The Gallagher Amendment, passed in 1982, was designed to maintain a constant ratio between the property tax revenue that comes from residential property and from business property. To simplify a set of complex formulas, the effect of Gallagher was to reduce the residential assessment rate (the percent of property value that is subject to taxation) whenever statewide total residential property values increased faster than business property values. As a result of the Gallagher Amendment, the assessment rate for residential property has declined by more than two-thirds over the years because of Colorado’s population growth and because of increases in residential real estate values. The net effect has been a marked decline in revenues collected from property tax, which prior to the passage of Gallagher, provided the majority of school funding.  (For more detailed information about the Gallagher Amendment, see our School Finance 101 presentation.) Acting Together, the Gallagher and TABOR Amendments make it impossible for the combination of state and local revenues to adequately fund schools. As assessment rates drop (like they did often over the past 28 years), causing districts’ revenue to plummet, the state is required to shoulder the remaining financial burden. But because TABOR’s spending cap fixes the amount spent per year on schools at an insufficient level, the state hasn’t been able to successfully pick up the slack. In November of 2020 Coloradans took a step toward fixing this problem by approving Amendment B, which freezes the assessment rate at 7.15% for residential properties and 29% for non-residential properties. Voters passed Amendment B in the middle of the COVID-19 economic downturn, sparing Colorado’s education system hundreds of millions in further cuts. However, the amendment raises no new dollars, leaving Colorado voters to approve any new tax increases (as mandated by TABOR).