While Gallagher’s intentions were good, to prevent unaffordable home property taxes during a period of rising values, the result is a threat to the lifeblood of the local economy. All it did was transfer taxes from homes to business. The only way you won’t pay for it is if you don’t work for a living, or shop here. The increased taxes paid by businesses have to be passed on through higher prices and fewer jobs.
Gallagher is the poster child of unintended consequences and why tax law should be statutory, not constitutional. No one knew the escalating burden that would be placed on business. It has caused commercial property taxes to rise at an unsustainable rate.
This could not be at a worse time when small businesses have either closed or are headed to oblivion due to the massive pandemic job loss. Depending on the sector, businesses are down up to 80% to date. Small businesses account for the majority of job growth. Yet we face the sudden destruction of an entire sector of the economy. While those who have tenuously survived predatory big business, the pandemic is the final death blow to hundreds of thousands of firms across the economy. Major online and colossal multi-nationals will appropriate the void; a barrier to reentry remains which may never be crossed by individuals with a dream, a major factor that built the middle class.
Escalating property taxes are yet another taking of business viability when fixed at the 29% assessment rate. The problem is that the commercial tax base in many areas is in decline and therefore shouldering an ever-growing burden. Downtown Denver, once mostly commercial, is now about 50% residential. My family business, Rockmount, struggled to reach the 4th generation but our property taxes rose about 28% in 2017 and 20% again last year!
The increase since 2010 is 140%. Did my business go up that much? Whose business went up that much? Nobody I know.
This is tantamount to the government taking our property. What business can raise prices to cover that, and the cycle repeats every 2 years?
This gives me pause and raises my blood pressure.
As we approach Halloween, think of Gallagher as a vampire sucking our economic vitality. Don’t be tricked into thinking it is as simple as keeping home taxes down. The reality is that the savings are transferred to businesses. Do not be deceived into thinking Gallagher has lowered your costs, they get paid through higher consumer costs and wage loss. To be clear Covid has caused massive job loss and so will escalating commercial property taxes.
My locally owned company’s excessive property tax affects our ability to hire. The pandemic is the worse challenge we have ever faced in 75 years. We can pay the tax or hire a new person, pay the tax or invest in our business. Do you wonder why we may be the last of the original wholesale businesses in Lower Downtown?
Running any business has gotten a lot harder, and excessive taxes have made it worse. Help us survive Covid – Repeal Gallagher – it should have never been put in the constitution in the first place.
Steve Weil is president and chief creative officer of Rockmount Ranch Wear.
To send a letter to the editor about this article, submit online or check out our guidelines for how to submit by email or mail.