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CML Newsletter
September 25, 2020
On Sept. 18, the CML Board met and took positions on four ballot initiatives. Those initiatives are listed below as well as the rationale for the position.
Amendment B — Gallagher Repeal
Amendment B repeals provisions related to the residential and nonresidential assessment rates from the state constitution, including the provisions commonly referred to as the Gallagher Amendment. The Gallagher Amendment requires that residential and nonresidential property make up unvarying proportions of total statewide taxable property over time. Specifically, it requires that the assessed value of residential property make up 45% of statewide taxable property with the remaining 55% derived from nonresidential property. The Gallagher Amendment also requires the assessed value of nonresidential property to remain fixed at 29%.
Over time, without this measure, the residential assessment rate is projected to continue to fall due to the relative growth of residential versus nonresidential assessment rates. A stabilized assessment rate for residential property will result in higher property tax revenue for local governments in many locations in Colorado, including municipalities, counties, school districts and special districts.
The CML Executive Board voted to support Amendment B because it will resolve conflicts in the Colorado Constitution, provide additional flexibility to lawmakers and help to stabilize local property revenues over time.
Proposition 118 — Family Medical Leave Insurance Enterprise
Proposition 118 creates a state-run paid family and medical leave (PFML) insurance enterprise in Colorado that allows employees to take up to 12 weeks of leave. An eligible employee may take leave for reasons such as caring for their own health condition, caring for a new child, or caring for a family member. Employees are not required to take leave consecutively. Both employers and employees will pay into a new Family and Medical Leave Insurance Fund. The state will use money in the fund to pay wage benefits to employees during their leave, similar to unemployment insurance. The amount an employee will receive during leave is based on the employee’s average weekly wage. Most employees become eligible to take paid leave after they have earned at least $2,500 in wages and become eligible for certain job protections after being employed with their current employer for at least 180 days.
Proposition 118 allows a municipality to "opt out" of the program. However, there are operational aspects of the initiative that will still impact the employer-employee relationship, even if the municipality opts out. The largest is that an employee can still join the program even if a municipality opts out. This creates confusion and inequity between employees and will disproportionately impact smaller municipal employers in rural areas in order to provide services for an employee that is out 12 weeks.
The CML Executive Board voted to oppose Proposition 118 because it directly interferes with a municipality’s ability to determine the terms and conditions of employment.
Amendment 77 — Local Voter Approval of Gaming Limits
Amendment 77 would amend the Colorado Constitution and state statute to allow voters in Central City, Black Hawk, and Cripple Creek to vote to increase bet amounts beyond the current $100 maximum and expand the types of games allowed at casinos in the three cities beginning in May 2021. Additionally, the measure would allow gaming revenue distributed to the state’s public community colleges to be spent on programs that improve student retention and increase completion of credentialed programs. Because it amends the Colorado Constitution, Amendment 77 will need 55% approval to pass. If it passes and local communities vote to increase bet limits, local government revenue may increase if gaming tax revenue goes up.
The CML Executive Board voted to support Amendment 77 because it enhances local control for aspects of gaming in the cities of Black Hawk, Central City, and Cripple Creek; may increase revenue to community colleges in several Colorado municipalities; and may increase municipal revenue received through limited gaming fund distributions.
Proposition EE — Cigarette, Tobacco, Nicotine Products and Vaping Products
Tax Increase
Proposition EE is a legislatively-referred $294 million state tax increase, primarily for preschool and K-12 education programs. Of interest to municipalities, a fraction of the revenue will be earmarked for housing programs – but only in the first three years after it takes effect. The measure preserves the historical allocation formulas that apportion some state cigarette tax revenues to municipalities, as well as recent statutory reforms that allow municipalities to regulate tobacco and nicotine without forfeiting their cigarette tax allocation. There are concerns with how Proposition EE would affect local nicotine taxes.
The CML Executive Board voted to oppose Proposition EE as a statewide tax would preclude the likelihood of passage of any subsequent local taxation questions, if proposed.
Amendment B — Gallagher Repeal
Amendment B repeals provisions related to the residential and nonresidential assessment rates from the state constitution, including the provisions commonly referred to as the Gallagher Amendment. The Gallagher Amendment requires that residential and nonresidential property make up unvarying proportions of total statewide taxable property over time. Specifically, it requires that the assessed value of residential property make up 45% of statewide taxable property with the remaining 55% derived from nonresidential property. The Gallagher Amendment also requires the assessed value of nonresidential property to remain fixed at 29%.
Over time, without this measure, the residential assessment rate is projected to continue to fall due to the relative growth of residential versus nonresidential assessment rates. A stabilized assessment rate for residential property will result in higher property tax revenue for local governments in many locations in Colorado, including municipalities, counties, school districts and special districts.
The CML Executive Board voted to support Amendment B because it will resolve conflicts in the Colorado Constitution, provide additional flexibility to lawmakers and help to stabilize local property revenues over time.
Proposition 118 — Family Medical Leave Insurance Enterprise
Proposition 118 creates a state-run paid family and medical leave (PFML) insurance enterprise in Colorado that allows employees to take up to 12 weeks of leave. An eligible employee may take leave for reasons such as caring for their own health condition, caring for a new child, or caring for a family member. Employees are not required to take leave consecutively. Both employers and employees will pay into a new Family and Medical Leave Insurance Fund. The state will use money in the fund to pay wage benefits to employees during their leave, similar to unemployment insurance. The amount an employee will receive during leave is based on the employee’s average weekly wage. Most employees become eligible to take paid leave after they have earned at least $2,500 in wages and become eligible for certain job protections after being employed with their current employer for at least 180 days.
Proposition 118 allows a municipality to "opt out" of the program. However, there are operational aspects of the initiative that will still impact the employer-employee relationship, even if the municipality opts out. The largest is that an employee can still join the program even if a municipality opts out. This creates confusion and inequity between employees and will disproportionately impact smaller municipal employers in rural areas in order to provide services for an employee that is out 12 weeks.
The CML Executive Board voted to oppose Proposition 118 because it directly interferes with a municipality’s ability to determine the terms and conditions of employment.
Amendment 77 — Local Voter Approval of Gaming Limits
Amendment 77 would amend the Colorado Constitution and state statute to allow voters in Central City, Black Hawk, and Cripple Creek to vote to increase bet amounts beyond the current $100 maximum and expand the types of games allowed at casinos in the three cities beginning in May 2021. Additionally, the measure would allow gaming revenue distributed to the state’s public community colleges to be spent on programs that improve student retention and increase completion of credentialed programs. Because it amends the Colorado Constitution, Amendment 77 will need 55% approval to pass. If it passes and local communities vote to increase bet limits, local government revenue may increase if gaming tax revenue goes up.
The CML Executive Board voted to support Amendment 77 because it enhances local control for aspects of gaming in the cities of Black Hawk, Central City, and Cripple Creek; may increase revenue to community colleges in several Colorado municipalities; and may increase municipal revenue received through limited gaming fund distributions.
Proposition EE — Cigarette, Tobacco, Nicotine Products and Vaping Products
Tax Increase
Proposition EE is a legislatively-referred $294 million state tax increase, primarily for preschool and K-12 education programs. Of interest to municipalities, a fraction of the revenue will be earmarked for housing programs – but only in the first three years after it takes effect. The measure preserves the historical allocation formulas that apportion some state cigarette tax revenues to municipalities, as well as recent statutory reforms that allow municipalities to regulate tobacco and nicotine without forfeiting their cigarette tax allocation. There are concerns with how Proposition EE would affect local nicotine taxes.
The CML Executive Board voted to oppose Proposition EE as a statewide tax would preclude the likelihood of passage of any subsequent local taxation questions, if proposed.
Past Issues
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