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Bill seeks school funding

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Monday, May 2, 2011 11:28 PM

DENVER — One thing has become apparent to both Republicans and Democrats in the state Legislature this year: Public schools can no longer count on the state to pay the bills.

Schools are reeling from a budget cut that could reach $225 million next year, depending on how slowly the economy recovers.

But the crisis has been in the making for two decades, ever since the state began to take on more and more of the burden of paying for local schools.

One Republican senator wants to shift the burden back to local property taxpayers.

Sen. Keith King, R-Colorado Springs, wrote a short-lived bill to help local school districts convince their voters to raise property taxes. The bill died Thursday, but King has proven to be a master of turning today’s rejected ideas into tomorrow’s laws.

“I’ve already filed a bill title for next year. I’m not going to give up the fight,” King said. “This is the morally right thing to do.”

King, a former teacher and charter school leader, came up with a legal theory that the state could cut the budget for K-12 schools, even though voters mandated increased spending through Amendment 23.

Democrats rejected the idea earlier this decade, but when the recession hit hard two years ago, then-Gov. Bill Ritter dusted off King’s idea and used it to justify cuts to the school budget. This year, legislators made it a permanent part of the school finance law.

Now King has set his sights on the decreasing amount local taxpayers send to their schools. Leading Democrats agree that it’s a problem.

By 2025, the state will pay 70 percent of the costs of local schools, according to a University of Denver study. At that point, K-12 schools and prisons will eat the whole state budget.

“It’ll consume the general fund in its entirety,” King said.

Twenty years ago, the state paid a little more than half the cost of public schools.

The problem’s cause is complicated. A section of the constitution called the Gallagher Amendment keeps residential taxes low. Before Gallagher passed, homeowners paid taxes on 21 percent of the value of their homes. Today, they pay on just 8 percent.

Property taxes in Colorado’s largest counties are about half the national rate, according to the Tax Foundation.

Also, local voters often don’t want to approve property tax increases.

“We’ve got to find a way to incentivize local people to support their school districts,” King said.

His Senate Bill 259 would have given local schools an extra $300 per student if their voters approved a property tax increase. That way, voters could have been assured they were paying for their own kids’ schools, instead of pouring money into a statewide pot, King said.

If every school district won a tax increase election, the bill would have drawn an extra $240 million from local taxpayers and $50 million from the state — a first step in shifting the responsibility for schools back to local people.

Critics said the idea would have enlarged the gap between rich districts with generous taxpayers and those with small tax bases.

But Sen. Bob Bacon, D-Fort Collins, said any idea that brings more money to schools is worth exploring.

“I know that it’s going to create disparity, but more dollars for more kids is better than fewer dollars for more kids,” Bacon said.

However, King’s bill died on a 3-4 vote in the Senate Education Committee. A co-sponsor, Sen. Evie Hudak, D-Westminster, voted no after the teachers’ union lobbied against it.

King also drew opposition from an anti-tax Republican and two other Democrats, including Sen. Rollie Heath of Boulder.

“To me, this only moves the deck chairs on the Titanic around. We’re not getting at the problem,” said Heath, who is sponsoring a ballot initiative to repeal tax cuts from a decade ago.

Heath’s plan would set income tax rates at 5 percent and sales taxes at 3 percent, giving the state extra money for schools and other expenses.

Other education groups also lobbied against the bill.

“You have articulated in this bill the right idea, but the end of the year is the wrong time,” said Jane Urschel of the Colorado Association of School Boards.

Despite the loss, King was happy about the way his bill turned some heads at the Capitol.

“Even the lobby who opposed the bill said this is the most creative idea they’ve seen in years,” King said.



Reach Joe Hanel at joeh@cortezjournal.com.

Tax rates

Homeowners in Colorado’s biggest counties pay far lower property tax bills than the U.S. average, according to a Tax Foundation study of rates in 2009.
Annual property taxes as a percent of a home’s assessed value follow:
U.S. average — 1.04 percent.
Adams County — 0.83 percent.
Douglas County — 0.77 percent.
Jefferson County — 0.70 percent.
Araphahoe County — 0.68 percent.
Boulder County — 0.59 percent.
Denver County — 0.54 percent.
El Paso County — 0.47 percent.
Mesa County — 0.46 percent.
Source: Tax Foundation

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