Am. 32 Property Tax Increase a Bad Idea
by Penn R. Pfiffner and Douglas Bruce, October 24, 2003 (posted)
If you want to pay higher property taxes on your home, vote for Amendment 32. If you don't, vote "NO." The issue is just that simple.
Amendment 32 is not a "freeze." That is a lie. It will increase the share of your home's value subject to tax. It will also repeal the legal requirement that your tax increases be moderated in the future. In the first year, an average homeowner pays only an extra $6. The next two years, that homeowner will pay an extra $58 per year. The following two years, that homeowner will pay an extra $119 per year. In just the first five years, that's $360 in higher taxes. And because the tax increase goes on forever, Amendment 32 only gets worse.
In the past 60 years, Colorado property taxes have increased 100-fold, from $44 million to $4.4 BILLION, many times faster than inflation and population combined. Since the Taxpayer's Bill of Rights (TABOR) passed in 1992, total property taxes have still risen 82%. Isn't that fast enough?
The tax increase will go mostly to local governments. Amendment 32 will not provide more money for schools because, under existing law, additional property tax revenue will be offset by reduced state aid.
Some people point to the larger share of property taxes paid by businesses. But Amendment 32 will not lower non-residential taxes. Homeowners will pay more taxes, and tenants will pay higher rents, but businesses may get no relief. The part of non-residential property subject to tax will remain the same, and their tax rate will remain the same, so their tax bill will continue to be determined by each separate property's assessed value, just as today.
Only governments get a windfall. Where will they spend it? No one knows. Amendment 32 is a multi-million dollar blank check. It undercuts all citizen efforts to reduce wasteful spending and end failed programs.
The ballot title for Amendment 32, written by government, conceals that it is a tax increase. As we all have seen on local ballots, the constitution (TABOR) requires that any tax increase begin "SHALL (DISTRICT) TAXES BE INCREASED $X ANNUALLY...?" The state title board decided to violate that law. They knew telling voters the truth would torpedo this sneaky scheme to increase tax revenue.
Even the state Blue Book recently mailed to voters admitted in its opening words that Amendment 32 "increases the taxable portion of residential property" and "repeals the requirement to reduce the percentage in the future." That translates into a double whammy of higher taxes. It means that future assessment increases of 15% can cause a property tax bill to increase 15%, not a slower 5% or 6%.
Since this constitutional protection, known as the Gallagher Amendment, was approved by voters 21 years ago, homeowners have saved $7 billion dollars in tax relief. Since voters passed TABOR 11 years ago, that tax relief is no longer automatically shifted to business in the form of higher property tax rates to offset homeowner savings. Yet most governments still get more tax money every year.
Repeal of this constitutional protection opens the door for special interests to lobby for tax loopholes. No longer will residential property be guaranteed to pay only about half of property taxes. Homeowners could end up paying a greater share of total property tax revenue to pay for bigger government, including projects the politicians have not even told us about.
The tax pushers backing Amendment 32 want millions in higher property taxes, but they can't even balance their own books. Public records show campaign deficits for their last four campaign reports -- first $2,351, then $8,401, then $6,801, and now $4,901. If they can't manage their own simple account, does their side really deserve millions more in taxes?
Their campaign claims to be "grassroots." But they did not get most of their campaign funds from homeowners like you and me. As of September 29th, they had received over $135,000 in donations from only eight special interests which wrongly think they see something in Amendment 32 for themselves.
Amendment 32 reflects undefined, ever bigger government, an idea brought forth by the usual suspects who would rather take a larger percentage of your earnings than make the hard decisions about what Colorado can really afford. If you are an ordinary citizen who wants to be able to afford to keep your home, to help seniors stay in their homes, to limit tenant rent increases, and to help others buy their first home so they also can live the American Dream, then vote "NO" on Amendment 32. It's nothing but a pre-Thanksgiving turkey, created to gobble up your money.
Penn R. Pfiffner is president of the Colorado Union of Taxpayers and a former state representative. Douglas Bruce is the author of the Taxpayer's Bill of Rights. They suggest that readers write a letter to the editor of major papers and any local paper, incorporating one or more of the arguments in the essay.