Taylor, White disagree about education tax law

Al White supports a new tax law that will boost local funding for school districts across Colorado even though that position places him at odds with many in his Republican Party.

"Most of my party is not on the Joint Budget Committee," White said Saturday in Steamboat Springs.

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White is a Winter Park resident who has represented Northwest Colorado at the Capitol for seven years. He recently ended his first year as one of two Republicans on the state's powerful, six-member Joint Budget Committee, which oversees Colorado's finances. White said serving on the committee gave him a firsthand look at a dire financial forecast for K-12 education in Colorado. As a result, White disagrees with state Republican leadership about one of the hottest topics to come out of the 2007 legislative session -- the School Finance Act recently signed into law by Gov. Bill Ritter, a Democrat.

The act also is known as Senate Bill 199. It will use property taxes to help untie a knot of state education laws that has led to increasingly more state funding, and less local funding, for K-12 education each year. Supporters of the School Finance Act say the trend has created a strain on Colorado's general fund and resulted in less local control of money for schools.

The act will "freeze" school-related property taxes at current rates and end reductions of those taxes, mandated by a 1994 law. Ritter spokesman Evan Dreyer says freezing the tax rate will generate $55 million in 2008.

White said the act will bring $274,000 to Moffat County schools in its first year, and $370,000 in the following year, bringing the county "up to 95 percent of the statewide average."

"They will never drop below that again," White said, adding that the funds will help prevent reductions of educational services, and resulting impacts such as larger class sizes, in Moffat County.

"We've got to do something," White said about K-12 funding in Colorado. "I don't know what other solution is out there. This is a solution that will slow the shift to state funding for local school districts."

The Steamboat Springs School District will not see a financial increase. Rather, local taxpayers will fund more of the district's budget and state funding will decrease.

"I don't think it will really boost our funds at all," said Dale Mellor, director of finance for the Steamboat district. "But we'll be able to fund our own programs (with more local property tax dollars), and we'll get less money from the state. I don't think it will net us any more money, but it will give us more local control."

Colorado's 178 school districts are funded by a combination of property tax dollars and state funds. How much state funding each district receives is determined by the state's finance formula, which accounts for numerous factors such as cost of living.

Mellor said Steamboat's rising property values are driving up the cost-of-living factor for Steamboat's school district. But because there are statutory limits to how much tax revenue the school district can generate locally, the state has had to give Steamboat schools an increasing amount of funds in order to meet the amount required by the finance formula.

Mellor said about 10 years ago, state contributions to the Steamboat Springs School District were as low as $25.

"Now it's about $1.5 million," Mellor said. "It has really jumped up in the last couple of years."

Mellor said Moffat County schools, conversely, receive "the bare minimum" of state funding, possibly due to a much lower cost of living than Steamboat. That leads to a greater reliance on local property taxes in Moffat County -- and therefore a greater gain from the School Finance Act.

Mellor said that about 10 years ago, the total school-related property tax rate in Steamboat was more than 40 mills.

Now, Mellor said, the total rate is slightly more than 20 mills.

To assess a property tax, the value of a property is multiplied by the mill rate and then divided by 1,000.

"It's gone down by more than half," Mellor said of school-related property taxes.

Those reductions will now end.

State Sen. Jack Taylor, R-Steamboat Springs, said the School Finance Act will cost Colorado taxpayers $1.74 billion over 10 years, a position shared by House Minority Leader Mike May, a Republican state representative from Parker.

"That's a lot of money, and we couldn't get an answer as to where the money is going to get spent," Taylor said. "I think it's a tax increase, and I think the general public has a right to know that we as Republicans could not get that answer."

White said Republican opposition to the act did not sway his votes.

"This is not about partisanship, this is about the issue," he said.

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