What is the Gallagher Amendment?
The Gallagher amendment, passed in 1982, was designed to maintain a constant ratio between the property tax revenue that comes from residential and business property. To simplify a set of very confusing formulas, the effect of Gallagher was to reduce the assessment rate (the percent of property value that is subject to taxation) whenever statewide total residential property values increased faster than business property values. As a result of the Gallagher amendment, the assessment rate for residential property has declined by more than two-thirds over the years because of Colorado’s population growth and because of increases in real estate values. (Colorado now has among the lowest residential property tax rates in the country.
