As elected officials across Colorado struggle to avoid steep budget cuts to rural fire stations, libraries and other public services, one group is looking to short-term rentals such as Airbnbs for a possible solution.

Right now, those properties are valued and taxed as homes. But a draft bill awaiting approval from the Alternatives to the Gallagher Amendment Interim Study Committee would make owners pay commercial property tax rates for every short-term rental, which is defined as a property that’s available for rent for periods shorter than 30 days.

“We have people who don’t live in the area who own 10 or 15 condos,” said Beverly Breakstone, the assessor in Summit County, which is home to Breckenridge and other resort communities. “We’re thinking from the fairness point of view.”

Assessment rates are basically what portion of your property’s value can be taxed. A state constitutional amendment called Gallagher sets those rates, and in 2018 it was 7.2 percent for residential and 29 percent for commercial.

If the owner lives in part of the house, it would be taxed like a bed and breakfast, where the private parts of the home are assessed at the residential property tax rate. If the owner doesn’t live in the house, the whole house would be taxed like a commercial property.

The change would create more commercial property in the state, which means it would change how Gallagher is calculated and potentially reverse the trend of falling property taxes across rural Colorado.

In Summit County, where about one in five homes is used as a short-term rental, Legislative Council Staff estimated this could raise the amount of assessed value in the county by 63 percent. In Mineral County, the increase could be as high as 51 percent.

That’s a lot of extra potential dollars for counties staring down the barrel of a constitutional trigger that’s expected to cut residential property taxes by 15 percent in 2019.

“Here it makes a difference on whether the fire department is funded,” Mineral County Assessor Libby Lamb said.

Mineral County is in a sparsely populated part of southern Colorado. Nearly all of the county’s land is public and most of its private property is residential — making it a poster child for the challenge created by Gallagher.

The amendment states that no matter what happens to home values across Colorado, homeowners can’t pay more than 45 percent of the state’s total property tax bill. When the amendment passed, counties taxed homeowners on 21 percent of their home’s assessed value. Then home prices soared along the Front Range, and the state continually lowered the rate paid by homeowners to keep that 45-55 split.

Denver homeowners kept paying more in property taxes despite the lower rate, but rural Coloradans started to pay less because their homes’ values weren’t rising as fast.

And that’s the problem.

Rural communities across the state have seen the money they get to pay for firefighters, police and even the county clerk’s office wither as the assessment rate ratcheted down every two years. That has forced a variety of cost-cutting measures in small counties such as Las Animas, which shaved two days off its employees’ work week in January 2017.

“How to address the Gallagher problem is the most serious problem we have to address after the drought we’re experiencing in western Colorado and the wildfires,” Ouray County Commissioner Ben Tisdel told the interim committee earlier this month.

The short-term rental draft bill is one of eight proposed changes to Gallagher under review by the interim committee. One bill would repeal Gallagher altogether and another would divide the state into regions to stop home prices in Denver from lowering assessment rates in Trinidad.

Those two proposals are assessors Breakstone’s and Lamb’s preferred solutions to Gallagher because they’re straightforward to implement.

Although Breakstone thinks it would be more fair for rental owners to pay the commercial rate, she’s concerned about how to police the taxes of owners who occupy their property for part of the year or part of their property year-round.

That’s Lamb’s concern, too: “I’m a one-person office. I can’t go out and investigate this.”

A straight repeal is also the preference of state Sen. Jack Tate, R-Centennial, who sits on the interim committee.

“It’s a bill I’ll be carrying for sure,” Tate said.

He’s not so sure about the short-term rental question. He sees it as a big tax increase that wouldn’t solve the overall problem.

If any of the bills gets voted out of the interim committee on Oct. 3, they would likely be legislative referrals that go to the people for a vote. Even the short-term rental bill could require the state to ask voters whether counties could keep those extra dollars. Tate realizes that could be a tough sell to his constituents.

“There’s a perception that there’s not a problem statewide because on the Front Range it’s not a problem,” Tate said. “You judge things by what’s near you.”

Rep. Daneya Esgar, D-Pueblo, who chairs the interim committee, thinks it’s possible to repeal Gallagher if rural communities share their stories, but she is also open to the idea of statutory changes like reclassifying short-term rentals.

“You have some homes where people are never living in it,” Esgar said. “Where it gets wonky and tricky is how do you divide up the homes people live in without being unfair.”

She plans to wait and see whether the bill gets changed at the next committee meeting before deciding whether she’ll support it.