Everything will go wrong with Murphy’s amendment

On the Nov. 5 ballot, voters will face Amendment 11, sometimes called the Murphy Amendment after the Colorado Springs attorney responsible for its drafting.The one-sentence summary begins by asking, “Shall there be an amendment to the Colorado Constitution concerning property tax exemptions …” and concludes with “… and decreasing the property tax rate to prevent a net revenue gain to a taxing entity as a result of the elimination of exemptions, unless otherwise provided by general law?” The “summary” contains another 108 intervening words not cited.
The substance of the amendment is to eliminate tax exemption for real property used for religious and charitable purposes except for schools, community-corrections facilities, orphanages, or limited underprivileged housing. The thrust of the amendment is to tax churches, temples and nonprofit organizations in return for lowering residential taxes.
Beware of long sentences that make promises not supported by fact. Because of the Gallagher and Bruce Amendments already etched into the Constitution, the only taxes that could possibly be lowered will be those of commercial property owners – and that by a small amount.
The proposed amendment’s only certainty is that church and charitable real property will be taxed as commercial property, at 29 percent of actual value. Translated into real numbers, it would cost $2,900 in property taxes for each $100,000 of actual real estate value, if the local tax levy is 100 mills. Thus, any church or synagogue with property appraised at $1 million would be subject to annual property taxes of $29,000.
If churches are the house of God, someone needs to explain why the lower and more favorable residential assessment rate of 10.36 percent is not more applicable than the punitive commercial assessment rate.
In America today, we are demanding that government do less and that religious and charitable organizations do more.
Many observers fear that churches and agencies will need to shift moneys from their social programs to fund their new annual tax burden. With the increasing pressure on charities to perform with limited resources, how will Colorado be a better place if the Boy Scouts are required to pay commercial property taxes on their scout camp, and the Children’s Clinic and Respite Care on their buildings?
Charities already pay taxes on their property not used for their charitable purposes. In Estes Park, for instance, the YMCA Camp of the Rockies pays taxes on the portion of its camp operated for profit.
Just like Murphy’s Law – which says if something can go wrong, it will go wrong – Murphy’s Amendment will not bring the promised result of lower residential property taxes. Don’t be deceived by the large numbers tossed around. Think of your church or temple and the charitable entities that you and your family contribute to and benefit from when you vote in the November election. Is it worth trading the financial stability of these organizations for, at best, a minuscule reduction in taxes?
For the sake of religious and charitable institutions’ ability to serve those who need them, consider your vote carefully on Amendment 11.Former Fort Collins mayor John Knezovich is a certified public accountant.
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