Under the Dome: Is K-12 financing fair to anyone?
December 13, 2018
Amendment 73 failed at the ballot in November, despite a massive effort by administrators, teachers, and their supporters to increase school funding. Through the state budget, I've consistently supported more K12 funding and, specifically, higher pay for teachers, but I opposed the tax structure proposed in amendment 73, which would have unfairly focused higher taxes on business and further exacerbated the impact of the Gallagher Amendment on property tax adjustments.
There have been efforts to increase public school K12 funding through ballot initiatives in the past. There is also intense lobbying focused on the "negative factor" (now, officially, the "budget stabilization" or BS factor) to increase funding year-over-year through the state budget. While the ballot measures have failed, the state budget has prioritized K-12 funding, and the BS factor now stands at $672 million after peaking at more than $1 billion in 2014.
State funding for K-12 finance is forecast to increase by $248 million in the next budget. That adds up to $4.5 billion in the current year, for a total of $4.8 billion — which then adds to $2.6 billion of local property tax, for a total of $7.4 billion in total funding through the school finance formula.
But wait! Another $1.5 billion is raised through local mill levy overrides, and those don't often get counted.
There are ongoing efforts to "fix" school finance. A legislative interim committee has been ineffective, except to continue its own existence after two years of meetings. I'm convinced the underlying structural and constitutional distortions of the use of local property taxes are so severe and unfair that efforts to "fix the formula" are in vain. There are two pieces to the property tax chaos.
Local property tax mill levies contribute directly to the school finance within the formula by sharing the need for funding with the state general fund. Those taxes vary from about 2 mils to 27 mils, depending on the district. Homeowners with the same home value in different districts pay very different taxes to support their schools. The difference is the result of the interaction of the Gallagher Amendment, the Taxpayer Bill of Rights, and variations over time of assessed values in the district. This situation is unfair to taxpayers.
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And now comes local mill levy overrides. These are taxes voted on and passed locally to support schools over and above the formula allocation. Because school districts have very different asset values, the opportunity to raise funds is very different. At this point, the overrides amount to $1.5 billion per year and vary greatly across districts. The result is dramatically different funding and teacher pay across school districts. This situation is very unfair to students.
I believe the legislature needs to correct these basic problems and create a fair system before we ask taxpayers to spend more money on K-12. I'll be working with our JBC staff to propose solutions, and I'll ask my fellow members on the Joint Budget Committee to join me in legislation this year.
We also need a broad new vision of the state's future for education, from early childhood to retraining in the workplace. I'll cover that next month.
What do you think?
State Rep. Bob Rankin represents Colorado's House District 57 in the state legislature. He writes the monthly column “Under the Dome,” hoping to inform and engage the constituents in his district. He serves on the Joint Budget Committee and represents Garfield, Rio Blanco, and Moffat counties.