Even though Gov. Bill Ritter’s “Children’s Amendment” was softened this past week, it still won’t sit well with many Coloradans. The proposed backdoor tax hike to fund new state education priorities simply does not pass close inspection.
The governor has said his amendment will boost early childhood education while also rescuing the state budget.
He can’t have it both ways. The proposal would add $84 million in state spending, mostly on new preschool and kindergarten programs. To help pay the bill, he wants to “freeze” mill levy rates. The revised plan would cut taxes in 33 of Colorado’s 178 school districts, but property owners in more than 100 districts will see tax increases of various amounts.
The backdoor tax hike would fall heavily on property owners in places like Grand Junction, Pagosa Springs and Englewood. The owner of a $100,000 home in parts of Alamosa County would pay $40 more for schools. Most significantly, residents in one Eastern Plains school district face a 63 percent increase on next year’s tax bill.
The mill levy rate “freeze” would bring in $55 million more in property taxes. The remaining $29 million would have to come from the current state budget. If the money isn’t available in the general treasury, lawmakers would have to raid the State Education Fund. Amendment 23 created the fund as a means to provide additional dollars to kindergarten-through-12th grade public schools.
However, the governor’s office has said the plan is necessary to save the State Education Fund from bankruptcy in four years. Paying out $29 million of state money on new programs wouldn’t solve the alleged problem. Even so, the bankruptcy projection is based on a worst-case scenario. A nonpartisan legislative staff report shows that Amendment 23’s school spending mandates are not expected to drain the fund.
Recent trends in public school finance also cannot justify raising the tax burden on property owners. Real property tax dollars per Colorado student grew 8.5 percent from 2001 to 2005. During the same four years, state school funding increased 15.6 percent per pupil.
Pueblo’s two school districts both have received large property tax gains. The Pueblo City Schools collected more than $19 million from residences and businesses in 2001, but nearly $29 million in 2005 with fewer students enrolled. Pueblo County District 70’s property tax revenues rose from $13.5 million to $18.6 million in the same period, a 12 percent increase per student after factoring out inflation.
Colorado K-12 school funding from all sources climbed 11.6 percent per pupil between 2001 and 2005. District 70’s total funding growth stood near the state average at 11.3 percent, while the Pueblo City Schools’ per pupil revenues increased 21.8 percent – nearly double the rate.
Yet if local school leaders believe a property tax increase is needed to fund more programs, they simply can ask their voters. The Taxpayers Bill of Rights in our state constitution says voter approval is needed for any “tax policy change directly causing a net tax revenue gain to any district.”
The Legislature’s legal analysts have argued Ritter’s proposal isn’t a new tax and may not increase tax revenue. Therefore, they say voters don’t have to be asked. Yet the rate “freeze” would change the law to raise many Coloradans’ tax bills. It’s designed to generate more tax revenue. It seems a clear violation of TABOR.
Voters want to be asked directly. And if they see most of the state’s schools already have been collecting more tax dollars per student, voters may not want to give their permission.
Originally appeared in the Pueblo Chieftain on April 15, 2007