Colorado Gov. John Hickenlooper wants to prune the state’s “thicket” of conflicting constitutional amendments.

DALLAS -- Colorado residential and business property values have increased 14.3% in two years, according to the state Division of Property Taxation.

Assessed commercial property values between June 30, 2012 and June 30, 2014 rose 9.4%, farmland was up 11.1% and industrial property increased 5.5%, according to the Jan. 15 report.

The report, required under state law every two years, provides a basis for the Colorado General Assembly to set the residential property assessment rate.

The statewide rate is applied against a residential property's actual value to determine assessed value. The local mill levy is then applied to set property taxes due.

The General Assembly is required to adjust the residential assessment rate to guarantee that the percentage of residential real property assessed value remains essentially the same as it was the preceding year.

The state's 1992 Taxpayer Bill of Rights constitutional amendment, or TABOR, requires that higher revenues produced by increasing property values be returned to taxpayers or that the taxing jurisdiction hold an election allowing the state or local governments to retain the higher revenues.

TABOR requires revenues to be returned to the taxpayers if they grow faster than the rate of inflation and population growth.

Colorado Gov. John Hickenlooper indicated that he was ready to challenge the TABOR restrictions in his state-of-the-state address Jan. 15. Hickenlooper called TABOR and other constitutional amendments approved by voters a "thicket" of competing demands.

Amendment 23, passed by voters in 2000 to bring state education spending up to the national average, required K-12 funding to increase by inflation plus 1% from 2001-2011 and by inflation after that. Even with Amendment 23, by 2007-08, per-pupil funding was still $1,400 below the national average.

The so-called "Gallagher Amendment," named for former legislator and Denver Auditor Dennis Gallagher, was approved in 1982. The amendment set forth the guidelines in the Colorado Constitution for determining the actual and assessed value of property. Those values were contained in the Jan. 15 report from the Division of Property Taxation.

"There is no shortage of thorns in this fiscal thicket," Hickenlooper said. "And while we will continue to strategically prune, our state budget can only endure so much cutting."

As Colorado's residential and business property values climbed over the past two years, the value of oil and gas properties actually fell, according to the report. With oil prices down by half in the past six months, the value of the property producing that oil also declined. The property values are based on the value of the resource.

Thus, Colorado's economic indicators are mixed as lawmakers write the budget for the next fiscal year that begins July 1.

Consumer spending in Colorado and nearby states slowed slightly in December from previous weeks, as did energy activity, but "manufacturing and other business activity increased slightly" over the period, the U.S. Federal Reserve Bank in Kansas City reported Jan. 15 in its latest regional "Beige Book" survey.

Overall, the region's economy "continued to grow slightly in December," and local business executives and economists expect "moderate growth over the coming months," the Fed report said.

The region's retail sales "declined from the previous survey and were lower than a year ago. Several retailers noted a drop in sales of high-end products, although sales of home improvement items were steady. Expectations for future sales moderated but remained positive, and inventory levels were expected to drop considerably."

Colorado, which does not issue general obligation debt, carries issuer credit ratings of AA by Standard & Poor's and Aa1 by Moody's Investors Service. Outlooks are stable.

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