When Daphne Greenwood, director of the Center for Colorado Policy Studies, began exploring school funding and growth in Colorado, she was looking for an example close to home, a textbook case in which rapid development failed to provide the tax resources for funding schools. She chose Falcon.Private donors and sponsors fund the center, which is housed on campus at the University of Colorado at Colorado Springs. Greenwood founded the center in 2001 to study how economic issues affect public policy. She holds a doctorate in economics and has taught at UCCS for more than 25 years. Prior to moving to Colorado, she was a corporate economist for a Chicago company and a visiting scholar in the Office of Tax Analysis at the U.S. Treasury Department.But it was during her two terms as a representative in the Colorado State Legislature, from 1991 to 1994, that she began thinking of starting a research center. “I found that there were so many legislators and certainly so many citizens who didn’t know the basics of economics and how to apply them to decision-making,” Greenwood said. When she returned to UCCS, she convinced her colleagues of the need for an objective voice on Colorado policy issues.”Our agenda is better data and better analysis,” Greenwood said. “Beyond that, we don’t have an agenda.”Greenwood was in the Legislature when the TABOR amendment passed in 1992, and she was interested in how Colorado tax policy affected growth. “As growth became a big issue in Colorado, I really started thinking about the relationship between the two,” she said. “Some of the things that we say we don’t like on the growth side are logical results of our tax policy encouraging people to do certain things.”In 2001, Greenwood wrote an editorial for the “perspective” section of the Denver Post, “A Fiscal Tug-of-War: Smart Growth and Colorado Tax Policies.” State tax policy is set not only by TABOR but also by the 1982 Gallagher amendment to the state constitution, which requires that residential property owners pay no more than 45 percent of the statewide total property tax. “Since total residential property value increased much more rapidly than commercial and agricultural property value during the last two decades, the assessment rate on residences has fallen from 21 percent to 9.74 percent,” Greenwood stated in the article. “The TABOR limit on revenue collection for cities and counties favors annexations and new construction.”From this editorial, the path of Greenwood’s research led directly to Falcon. The center’s 2003 study, “Paying for Schools: Does Smart Growth Matter?” focused on Falcon’s schools. “D 49 is a classic example of heavily residential development having trouble funding needed services from a limited property tax base,” according to the report. The availability of middle-income homes brings a high proportion of young families with children. “But a lack of infrastructure, including schools, is a major contributor to the lower land prices. Over time, substantial new property taxes on residents will be requested to pay for public investments in roads, drainage, water supply and schools.”Greenwood sees these problems as caused in part by a failure in planning at both the city and county level. “They haven’t thought about how the way that they zone and permit development to occur is going to impact the school district,” she said. Without a good mix of residential and commercial development, homeowners end up shouldering more of the tax burden for the infrastructure. For instance, the center’s 2003 report found that Colorado Springs District 11 raises 43.6 percent of its total taxes from residential property, while D 49 raises 63 percent from residences.Families are attracted to the new housing in the Falcon area because it is affordable. “But what you really want is an affordable lifestyle,” Greenwood said. “If housing was affordable but now your taxes are a lot more, and you had to commute longer distances, that’s why people end up angry and frustrated. Their lifestyle is no longer affordable. They thought that’s what they were getting, but they were just zeroing in on the price of the house.”Greenwood believes that the mission of the center is to make the connection between policy issues and basic economic principles. “I think there’s an information problem,” she said. “We’re all big on that in economics: Competitive markets don’t work well unless people have good information. And the center has definitely gotten some new ways of looking at things out there.”The Center for Colorado Policy Studies has a wealth of information on its Web site (http://web.uccs.edu/ccps), sponsors a yearly “Colorado’s Future” conference and funds a graduate-level internship in public policy.
