Banking & Finance  December 10, 2009

Gallagher amendment debated in Loveland

LOVELAND – The author of the Gallagher Amendment and a panel of experts on Wednesday debated the merits of the tax reform measure passed in 1982, asking if it was still needed almost 30 years later.

Dennis Gallagher, a former Colorado legislator and now auditor for the city and county of Denver, defended the measure adopted by voters in an era when the state’s residential property values — and taxes — were skyrocketing. The measure resulted in a formula that tries to bring consistency and balance to assessment rates on residential and non-residential properties.

Business has been generally critical of the amendment, saying it places an unfair portion of the state’s tax burden upon commercial real estate.

SPONSORED CONTENT

Solar Operations and Maintenance for Commercial Properties

One key qualification to consider when selecting a solar partner to install your system is whether they have an Operations and Maintenance (O&M) or service department. Since solar is a long-term asset with an expected lifecycle of 30 plus years, ongoing O&M should be considered up front. A trusted O&M partner will maximize your system’s energy output and therefor the return on your investment.

Gallagher said the amendment has generally worked well, despite the passage of the Taxpayer Bill of Rights in 1992, which he said complicates the functioning of the amendment. Even so, Gallagher said Colorado consistently places high as a business-friendly state.

But Don Marostica, a former Northern Colorado state legislator and now director of Colorado’s Office of Economic Development and International Trade, said the amendment has been harmful to the state’s business reputation. “We’re not No. 1, and that’s where we need to be,” he said. “It’s a burden to us to bring new business to this state.”

Ron Stewart, who also served in the state legislature in 1982 and helped develop the amendment, said it was “a response to taxpayers who were horrified” by the increases they were seeing in their residential property taxes.

“I think the Gallagher Amendment has basically done what it was intended to do,” he said. “It would have resulted in a tripling of residential property taxes without it.”

Susan Kirkpatrick, former Fort Collins mayor and now director of the state Department of Local Affairs, said any attempt to change or remove the amendment, TABOR and Amendment 23 — which directs a certain amount of state revenue to K-12 education — will require leadership by those not seeking re-election.

“It can’t be done by a first-term governor,” Kirkpatrick said. “It would depend on someone not facing re-election.”

Marostica agreed, saying the business community needs to lead any effort to change the amendment to the state’s constitution. Gallagher echoed that, but added, “You’ve got to broaden the discussion to bring in everyone so it’s not just perceived as something for business,” he said. “This has to be very carefully marketed and I’m not sure there’s the rhetorical skills out there to do it.”

The event, held at the Embassy Suites-Loveland, was attended by about 90 people and hosted by the Colorado State University College of Business and the CSU Everitt Real Estate Center. A white paper on the intended and unintended consequences of the Gallagher Amendment prepared by Steve Laposa, director of the EREC, as well as other presentations from the event, can be found at www.realestate.colostate.edu.

After the panel discussion, Christopher King, president of DPC Development Co., was named 2009 Real Estate Entrepreneur of the Year, and David Neenan, founder of The Neenan Co. and creator of the concept of Archistruction, was inducted into the CSU Real Estate Hall of Fame.

LOVELAND – The author of the Gallagher Amendment and a panel of experts on Wednesday debated the merits of the tax reform measure passed in 1982, asking if it was still needed almost 30 years later.

Dennis Gallagher, a former Colorado legislator and now auditor for the city and county of Denver, defended the measure adopted by voters in an era when the state’s residential property values — and taxes — were skyrocketing. The measure resulted in a formula that tries to bring consistency and balance to assessment rates on residential and non-residential properties.

Business has been generally critical of the amendment,…

Sign up for BizWest Daily Alerts