Assessment Rate Shrinks, But Not Drastically

May 10, 2019

Credit Colorado Department of Local Affairs

In the fall of 2018, special taxing districts, like Colorado Mountain College (CMC), went to voters with a problem: because of a complicated state law, growth on the front range meant they were in financial trouble.


The danger, it turns out, wasn’t nearly as bad as expected.

The trouble came from a complicated part of Colorado’s constitution, called the Gallagher Amendment. It stipulates that 55 percent of all property tax collected in the state needs to come from commercial property; residential property makes up the remaining 45 percent.

The real estate boom on the front range have forced the state to lower the residential assessment rate in order to maintain this ratio.


Special districts rely heavily on property tax, so a lower residential assessment rate can put them at serious financial risk.

Last fall, special districts, like everyone else, predicted the residential assessment rate would fall dramatically, from 7.2 percent to 6.11 percent. CMC projected a $3.8 million loss. The nosedive never happened, in fact, a new residential assessment rate of 7.15 percent passed a few weeks ago, which is down a little, but not much.

Over the past year, home values grew, as did commercial property values, thanks in large part to a boom in oil and gas development on the Front Range.

Special districts, like CMC, or the Carbondale and Rural Fire Protection District wouldn’t have faced the losses they were expecting to.

Of course, there’s no way of telling what the assessment rate will be. Some think that voters should see the difference in the predicted versus actual residential assessment rates as a lesson.

“When the governments are talking to us about why they need an increase, and they use estimates of what the residential assessment rate is going to be, we have to take that now with a grain of salt,” said Jim Yellico, Garfield County’s Assessor.


Special districts would argue that if they can’t predict property tax revenue because of the Gallagher Amendment, they have to play it safe and go to voters to ask for higher mill levies.