime sponsors of Senate Concurrent Resolution 20-001. Senate Concurrent Resolution 20-001. And if that happens, the assessment rates will remain constant—7.15% for residential property and 29% for nonresidential property—by operation of the existing statutory provisions. So if Amendment B passes, the state will be back where it started prior to the election in 1982. The assessment rates will be set in statute, and the Broncos will likely finish in last place again.[4]


[1] This is often described as a 45%/55% split, which describes the first ratio of aggregate statewide valuation of assessment attributable to residential property to the aggregate statewide valuation of assessment attributable to nonresidential property, but the actual target percentage often varies a percentage point or two from 45%.

[2] No, it is not named after the 70s prop comedian known for smashing watermelons with oversized hammers, but rather for Dennis Gallagher, the legislator and later City and County of Denver Councilperson and Auditor, who championed the provision as a state Senator.

[3] These decreases were not in successive years. Sometimes the residential assessment rate stayed constant.

[4] For more information about Amendment B, see the Blue Book at