It is a crowded ballot for Coloradans this November, but only one Amendment directly changes how our public schools are funded and addresses years of funding shortfalls. Amendment 73, if passed next month by Colorado voters, seeks to provide “better and more equitable funding of public schools.”
How would school funding improve?
Amendment 73 seeks to raise $1.6 billion, which would finance the following increases to school funding:
- Increases base funding for all students. Currently the base funding for each student is $6769, and this initiative would increase the base to $7,300 to bring funding closer to the national average.
- Increases “at-risk” funding to include students qualifying for reduced price lunch. Currently this supplemental funding only applies to free lunch students.
- Significantly increases the amount of funds passing from the state to local districts for: Special Education, English Language Learners, and Gifted & Talented students.
- Provides funding for full-day kindergarten and increases revenue going to early childhood education funding.
Each school district would determine how the funds are best utilized to support the students in their communities.
How will these extra funds be raised?
The $1.6 billion increase to school funding would be financed through three changes to current tax rates:
•Amendment 73 would increase the state tax rate on “C” Corporations. Currently, out of the 44 states that levy taxes on corporations, Colorado’s rate of 4.63% is the third lowest. If the rate increases to 6% under this initiative, it will be the 9th lowest of these 44 states.
•Amendment 73 would implement a graduated income tax rate in Colorado. The income tax rate stays at its current level of 4.63% for income up to $150,000. Any filers with taxable income above this threshold will pay more with each level of income, as shown in the chart below. 92% of filers will have no impact on their individual income taxes.
Amendment 73 would also change the assessment rates levied by school districts through property taxes, which accounts for about half of our property tax bills. In order to provide sustainable support for schools, the measure would set residential assessment rates at 7% and lower non-residential (businesses, oil and gas, etc.) assessment rates from 29% to 24%. These rates would be frozen and could not drop further, thus stabilizing the local share of property taxes that school districts rely on for a percentage of their budget. One reason why Colorado has fallen so far behind the national average in per pupil funding is the continual drop in the residential property tax assessment rate, from 21% in the 1980s to 7.2% today. If Amendment 73 does not pass, this rate is projected to fall again to 6.1%, thus putting additional pressure on the state’s General Fund to backfill the difference. Currently Colorado’s funding per pupil is $2800 below the national average. To read more, see our previous post “Why Are Schools Always Asking for More Money?”