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Home My WebLink About2020-42 Support Ballot Issue 2G Gallagher Stabilization Resolution No. 42, Series of 2020 Page 1 RESOLUTION No. 42 SERIES OF 2020 RESOLUTION SUPPORTING TOWN OF VAIL BALLOT ISSUE 2G REGARDING GALLAGHER STABILIZATION WHEREAS, the Gallagher Amendment was referred to Colorado voters by the Colorado General Assembly in 1982 in response to concerns about rising residential property taxes as a WHEREAS, in 1982, residential property in Colorado constituted approximately 45% of total property value in the state, with other classes of property such as commercial property, agriculture land, vacant land, industrial property and public utilities making up the other 55%; WHEREAS, the Gallagher Amendment proposed to freeze the ratio of the total value of residential property (45%) to the total value of non-residential property (55%) in perpetuity; WHEREAS, since 1982, the growth of residential property values has outpaced the growth of the value of non-residential property in the state, to the point residential property currently makes up 90% of the total assessed value of all property in Vail; WHEREAS, given the Gallagher Amendment requires residential property constitute 45% of total statewide valuation, the Colorado General Assembly has been required to reduce the sidential property from 21% in 1982 to 7.15% in 2020; WHEREAS, it is expected continued residential growth in the State of Colorado will force the Colorado General Assembly to further reduce the residential assessment rate from 7.15% to approximately 5.88% in 2021; WHEREAS, the erty tax assessment rate has resulted in an almost 300% increase in the shift of the property tax burden from homeowners to business owners; WHEREAS, the Gallagher Amendment has eroded the property tax base which funds all local public services; WHEREAS, the reduction in in the assessment rate from 7.15% to approximately 5.88% is expected to result in a revenue loss to the Town of Vail in the amount of approximately $1,400,000 in 2022; WHEREAS, if the Gallagher Amendment Repeal Measure passes, Senate Bill 20-223 of the Colorado General Assembly will take effect freezing property tax assessment rates at the current rates (7.15% for residential property and 29% for non-residential property); WHEREAS, the Vail Town Council has placed Ballot Issue 2G on the ballot in the November 3, 2020, Eagle County, Colorado General Mail Ballot Election, which would authorize, but not require, the Vail Town Council to adjust Vail levy rate for the sole purpose of maintaining revenues that may otherwise result from the Gallagher Amendment or other state imposed reductions in the ratio of assessed property tax valuations in order to avoid the continued erosion of funding of Town of Vail services; WHEREAS, the Colorado Fair Campaign Practices Act authorizes local governments to Resolution No. 42, Series of 2020 Page 2 adopt resolutions in support of or opposition to ballot issues, and it is the desire of Vail Town Council to express its overwhelming and strongest possible support of the Gallagher Amendment Repeal Measure, Town of Vail Ballot Issue 2G and WHEREAS, the Colorado Fair Campaign Practices Act also authorizes local governments to distribute in normal fashion an adopted resolution regarding any ballot issue of importance to that local government. NOW THEREFORE, BE IT RESOLVED, BY THE TOWN COUNCIL OF THE TOWN OF VAIL, COLORADO: Section 1. Recitals Incorporated. The above and foregoing recitals are incorporated by reference and adopted as findings and determinations of the Town Council. Section 2. Ballot Issue 2G . The Vail Town Council affirmatively supports the Town of Vail ballot question regarding Gallagher stabilization and urges qualified electors to vote YES on Ballot Issue 2G. INTRODUCED, PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Vail held this 6th day of October 2020. TOWN OF VAIL ATTEST __________________________ ____________________________ Dave Chapin, Mayor Tammy Nagel, Town Clerk De-Gallagher Ballot QuestionTown Council | August 18, 2020GALLAGHER PROPERTY TAX STABILIZATIONBALLOT QUESTIONTown Council | October 6, 2020 Town Council | Finance | 9/8/2020Property Tax Stabilization | Why do it?•Significant impact to town services•$9.2M lost over a 10-year period •Fire, Police, Public Works, Municipal Services•Vail fiscally responsible•Approx. 10% of taxpayer bill goes to Town of Vail•Impact $30 per year on $500,000 home•23% primary homes / 77% second homes •Stabilize Property tax collections•Vail Citizens will have a “say” in the amount of property taxes collected•Maintain quality town services•Large support from county-wide votersTown Council | Finance | 9/8/2020Property Tax Stabilization | Why do it? Town of Vail “Gallagher” Property Tax Stabilization Ballot Question 2G What would a “Yes” Vote do? A “Yes” vote would allow the Town of Vail to keep the residential assessment rate FLAT for property taxes. It does NOT increase taxes. Who is impacted by a “Yes” vote?By voting “yes”, residents will give up a future reduction in property taxes of $30 per year on a home valued at $500,000. Based on total residential values in Vail, 23% of values are owned by primary residents and 77% of values are second homeowners. Commercial property owners will not be impacted. Primary homes 23% Second homeowners 77% Who is Impacted?Estimated reduction in property taxes that would be forfeited: $30* annually per $500,000 home value *Based on an estimated decrease of 16% in 2021 residential assessment rates from 7.15% to 6% How has the Gallagher Amendment impacted the Town of Vail?The Gallagher Amendment has reduced property tax collections by $9.2 million over a 10 year period. Why does that matter? As new residences are built or remodeled, and existing property values increase, more demand is placed on town services such as public safety, snowplowing, free bus service, parking and town facilities. The town is stretched to meet the demands with reduced revenue. How would the Town of Vail benefit from the passage of 2G? The Town of Vail has always worked hard to be fiscally prudent and good stewards of taxpayer’s money. This ballot measure is only being considered in order to stabilize property tax collections and the town’s general budget. It is important to know this ballot measure does not raise property taxes. It will only help the Town maintain existing essential services as we all work towards a healthy economic recovery. Over a 10-year span, the Town of Vail’s revenue from residential property taxes declined by $9.2 million because of unanticipated consequences of an amendment to the state constitution called the “Gallagher Amendment”. The Gallagher Amendment lowers the amount of residential property taxes that a town like Vail can collect from residential property owners based on the amount of commercial property taxes collected, rather than on the assessed value of the residential properties. $(2,000) $(1,800) $(1,600) $(1,400) $(1,200) $(1,000) $(800) $(600) $(400) $(200) $- 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 $(491)$(513)$(508)$(581) $(581) $(1,048) $(1,048) $(1,209) $(1,209) $(1,977) 10 Year Loss of Property Tax Revenue (000s) The continual loss of millions of dollars in residential property tax revenue to the town in future years will eventually have a negative impact on the essential services provided to you and the Vail community. These negative impacts will include reductions in funding for local police, fire and emergency services, public works, snowplowing and ongoing road maintenance. The loss of revenue could also impact public library services and the town’s free bus service. Why doesn’t the town just cut their budget rather than ask for more money? The Town Council is asking this ballot question because of the significant drop in sales tax revenue due to the coronavirus. If approved, the ballot measure would significantly help stabilize the town’s overall revenue without raising taxes and prevent an eventual reduction in quantity and quality of town’s services. The town has already cut 10% of operating budgets ($4.5 million), used reserves of $6.3 million, and deferred $18M in capital projects due to the economic impacts of COVID-19. Why is Vail asking for this when the State of Colorado is also asking voters to repeal the Gallagher Amendment? Wouldn’t it accomplish the same goal? Yes, if the state ballot measure passes, the same goal of stabilizing property tax collections is achieved. However, the Town of Vail is asking voters to keep control with their local government should the state’s ballot question fail. Who else has asked to “de-Gallagherize” property taxes? There have been a number of local and regional entities that have been successful in this same ballot question as more and more residents are understanding the problems created by the unanticipated consequences of the Gallagher Amendment to the State Constitution. Local entities that have been successful include Vail Recreation District, Colorado Mountain College, Greater Eagle Fire, and Eagle County Paramedic Service. For this year’s November 2020 ballot, Vail voters will also see this from Eagle County and the State of Colorado.