In this Capitol Report:
Gubernatorial and Attorney General Forums Highlight Colorado Chamber’s 53rd Annual Meeting Luncheon
Last Thursday, the Republican and Democrat candidates for governor and attorney general participated in separate, back-to-back forums before more than 400 members of the Colorado Chamber of Commerce and their guests at the Westin Hotel in downtown Denver.
For the gubernatorial candidates–U.S. Congressman Jared Polis, Democrat, and Republican Walker Stapleton, Colorado State Treasurer–the Colorado Chamber forum followed on the heels of eight debates across the state since the primary election on late June. The forum was moderated by veteran reporter Shaun Boyd, CBS4 Political Specialist.
The attorney general forum featured Democrat Phil Weiser, former dean of the University of Colorado Law School, and George Brauchler, Republican District Attorney of Arapahoe County. The forum was moderated by Ed Sealover, veteran statehouse reporter for The Denver Business Journal.
Although the two forums were designed to allow the four candidates to present their views on a range of policy issues important to the Colorado Chamber’s members and not engage in a formal debate, the candidates naturally could not resist criticizing each other’s positions.
The gubernatorial forum covered such issues as visions for the state, growth, infrastructure, education, transportation finance, health-care, oil-and-gas production, renewable energy, regulation, taxes and employer mandates.
Perhaps the most newsworthy aspect of the gubernatorial forum came during the question-and-answer portion when the two candidates were asked about their positions on the issue of right-to-work. Here’s how Sealover later reported on the candidates’ answers:
Asked at a forum during the Colorado Chamber of Commerce’s 2018 Colorado Political Playoff luncheon about whether they would back Colorado becoming a right-to-work state like every one of its neighboring states except for New Mexico, the Republican state treasurer and Democratic congressman gave differing answers. Polis said without hesitation that he would veto any right-to-work bill that showed up on his desk, while Stapleton said he supports employers’ efforts to decide on the organization of their workplaces.
Colorado is a unique state when it comes to labor law. While there are 27 right-to-work states that allow employees to decline to be a part of any union at their workplace and 22 states that require union membership as a condition to work at companies where employees have voted to unionize, Colorado has cut a middle ground for 75 years with its Labor Peace Act. Under the 1943 law, a company’s workers must vote twice on whether they want to unionize, and they must pass the second vote by 75 percent if they want to require union membership as a condition of employment.
Legislative Republicans in recent years have tried unsuccessfully to convert Colorado to a right-to-work state but have gotten shot down each time by Democrats, usually in the state House. Some business leaders have backed the right-to-work efforts, while some prominent groups like the Denver Metro Chamber of Commerce have said they prefer to keep the way the law exists because they believe they’ve found a good balance between labor and company owners and executives.
Polis was unequivocal as to where he comes down on the effort, making one of his most demonstrative statements on a day when he failed to list specific solutions but said he would work to get business-community buy-in before tackling issues like increasing transportation funding or boosting mandates regarding employer-employee relations.
“I would veto a bill that would gut the ability of workers to organize in this state,” Polis told the crowd at the Westin Denver Downtown. He did not say whether he supports the existing law or a more traditional right-to-organize law.
Stapleton did not say specifically if he would push for or sign a law that would replace the state’s Labor Peace Act with a right-to-work statute. But he certainly said he supported the sentiment behind such a law.
“I support individual employers’ ability to have a cost-effective workplace.”
Attorney General Forum
The attorney general forum featured sharply differing comments by Brauchler and Weiser on such issues as the role of the office; enforcing the law and the State Constitution vs. policy initiatives; its relationship vis-à-vis the executive and legislative branches; healthcare; and lawsuits against the Federal Government and businesses.
Sealover has written about the differences between Weiser and Brauchler when it comes to lawsuits that involve businesses:
While Colorado’s attorney-general hopefuls offer vast differences on a variety of business issues — from oil and gas regulation to health care to enforcement of cybersecurity laws on businesses — their diverging outlooks boil down to whether the next person to hold the office should be an activist taking on the federal government or an enforcer of state laws who isn’t looking to pick fights.
Democrat Phil Weiser, a former dean of the University of Colorado Law School and antitrust attorney for the Department of Justice under President Barack Obama, believes that state attorneys general stand as a line of defense against a federal government he sees as rolling back needed protections for consumers. He said he will fight through legal action any attempt to roll back environmental protections or national health-care regulations — and will step in to try to end an appeal that the state is pushing against a ruling that public health must be its first consideration when deciding on energy-drilling permits.
Republican George Brauchler, the 18th Judicial District Attorney who prosecuted the Aurora theater shooter and the former chief of military justice for the U.S. in Iraq, said that he will only will only use legal action to counter federal overreach on states’ rights, not to “prevent federal under-reach” as he views the current wave of activist Democratic AGs as doing. So, while that could mean pushing back against the federal enforcement of long-dormant marijuana laws in states like Colorado that have legalized the drug — a view that Weiser shares — he will be working to try to enforce existing Colorado laws rather than using the office to push policies that he personally wants in place.
“I want to continue to resist the temptation we see across the country … to keep this AG’s office from becoming the next rogue Don Quixote looking for the next windmill to tilt at,” Brauchler said last month on the Colorado Business Roundtable/Denver Business Journal radio show “Colorado Election Watch.” “At 30,000 feet, the way this AG’s office operates from Colorado should be almost indiscernible from whether a Republican or Democrat does it.”
For news media coverage of the gubernatorial race, read:
“Where the Colorado governor candidates stand on renewable energy and the environment,” by Judith Kohler, The Denver Post, October 25th.
“Walker Stapleton and Jared Polis spar over different visions for Colorado in final debate,” by Jon Murray, The Denver Post, October 23rd.
“Walker Stapleton is on a crusade for fiscal responsibility, and he hopes it will take him to the Colorado governor’s office,” by Jon Murray, The Denver Post, October 14th.
“For Democrat Jared Polis, it starts with an idea. Colorado voters will tell him whether he’s got the right one,” by Nic Garcia, The Denver Post October 14th.
Amendment 73: Protect Schools’ Property Tax Revenue while Hiking Business Taxes?
In addition to raising taxes on businesses and higher-income individuals by $1.6 billion, Amendment 73 contains a complicated provision that would safeguard school districts from a reduction in residential property tax revenue while such other local taxing governmental bodies as counties, towns, cities, special districts, etc., will be hurt.
The Colorado Chamber of Commerce opposes Amendment 73.
The impetus behind this property-tax provision is the fact that property tax revenue may drop by 15 percent next year unless the legislature addresses the issue, which it did not do during the session earlier this year. Instead, it opted to study the issue over the summer and issued three recommendations for the legislature to consider next year.
The engine that drives the property-tax conundrum: rising residential property values.
Here’s the Bluebook’s description of how property taxes are computed in Colorado:
Property taxes. Property taxes are paid on a portion of a property’s value, determined by an assessment rate. Under current law, the assessment rate for most nonresidential property is set at 29 percent, and the rate for residential property is determined by the state legislature based on a formula in the state constitution. Over time, the residential assessment rate has declined from 21 percent in 1983 to the current rate of 7.2 percent. Based on the most recent projection published by Legislative Council Staff, the rate is expected to fall to approximately 6.1 percent for 2019 and 2020. The actual rate will be determined during the 2019 legislative session.
The “formula in the state constitution” is, of course, the famous Gallagher Amendment.
The Gallagher Amendment
The Gallagher Amendment, which voters passed in 1982, mandates that the total assessed value of non-residential property comprise 55 percent of the total assessment in the State while residential assessment comprise 45 percent. Consequently, the legislature must periodically re-balance assessment rates to maintain the 55-45 ratio as residential property values increase at a rate greater than non-residential values—and thus protect homeowners from paying more in property taxes.
Here’s a simple description of Gallagher:
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.
Although homeowners have been protected by Gallagher from paying more than 45 percent of the state’s total assessed value, the result has been less revenue for local taxing entities like schools, counties, cities and such special districts as fire, water, ambulance, business improvement, parks and recreation and library, just to name a few.
Because of the loss of property tax revenue by schools, the state has had to “backfill” the loss with state dollars. In the 1980s, the state paid about 43 percent of the cost of local schools. Now, it’s up to about 64 percent, which means fewer dollars are available for the legislature to spend on roads and other programs. Rural areas have felt the fiscal pinch hardest.
Why did the voters pass the Gallagher Amendment? To stave off a rebellion by residential property owners similar to the one in California that four years earlier in 1978 yielded the famous Proposition 13.
The Impact of Amendment 73 on Property Taxes
Here’s the Bluebook’s description of what Amendment 73 would do to property taxes:
Changes to property taxes under Amendment 73. For school district property taxes only, beginning in 2019, Amendment 73 reduces the nonresidential assessment rate from 29 percent to 24 percent, thereby reducing taxes for nonresidential property. The measure reduces the current residential assessment rate from 7.2 percent to 7.0 percent, and sets it at this lower rate, keeping it from falling further. Relative to a projected 6.1 percent residential assessment rate, the rate under the measure will result in a tax increase for residential property taxpayers. The measure does not impact the assessment rates for mines and lands producing oil and gas.
Taxpayer impacts. As explained above, the measure is expected to decrease school district property taxes for most nonresidential property taxpayers, and increase school district property taxes for residential property taxpayers above what would be paid in 2019 without the measure. The impact on property owners will vary significantly based on several factors, including the school finance formula mill levy rate for the local school district, the actual value of the property, the 2019 residential assessment rate without the measure, and whether and what type of mill levy overrides have been approved by the voters in the school district. For information about the projected impacts on taxpayers in a particular school district, please visit http://www.coloradobluebook.com/amendment73map.
In brief, Amendment 73 would force residential home-owners to pay more in property taxes ($255.3 million) to schools while owners of non-residential property would save $317.8 million compared to what would happen if Amendment 73 were not on the ballot. Schools would come up $62.4 million short, but the legislature could make the schools whole by backfilling the fiscal hole with dollars raised by Amendment 73.
In future years after 2019, residential property taxes due schools would only be affected by changes in property valuations or mill levy rates, or both. The assessment rate would be cemented into the Constitution at 7 percent.
The REMI Partnership study says that, with the projected residential property tax assessment rate of 6.1 percent, “This likely means that districts such as water, fire and police will face much lower revenue as the assessment rate falls while the school district rate remains constant,” the report said.
Opposing Amendment 73
This year, voters are being asked to pass Amendment 73. Recent polling data has it passing. Are you prepared?
The expensive economy-crushing $1.6 B blank check spending measure is a disaster for you and your employees.
Amendment 73 poses a triple threat to many Colorado small business owners because it will tax:
- Your business
- Your personal property
- Your income (Individual and Joint Filers making $150,000+).
Authors of Amendment 73 claim the tax will help improve Colorado education. They want you to believe it taxes only a minority of Coloradans: both claims are untrue.
In reality, Amendment 73 will drive our economy into the ground and unemployment sky-high.
Amendment 73 is the tax that just keeps taking … year after year.
Remember: As an amendment to our state constitution, 73 will be almost impossible to get rid of once it’s on the books. Expect to pay high taxes year after year. That is, if you’re able to keep your business afloat here in Colorado.
Chuck Berry of the Colorado Chamber of Commerce said this about the unwieldy, deceptive ballot measure: “Amendment 73 would cement an extremely complicated measure into the Colorado Constitution with unforeseen consequences.”
When measures like 73 passed in other places, businesses pulled up stakes and moved to more business-friendly states.
Authors of Amendment 73, championed by big union organizers, drafted the deceptive measure. And they didn’t care what it would do to your business or our economy.
Get Vocal: Your business depends on the defeat of 73. Here’s how you can help spread the word about this ill-conceived and deceptive tax hike:
- Print the No on 73 Flyer to distribute to your employees, friends, family and neighbors. https://www.noamendment73.com/resources
- Go on social media: Retweet and Share No on 73 posts.
For news media coverage of this issue and related information, read:
“Colorado lawmakers punt property tax dilemma—centering on Gallagher Amendment—to summer,” by Brian Eason, The Denver Post, May 3rd.
“Colorado’s small towns see their tax base dry up. State lawmakers know it is a problem, but no fix is insight,” by Brian Eason, The Associated Press, The Denver Post, April 20th.