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Gallagher Amendment Review


September 23, 2020

What does the Gallagher Amendment do? 
  • Divides the state's total property tax burden between residential and nonresidential (commercial) property.
  • Further, the Amendment mandates that the assessment rate for commercial property, which is responsible for 55% of the total state property tax burden, be fixed at 29%. The residential rate, on the other hand, is annually adjusted to hold the 45%/55% split constant. 
How was the 45%/55% split set by the Gallagher Amendment determined? 
  • In 1982, residential property was responsible for 45% of the state's total property value, and the commercial property was responsible for 55% of the state's total property value. The authors of the Gallagher Amendment believed that the overall property tax burden should continue to reflect this split. As a result, with the passage of the Gallagher Amendment, the 45%/55% split was set in stone.
Why has the residential assessment rate gone down since 1982?
  • In 1982, the first year of Gallagher, the residential assessment rate was 21% (and the nonresidential property assessment rate was 29%, as fixed by Gallagher in perpetuity). However, the rapid escalation in residential property values, combined with the growth boom of the 1990s, led to the 45% share of property tax collected from residential properties being dispersed across more and more residences that were worth more and more money. Something had to give in order to maintain the 45%/55% split. 
  • In Colorado, in order to maintain the 45%/55% split, the residential property assessment rate has dropped from 21% in 1982 to the current level of 7.15% and an estimated rate of 5.88% for tax years 2021 and 2022.
Does residential property still account for 45% and commercial property 55% of the state's total property value?
  • NO, in the 38 years since Gallagher passed, increases in residential property values have significantly outpaced the increases in the value of commercial property. In fact, residential property, which made up only 45% of the state's total property value in 1982, today accounts for 75% of the state's total property value. However, due to the Gallagher Amendment, residential property is only responsible for 45% of the state's total property tax burden. Conversely, commercial property, which now accounts for only 25% of total property value in the state, is still responsible for 55% of the state's total tax burden. 
 
  • The ballot title for Amendment B is as follows:
"Without increasing property tax rates, to help preserve funding for local districts that provide fire protection, police, ambulance, hospital, kindergarten through twelfth grade education, and other services, and to avoid automatic mill levy increases, shall there be an amendment to the Colorado constitution to repeal the requirement that the general assembly periodically change the residential assessment rate in order to maintain the statewide proportion of residential property as compared to all other taxable property valued for property tax purposes and repeal the nonresidential property tax assessment rate of twenty-nine percent?"

Amendment B would repeal the Gallagher Amendment of 1982, which limits the residential and non-residential property tax assessment rates so that residential property taxes equal 45% of the total share of state property taxes and non-residential property taxes equal 55% of the total share of state property taxes. 


A Yes Vote on Amendment B (Gallagher repeal) means:
  • Repealing the Gallagher Amendment, which set residential and non-residential property tax assessment rates in the state constitution;
  • Allowing the Colorado State Legislature to freeze property tax assessment rates at the current rates (7.15% for residential property and 29% for non-residential property); and
  • Allowing the state legislature to provide for future property tax assessment rate adjustments through state law.
A No Vote on Amendment B (Gallagher repeal) means:
  • Maintaining the Gallagher Amendment, which requires a residential to non-residential property tax ratio of 45% to 55% and requires the state legislature to adjust the residential assessment rate to maintain the required ratio. Since 1982, the residential property tax assessment rate has dropped from 21% to 7.15% under the Gallagher Amendment. 

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DePaul Real Estate Advisors
4500 Cherry Creek Drive South, Suite 860
Denver, CO 80246-1521
303-333-9799
www.depaulrea.com
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CALL US TO SEE HOW DEPAUL CAN HELP YOU EXECUTE YOUR PROJECT
DePaul Real Estate Advisors
4500 Cherry Creek Drive South, Suite 860
Denver, CO 80246-1521
303-333-9799
www.depaulrea.com
Read More...

What's Happening in Colorado


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CALL US TO SEE HOW DEPAUL CAN HELP YOU EXECUTE YOUR PROJECT
DePaul Real Estate Advisors
4500 Cherry Creek Drive South, Suite 860
Denver, CO 80246-1521
303-333-9799
www.depaulrea.com
Read More...

What's Happening in Colorado


April 2, 2020

Dear Real Estate Professionals,

I hope this finds you healthy and standing tall to meet the challenges ahead.  We may feel like we are six feet under, but we cannot lose sight of the fact that we are professionals and we have the skills and abilities to maneuver through anything.  Our greatest challenge in life is dealing with the unknown.  Our new unknown challenge is a bug named COVID-19 a.k.a the Corona Virus.  It has presented us with unprecedented damage to our families and businesses.   Unlike other types of natural disasters, our bricks and mortar are still standing.  We now need to formulate a plan to maintain their value and viability.   That is where DePaul Real Estate Advisors can help.   Our assistance combines decades of knowledge and experience in debt, equity, leasing, and investment sales markets.   Combined, we can help evaluate your assets and devise a plan to emerge strong on the other side of this Pandemic. 

Here are a few helpful links for small business aid via the Federal assistance programs.  In addition, there is other noteworthy news. We have also included a couple mind distracting links to escape for a minute or two from your day to day endeavors.  

Sincerely, 

Paul DeCrescentis
President
DePaul Real Estate Advisors

Paycheck Protection Program (PPP)
Loans That Will Cover Your Rent & Payroll and Can Be Forgiven In Time

The program provides cash-flow assistance through 100 percent federally guaranteed loans to employers who maintain their payroll during this emergency. If employers maintain their payroll, the loans would be forgiven, which would help workers remain employed, as well as help affected small businesses and our economy to snap-back quicker after the crisis. PPP has a host of attractive features, such as forgiveness of up to 8 weeks of payroll based on employee retention and salary levels. Learn more. 

> Apply For PPP At Any Lending Institution (See page 28)

SBA Economic Injury Disaster Grant (EIDL)
$10,000 Emergency Advance


These grants provide an emergency advance of up to $10,000 to small businesses and private non-profits harmed by COVID-19 within three days of applying for an SBA Economic Injury Disaster Loan (EIDL). To access the advance, you must first apply for an EIDL and then request the advance. The advance does not need to be repaid under any circumstance, and may be used to keep employees on payroll, to pay for sick leave, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent and mortgage payments.

> Apply Here For $10,000 Federal Grant

Denver Economic Development & Opportunity Emergency Relief
$7,500 Grant


Denver Economic Development and Opportunity (DEDO) has established an emergency relief fund to provide cash grants up to $7,500 to qualifying small businesses. The highest priority will be the industries most impacted by the coronavirus pandemic, such as the food industry. These businesses may have had to temporarily close, are struggling with paying their rent and utilities, or have had to lay off staff. Learn more.

> Apply Here For $7,500 Denver Grant

Other Resources:

Colorado Banks Ready For SBA Lending;
Page 28 Shows List By Town

U.S. Chamber Of Commerce Summary
of PPP and EIDL

Questions About Force Majeure Clauses

Questions About Business Interruption Insurance

Small Business Owner's Guide

ICSC Federal CARES Act Summary

Denver Metro Chamber All Things COVID and Relief Page

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Some things just for fun:

A Virtual Playing Card Table - Play card games virtually with your friends and family online

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CALL US TO SEE HOW DEPAUL CAN HELP YOU EXECUTE YOUR PROJECT
DePaul Real Estate Advisors
4500 Cherry Creek Drive South, Suite 860
Denver, CO 80246-1521
303-333-9799
www.depaulrea.com
Read More...

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CALL PAUL OR JAROD TO SEE HOW DEPAUL CAN HELP YOU EXECUTE YOUR PROJECT
DePaul Real Estate Advisors
4500 Cherry Creek Drive South, Suite 860
Denver, CO 80246-1521
303-333-9799
www.depaulrea.com
Read More...