Curry says change in school funding helped state programs

Mil levy freeze under fire around the state

Almost a year to the day since Representative Kathleen Curry and Colorado House Speaker Andrew Romanoff spoke in Gunnison about a bill that shifted more of the burden of paying for schools onto local taxpayers, Curry told the Crested Butte Town Council that the money is being well spent.

Curry visited the Town Council during its work session on Monday, June 16 and explained that money saved by the state due to provisions in Senate Bill 199—the annual school finance bill—in 2007 was being put to good use. “We took advantage of the monies coming in because of the mil levy freeze,” she said, noting that essential programs are starting to be restored. “We’re really playing catch-up on the budget.”
Specifically, Curry explained later, the funds have been spent to expand access to preschool and full-day kindergarten and better programs for disabled children. Other funds were spent on additional high school counselors, literacy programs, charter schools, and health care programs.
Governor Ritter and Romanoff pitched Senate Bill 199 as a way to shore up the state’s shrinking education fund by requiring local school districts to shoulder more of the burden of funding schools, as they have done in the past. The issue was born from a complicated tangle of laws dealing with state finance, including the Taxpayers Bill of Rights, also known as TABOR, which voters passed in 1992.
Two years later in 1994, voters passed a school equalization act that balanced funding among Colorado schools and required districts to give back funds that fell outside of the TABOR restrictions. However, many school districts then appealed to voters to allow them to keep the extra funding the districts were collecting. The Gunnison RE1J School District voters passed a similar measure in 1997. The state could have changed the rules for districts, but did not. Because the state didn’t act, counties were able to lower property taxes while the burden of funding K-12 education went to the state.
The result was the state spent more and more money on K-12 education and made substantial cuts in other parts of its budget—many of those in higher education.
By freezing the mil levy (the rate at which taxes are charged) for schools last year, the state required counties to depend on their own assessed property tax valuations to meet the per-pupil funding requirements. In school districts with a high property evaluation—like in Gunnison County—local taxpayers assumed most of the burden for funding schools.
In 2006-2007 the state paid the RE1J School District $2.1 million in equalization monies. The school district originally anticipated receiving $2.4 million in the 2007-2008 school year—that funding was made up primarily through increased property tax collections locally.
In total, it’s been estimated that the freeze saved $117 million this year for the state and might bring in nearly $3.8 billion over 10 years.
During Monday’s work session, Town Council member Skip Berkshire said increased property taxes around Crested Butte had hit the community hard. At the same time, Berkshire explained, the school district is now seeking a tax increase, via a mil levy question on November’s ballot, to build more classrooms in Crested Butte and update schools in Gunnison. Berkshire said the problem lies in the difference between property valuations in Crested Butte versus Gunnison. “It puts a disproportionate burden on some residents in this area,” he said.
Berkshire suggested the state accommodate a split mil levy that would allow one rate to apply in parts of the county, and another rate in others. If something didn’t change, he suggested school-funding measures would fail in the future. Curry said she would take the matter into consideration.
While local voters deal with the repercussions of the new funding scheme, a statewide battle over the measure is continuing.
On May 31, Denver district court judge Christina Habas ruled that the state’s mil levy freeze was unconstitutional because it represented a change in tax policy and therefore should be approved by voters under the TABOR amendment. The lawsuit was filed by the Conservative Independence Institute.
The lawsuit marks the latest attempt to turn over the mil levy freeze. Republican lawmakers tried during this session to repeal the freeze or refer it to voters. Those attempts were unsuccessful.
The governor has said the state will appeal the district court’s decision to the Colorado Supreme Court.