10/29/2020

Colorado Local Bond Measure Election Analysis

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This year Colorado voters will be presented with approximately 1.5 billion in K-12 municipal issuance and mill levy overrides in 20 school districts, as well as Amendment B, a statewide ballot measure that would repeal the Gallagher Amendment, and Proposition 116 to reduce the state income tax rate. The Gallagher Amendment is a constitutional limit to the amount of property tax revenue Colorado residential property owners pay, currently 45%, compared to the 55% nonresidential property owners pay of the overall property tax revenue.

See Portfolio Manager Chris Johns’ comments on the Gallagher Amendment in a recent article  published in the Denver Post.

Property tax revenue supports public schools, county governments, special districts and municipal governments. The residential assessment rate is currently 7.15% for residential properties and fixed at 29% for nonresidential properties. A repeal of the Gallagher Amendment will keep the residential assessment rate at 7.15% for residential properties and will eliminate projected future reductions in the residential assessment rate, which could result in higher property taxes for residential taxpayers in the future. Proposition 116 is a statewide ballot issue that would reduce the state income tax rate from 4.63% to 4.55%. The passage of Proposition 116 could reduce state income tax revenue by $154 million in fiscal year 2021-22.

School Bond Issues

Unlike at the state level, where Colorado has experienced difficulty in passing tax increases, voters have historically shown a willingness to approve local bond issues. These measures are used to finance new schools and other capital improvements throughout the state. School district bond issues on the November ballot range in size from approximately $220,000 to as much as $795 million.