A Proposed Solution for CO’s School Funding Issues

In our last post, “Why Are Schools Always Asking for More Money?“, we highlighted the reasons why school funding in Colorado has fallen behind most other states.  Today we are sharing a possible solution proposed by a statewide grassroots effort, called Initiative #93, “Great Schools, Thriving Communities“.

This initiative seeks to provide “better and more equitable funding of public schools.”  Petitioning is underway to place the initiative on the ballot this fall, so that voters can decide whether to increase school funding across the state. Here is what Initiative 93 would do:

It creates a Quality Public Education Fund financed through a graduated income tax rate for taxpayers, and higher taxes 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 still be the 9th lowest of 44 states.

The majority of the revenue raised would be through higher taxes on taxpayer incomes above $150,000, calculated through a graduated tax rate.  92% of filers will have no impact on their individual income taxes.
Initiative 93 would also change the assessment rates levied by school districts through property taxes. First it seeks to provide sustainable support for schools by stabilizing property taxes, which would lower residential assessment rates from 7.2% to 7%, and lower non-residential (businesses, oil and gas, etc.) 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.

What is the increased funding to schools for?

The proposed tax changes are estimated 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 $6546, 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.

Initiative 93 is in the citizen-led petitioning phase required to be on the 2018 November ballot.  Let us know if you would like to sign a petition, carry your own petition for friends and neighbors to sign, or have more questions.

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Posted in Uncategorized

“Why Are Schools Always Asking for More Money?”

Almost every November, there is an education funding initiative on the ballot in Colorado.  Some are statewide initiatives, and many more are local school districts’ attempts to increase funding locally through property taxes, called mill levy overrides.

So why are they always asking?

  • Colorado, although it is one of the wealthier states in the country with a booming economy, does not fund its public schools as much as most other states.  In fact, the National Center for Education Statistics states that only nine states spend less per student than we do.  
  • Education Week gives Colorado a “D” score, ranking us 40th in the nation for school finance. 
  • Since Colorado passed the Gallagher Amendment in 1982, our residential property tax assessment rates have dropped ten times, from 21% to 7.2% of market value.  These reductions bring in less property tax revenue, which used to fund around 55% of our schools’ budgets. Today, local property taxes only cover about 36%.  That causes a bigger strain on our state budget, which is limited in growth by another constitutional amendment, called TABOR.
  • When the state budget was hit during the recession and cuts had to be made, the Colorado legislature introduced the Budget Stabilization Factor, formerly known as the Negative Factor.  This balancing tool cut funding to schools by hundreds of millions of dollars, starting in 2010. Even though we are now out of the recession, the “B.S. Factor” remains….to the tune of $822 million dollars less in funding than what schools would otherwise have.  And that’s just for this year. This reduction in funding has been in place for eight years now.

We know that Colorado funds its schools over $2,000 less per pupil than the United States average.  In response, many school districts have passed mill levy overrides (MLOs) in order to prevent cuts, retain teachers, and maintain educational programs, including the St. Vrain Valley School District.  But many Colorado districts are unable to pass an MLO. Another surprising fact: over 40% of Colorado’s school districts are now on a four day school week.

How can we solve this issue, and ensure that all of Colorado students have excellent educational opportunities, despite their zip code?  One group is working towards a solution that may be on our statewide ballot this fall, and it is the best proposed solution that Grassroots St. Vrain has seen to date.  It’s called Great Schools Thriving Communities, and we will be sharing more information about it in our next post.

Posted in Uncategorized

Gallagher Amendment requires property tax reduction

Earlier this year we shared the news that Colorado’s residential property tax assessment rate was going to drop.  This sounds like good news for homeowners, but it may come at a cost to our schools and state budget.

Since 2003 the assessment rate on residential property has remained at 7.96% of a home’s market value. In 2017, the assessment rate falls to 7.2%. So if your home is worth $100,000, then you will be taxed on $7200 (the assessed value), which is then multiplied by the mills in your area to determine the taxes due.

The reason for the cut is the Gallagher Amendment.  Back in 1982, Coloradoans were concerned about rising property taxes due to the increasing value of homes.  The Gallagher Amendment was passed to lock in the ratio at that time of residential to non residential property tax collections:  45% of total statewide assessed values must come from residential properties, with the remaining 55% coming from commercial, industrial, and oil and gas properties.  The non residential property assessment rate has remained unchanged at 29%.  In 1983, the residential assessment rate was 21%.  Over the years residential properties have increased in value much faster than commercial properties, and since the residential percentage of total assessments must stay at 45%…..the assessment rate has now been cut ten times.

assessment-rate-graph

These rates cannot go back up in changing economic environments without voter approval, as legislated by TABOR, the Taxpayer Bill of Rights.  Historically, once a tax rate has been lowered, it stays there.

The driver behind the decrease is the urban corridor, where property values have increased at a much faster rate than the rest of the state. In these districts the lower assessment rate will be offset by rising home values, but in rural districts without as much appreciation in home values, the lowered rate will result in lower tax collections and will squeeze school budgets. Unfortunately this outcome widens the funding divide between school districts based on their location in the state.

Our tangled constitutional structure further complicates matters.  By law, the state government must backfill the difference between the total funding determined by the school finance formula and what local taxes provide.  So if residential property tax collections go down, the state must come up with the extra funding to meet the school finance formula requirements.

To learn more about the tangle between Gallagher and TABOR, check out this video from the Colorado Fiscal Institute.

Posted in Uncategorized

Funding Charter Schools: New Rules

Charter schools, like all public schools in Colorado, are funded by the School Finance Act based on their October student count.   Up until now, our state did not require that school districts share any proceeds of additional local tax initiatives, or mill levy overrides, with their charter schools.  Practices vary across the state, but currently eleven school districts equitably share voter approved revenue with their charter schools, according to the Colorado League of Charter Schools, and some do not share their MLO proceeds at all.

The St. Vrain Valley School District is already sharing proceeds from both of its mill levy overrides (MLOs) with charter schools based on charter school enrollment in the years the MLOs were passed by voters.  New legislation passed at the Capitol on this issue, House Bill 1375, requires that all school districts equitably share this revenue.  School districts can either:

  • adopt a plan for distributing the revenue to the schools of the school district for the benefit of the students enrolled in the school district; or
  • distribute 95% of the per pupil amount of the revenue to the innovation schools and charter schools of the school district (per pupil distribution).

The St. Vrain Valley School District must make this determination and post the decision on its website by July 2018.  This change takes effect beginning with the 2019-2020 school year.  What does this mean for charter schools in the St. Vrain Valley School District?   It depends on the school.   As student population at each charter school grows or shrinks, that school may receive more or less funding from the MLO based on its enrollment each year…instead of the percentage of the SVVSD student population at the time the MLO was passed, as is the practice now.

Posted in 2012 Mill Levy Override, School Finance

What Is The Negative Factor? (aka the Budget Stabilization Factor)

As legislators work on the state budget, a term we always hear when they are determining school funding is the “Negative Factor.”  It is a provision in state law that reduces the amount of total program funding and state aid provided to K-12 school districts.  It acts as a balancing tool for the Legislature, while still abiding by the state requirement of increasing funding by inflation each year.   To explain, let’s review the state per pupil funding formula:

Each district receives “base” per pupil funding (the same for every student in Colorado), plus “factors”, or adjustments for differences between school districts for things like district size, number of at-risk students, and cost of living/personnel costs.  

The state is required by law to increase the base per pupil spending by inflation plus growth each year.  

 

While the state must grow the “base” each year by inflation plus growth, that rule does not apply to the “factors”.  The Negative Factor reduces the factors funding.  

Although overall K-12 funding will increase over last year, the Negative Factor prevents this funding from keeping pace with inflation.

 

According to the Colorado Fiscal Institute, “our schools are currently receiving $831 million below inflation increases since 2009….If per-student support for schools had kept pace with inflation since 2009, schools would be getting $1,007 more per student in 2017-18.”  

The graph below shows how far per pupil funding has fallen below inflation since the introduction of the Negative Factor in 2009. The cumulative impact of the Negative Factor to SVVSD totals $167.3 million.  The blue and green bars represent actual funding, while the red bars show what schools would have received before the Negative Factor was applied.

avg-ppf-and-negative-factor-01

Posted in Uncategorized

Your Chance to Weigh In on Legislation

Currently in our country, citizens are increasingly paying attention to our political landscape.  As policy changes loom, many are asking how their voice or opinion can be heard.  That opportunity exists in Colorado on new bills that are introduced in our state legislature.

You, as a citizen of Colorado, have the right to attend committee meetings and voice your support for or opposition to bills when they are being considered.

GSV watches bills that affect education funding.  Here are the current bills under consideration, a brief synopsis of each, and the link to the bill in the Colorado Legislature.  Use the link to view the bill as written, its progress through the legislature, and dates it will be heard on the floor or in committee.  And, if you decide to attend one of these hearings, let us know!   We may join you there.

  • Senate Bill 17-061, Additional Funding for Charter School Operating Costs: This bill would require school districts to distribute revenues it receives from ongoing local property tax mill levies overrides equally, on a per-student basis, to the school district charter schools. For more information see Senate Bill 17-061
  • House Bill 17-1187, Change Excess State Revenues Cap Growth Factor:  This bill would modify the excess state revenues cap, currently defined by TABOR and Referendum C, by allowing an annual adjustment for an increase based on the average annual change of Colorado personal income over the last 5 years, rather than adjusting for inflation and population growth. For more information see House Bill 17-1187

This document from the Colorado Legislative Council explains How Bills Become Law in Colorado.

Upcoming Town Hall Meetings:

  • March 12, 2017 2:30 – 4:00 pm Congressman Polis, Broomfield High School, 1 Eagle Way, Broomfield, CO 80020
  • March 15, 2017  6:00 – 8:00 pm Senator Fenberg, Representative Hooton, and Representative Becker, Sanitas Brewing Company; 3550 Frontier Ave, Boulder, CO 80301
  • March 20, 2017 6:00 – 8:00 pm Senator Jones, Representative Singer, and Representative Foote, Trail Ridge Middle School, 1000 Button Rock Dr, Longmont, CO 80504
  • April 9, 2017 2:00 – 5:00 pm Congressman Polis, Senator Fenberg, and Representative Singer, Wildflower Pavilion on the Planet Bluegrass Ranch, 500 West Main Street, Lyons
Posted in Legislative Outreach, School Finance

Funding Charter Schools: Change Ahead?

Charter schools, like all public schools in Colorado, are funded by the School Finance Act based on their October student count.   Our state does not currently require that school districts share any proceeds of additional local tax initiatives, or mill levy overrides, with their charter schools.  Practices vary across the state, but currently eleven school districts equitably share voter approved revenue with their charter schools, according to the Colorado League of Charter Schools.  The St. Vrain Valley School District is already sharing proceeds from both of its mill levy overrides (MLOs) with charter schools based on charter school enrollment in the years the MLOs were passed by voters.

New legislation being debated at the Capitol on this issue, Senate Bill 61, proposes that all school districts equitably share this revenue with charter schools based on per pupil enrollment.  If passed, what would this mean for the St. Vrain Valley School District?   It depends on the school.  As currently written, the law would require that revenue received from MLOs each year be shared with charter schools according to each school’s funded pupil count for that year.  For example, if a charter school enrolls 2% of the school district’s students in a given year, it would receive 2% of the MLO proceeds for that same year.  As student population at each charter school grows or shrinks, that school would receive more or less funding from the MLO based on its enrollment each year…instead of the percentage of the SVVSD student population at the time the MLO was passed, as is the practice now.

Posted in 2012 Mill Levy Override, School Finance

The next wave to rock the school funding boat: the Gallagher Amendment

Last month the Denver Post reported that our residential property tax rate will go down next year.  This sounds like good news for homeowners, but it will come at a cost to our schools and state budget.

Colorado’s Department of Local Affairs is projecting a decrease in the residential property assessment rate.  Currently the rate is 7.96% of a home’s market value, which has remained unchanged since 2003.  For next year, the assessment rate is projected to fall to 6.56%.

The reason for the cut is the Gallagher Amendment.  Back in 1982, Coloradans were concerned about rising property taxes due to the increasing value of homes.  The Gallagher Amendment was passed to lock in the ratio at that time of residential to commercial property tax collections:  45% of total statewide assessed values come from residential properties, with the remaining 55% coming from commercial properties.  The commercial property assessment rate has remained unchanged at 29%.  In 1983, the residential assessment rate was 21%.  Over the years residential properties have increased in value much faster than commercial properties, and since the residential percentage of total assessments must stay at 45%…..the assessment rate has been cut nine times.

assessment-rate-graph

These rates cannot go back up in changing economic environments without voter approval, as legislated by TABOR, the Taxpayer Bill of Rights.  Historically, once a tax rate has been lowered, it stays there.

Our tangled constitutional structure further complicates matters.  By law, the state government must backfill the difference between the total funding determined by the school finance formula and what local taxes provide.  So as residential property taxes go down, the state must come up with the extra funding to meet the school finance formula requirements.

Next year the decrease in the property tax assessment rate  is projected to cut $170 million in local funding to schools.  By law, the state must assume this burden and kick in the difference.  With growth in the state budget limited by TABOR, our Legislature will have tough decisions on which services to cut to make up for the shortfall.  One of these cuts may be to increase the Negative Factor, which would cause school funding to lag even further behind inflation.

To learn more about the tangle between Gallagher and TABOR, check out this video from the Colorado Fiscal Institute.

 

 

 

 

 

 

 

Posted in School Finance

Governor Proposes Cuts to K-12 Funding

 

mlobond2016 had a record number of local school funding measures on the ballot. We are fortunate that 3A, the bond supporting school buildings, passed in the St. Vrain Valley, but many Colorado school districts, including our neighbors to the north, did not receive the same voter support.  Funding inequities between school districts will continue to grow, and this is exactly why we keep an eye on what is happening to education funding at the state level–where this issue must ultimately be addressed.

budget-with-seal-paper-01Looking ahead, Governor Hickenlooper has proposed his Colorado state budget for fiscal year 2017-18.  Due to expected revenues not keeping pace with spending requirements, he is proposing funding cuts not only to higher education and roads, but to K-12 education as well.  The Negative Factor under his proposal will increase by $46 million.  See our separate post for an explanation of what this means for school funding.

great-edGreat Education Colorado is a statewide organization that, like Grassroots St. Vrain, educates and advocates for funding in our public schools. GSV has partnered with Great Education since 2010 and encourages you to sign up to receive their communications on statewide actions impacting education funding.

Posted in School Finance

Do you have a new state senator or representative?

building-capitol-01Grassroots St. Vrain will be meeting with the new and returning legislators in the coming weeks, and will be watching education funding related issues as they come up in the Legislature.  Decisions made at the state level impact students in our classrooms.  If you are interested in participating in the GSV meetings with legislators or joining us at the Capitol, please contact us at info@grassrootsstvrain.org.

Read more about each legislator and see which SVVSD schools fall within their boundaries.

Senators

  • Stephen Fenberg (D) newly elected
  • Matt Jones (D)
  • Vicki Marble (R)

Representatives

  • Mike Foote (D)
  • Matt Gray (D) newly elected
  • Edie Hooton (D) newly elected
  • Lori Saine (R)
  • Jonathan Singer (D)
Posted in School Finance