While the constitutional amendment would fund schools, it would have lasting impact on city, county funding
By Julia Rentsch
Data from the 2016 fiscal year, the latest available, show that nationwide, public school districts on average spend $11,762 per pupil, and Colorado schools spend on average $9,575 per pupil, according to the United States Census Bureau.
Initiative 73, formerly known as Initiative 93, seeks to increase the state government's contribution to Colorado public school districts by raising the income tax for those making greater than $150,000 per year in federal taxable income. If voters pass the initiative in November, changes will be written into the Colorado Constitution and the Colorado Revised Statutes without a sunset, or scheduled end.
Experts say the quality of a Colorado public school education could certainly increase with more school funding, but the amendment's additional impact on property tax collection makes the issue less straightforward.
Cathy Kipp, president of the Poudre School District Board of Education, and Steve Miller, Larimer County assessor, discussed the complexities of Amendment 73 Thursday in a public forum moderated by the League of Women Voters' Mary Dietrich. The following represents a summary of the forum, which sought to help voters understand why voting yes or no on 73 might be more complicated than it might initially seem.
What does Initiative 73 propose?
The measure seeks to raise $1.6 billion for Colorado schools annually.
Under the new amendment, those making between $150,000 and $200,000 annually would be subject to an additional 0.37 percent income tax for schools; those making $200,000 to $300,000, a 1.37 percent tax; from $300,000 to $500,000, 2.37 percent; and above $500,000, 3.62 percent, beginning Jan. 1. The corporate tax on any net income would be 1.37 percent.
Additionally, the amendment calls for all residential property to be assessed at 7 percent of its actual value, and non-residential property at 24 percent. These are reduced amounts from the current rates of 7.2 percent and 29 percent, respectively.
All of the funds would be held in and spent from a dedicated Quality Public Education Fund. Each district has discretion in how it wants to spend its own funds.
The money will be spent to increase the annual per pupil funding to no less than $7,300 in all schools statewide; to increase programs and funding for special education by at least $120 million, for gifted and talented programs by at least $10 million, for English proficiency by at least $20 million and for preschool by at least $10 million; to increase state funding to pupils eligible for free and reduced lunch; and to fund full-day kindergarten statewide.
How will this initiative benefit our local school districts?
Colorado ranks low, and sometimes last, in various measures of school funding compared to other states, and Colorado schools simply need more money, said Cathy Kipp, president of the Poudre School District Board of Education.
The lack of funds has led to larger class sizes and trouble finding teachers due to the inability to offer competitive salaries, Kipp said. And, these issues particularly affect poorer, rural Colorado school districts, which are most sorely in need of money, she said.
"Frankly, the only way we can get more school funding for our public schools in Colorado is to go this route, because of stuff that is already in the (state) Constitution," Kipp said, referring to the 1982 Gallagher Amendment and the 1992 Taxpayer's Bill of Rights, which both contain provisions that reduce the number of local dollars going into the state budget.
School funding calculations are complex, and from 2000 to 2010 the text of the state Constitution called for those calculations to depend on a variety of factors unique to each school district, such as size, area cost of living and the number of kids who qualify for free or reduced lunch. But, after the economy turned downward in 2008, the state Legislature reinterpreted the constitutional language in 2010, and to rebalance the state budget the General Assembly decided to reduce the state's share of total program funding for most school districts.
Reducing both local and state dollar contributions into the education budget means schools are losing out, Kipp said.
"We're not asking for back pay, but better pay," she said.
What happened to all the marijuana money?
Kipp said one of the questions she gets most often is, "What happened to all the pot money?" People are under the impression money from retail marijuana is helping schools buy textbooks and pay teachers, she said.
Most of the marijuana tax money funds a variety of state departments and programs related to health care and substance abuse prevention, some of which happens in schools, according to the fiscal year 2017-18 appropriations report prepared by the legislature's Joint Budget Committee.
Another portion of the total marijuana tax goes to the Public School Capital Construction Assistance Fund, which helps pay for local K-12 school construction projects. The construction assistance may be for a new roof, or to replace a boiler, but does not help with buying new textbooks or bettering curriculum, Kipp said.
"I really believe the voters were misled on the pot tax," Kipp said.
How will this new tax impact other taxes in the state?
A problem lies with how the amendment would affect the collection of property tax in perpetuity, said Steve Miller, Larimer County assessor.
"What Amendment 73 actually creates is a totally different property tax system just for school districts," Miller said Thursday. "I think if they stopped there (after the income tax), it would have been fine. It's still a big ask ... but they got into the property tax system."
When the Gallagher Amendment passed in 1982, it was meant to provide property tax relief to homeowners, Miller explained. The amendment fixed the non-residential property assessment rate at 29 percent and established a floating residential rate, with the intent of maintaining a constant statewide ratio in the total property taxes collected statewide: 55 percent nonresidential and 45 percent residential.
What the text of Amendment 73 failed to do was exempt itself from that "Gallagher ratio," Miller said. This failure means it is not clear whether school district mill levies will be the only property tax-funded areas affected by the amendment's assessment reduction, as many of the Amendment 73 materials claim.
Though schools use about half of all property taxes collected, the rest are split between counties, cities, water districts, fire districts and other governing structures. If the amendment passes, these entities would potentially see their funding reduced, Miller said.
The proposed fixed residential assessment rate for school districts also proves a problem as property values increase in certain parts of the state, but not others, Miller said.
"Our property values are going up, and our median value is over 400,000 (dollars)," Miller said of Fort Collins. "The problem with setting a statewide residential assessment rate is that we do OK here ... and there's extra money so the county and Poudre (School District) and Thompson (School District) can maintain their budgets. But, that's just not true in rural Colorado. It just isn't."
And, the fact that the measure is a constitutional change rather than a statutory change sets those issues in stone.
"We have a habit in Colorado of sticking stuff in the Constitution that doesn't belong there," Miller said.
Julia Rentsch: 970-699-5404, email@example.com
Initiative 73 Text by TimesCall on Scribd