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Constitutional Provisions

 

Colorado's Constitution includes several provisions that govern Colorado's budget. These provisions limit the traditional power of the Legislature and the Governor to set tax and budget policy for the state and instead vests much of this power with Colorado's voters.

 

 


Gallagher Amendment, adopted by Colorado voters in 1982

 

The Gallagher Amendment impacts how much Colorado homeowners pay in property taxes. Under the Gallagher Amendment, the portion of residential property that is subject to taxation (called the "assessed value") drops when residential property values statewide grow faster than nonresidential properties. In other words, when home values grow faster than business values, homeowners pay proportionately less.


 

Since 1982, residential property values in Colorado have grown faster than nonresidential properties, causing the assessment rate on residential properties to drop from 21 percent in 1982 to 7.96% today. The assessment rate on Colorado businesses is 29%.


 

For more information on the Gallagher Amendment and an analysis of its impact on property taxes, please see The Department of Local Affairs' Property Tax Division Annual Report.

 


Taxpayer's Bill of Rights (TABOR) Amendment, adopted by Colorado voters in 1992

 

Colorado's TABOR amendment restricts revenues for all levels of government (state, local, and schools). Under TABOR, state and local governments cannot raise tax rates without voter approval and cannot spend revenues collected under existing tax rates if revenues grow faster than the rate of inflation and population growth, without voter approval.


 

Under TABOR, the state has returned more than $2 billion to taxpayers rather than using these funds to pay for K-12 education, higher education, transportation, public health services, public safety and other services.


 

In 2005, Colorado voters approved Referendum C, which suspended the revenue limit in TABOR from 2006 to 2010 and modified it for future years.

 

 


Amendment 23 Education Funding, adopted by Colorado voters in 2000

 

Funding for K-12 education deteriorated after TABOR passed, and Colorado voters responded by passing Amendment 23, which guarantees minimum levels of funding for education. Under Amendment 23, per-pupil funding is required to keep pace with the rate of inflation. Additionally, between 2002 and 2011 an extra one percent is added each year in order to restore cuts.


 


For more information on the TABOR Amendment and Referendum C please see:

      


For more information on Amendment 23 please see: