Colorado school districts could be bringing a piece of school funding legislation to Novemberís ballot for a vote by the community. Craig Harper, budget analyst for the Joint Budget Committee of the Colorado General Assembly, said the legislation would reform the Colorado property tax system to further support education.Brett Ridgway, chief business officer for El Paso County Colorado School District 49, has been integral in creating the legislation. He said to make an informed decision about these issues, the community needs to understand the sources of a school districtís property tax revenue.ìEach school district has a total program levy, which has been a fixed amount for most school districts for nearly 20 years,î he said. ìThe Legislature froze all those total program levies in 2007. The other source is a group of levies like override levies and bonds. The community has full discretion and authority over those; and, without the communityís approval in a vote, that group of levies does not happen.îThe total program levy for each school district varies across the state from a high of 27 mills to a low of 1.68 mills, with 39 districts at the 27 mills mark, Ridgway said. That results in a huge disparity in the taxpayer experience, he said.According to the website http://chalkbeat.org, ìFor one mill, $1 is charged per $1,000 of assessed value. In a district charging 20 mills, $20 would be charged per [$]1,000.îAn example of that disparity can be seen by comparing Ellicott School District 22 and Hanover School District 28, Ridgway said. The two districts share a boundary but Ellicott residents pay 27 mills while Hanover residents have been paying 8 mills for many years, he said.Harper said in that instance, if a house in Ellicott was valued at $100,000 and another identical house in Hanover was valued at the same amount, the Ellicott resident would pay more than three times what the Hanover resident pays.Another way to look at the concept is to compare Aspen, a high property wealth district, to the two school districts in Pueblo, which are both fairly low property wealth districts, he said. To fully fund the districtís educational program, Aspen residents pay 4 mills and receive about 30 percent of their budget from the state, Harper said.ìBoth Pueblo school districts are at 27 mills,î he said. ìThey both get about 79 percent of their budget from the state, but they are paying more than six times the tax rate that Aspen is paying because they just simply do not have the tax base to cover their budgetary needs.îUniform mill levyLegislation that would address that disparity is the implementation of a uniform mill levy, Harper said.ìBy moving to a uniform mill levy, the proposal would implement an intentional system to treat identical taxpayers, in this case measure by property value, in districts receiving state share identically,î he saidHowever, if a school districtís educational program was fully funded at an amount lower than the uniform mill levy amount ñ like in Aspenís case ñ the mill levy would not change, Harper said.Ridgway said since so many school districts are already at or close to 27 mills, it makes sense to progressively move every district to either 27 mills or whatever amount would fully fund their educational program, whichever mill amount was lower.By passing this legislation, a segment of the state contribution to a fully-funded district could be recaptured and redistributed to districts that need the funding, he said. ìSince the state would not have to pay as much to the districts that have low mill levies, that money could go to the districts that need it,î Ridgway said.Override equalizationThe second part of the legislation, known as an override equalization, would provide a state matching funds for mill levy override revenue raised in a district with lower property wealth values; thereby, increasing equity in mill levy overrides for those lower-property-wealth districts, Harper said.ìHigh-property wealth district are much more able, and likely, to support their students with overrides,î Ridgway said. ìFor example, 94 percent of high property wealth districts have an override, and they (the overrides) average $1,921.60 per pupil which they gain from (an override of) 2.617 mills, while only 49 percent of low property wealth districts have an override. And they (the overrides) average only $914.25 per pupil which they gain from (an override of) 12.7 mills.îTo be eligible to receive the state matching funds outlined under the override equalization part of the legislation, residents must agree to the uniform mill levy piece, which in some cases will result in an increase in property taxes, Ridgway said.Because of the Taxpayer Bill of Rights, a tax increase must be approved by voters, and increasing a districtís mill levy rate constitutes a tax increase, he said. However, the benefits outweigh the cost, which is illustrated in how D 49 would fare with the new legislation in place, Ridgway said.By bringing D 49ís mill rate up from 24.459 mills to 27 mills, which results in an increase of about $18 per $100,000 in assessed property value, the district would be eligible to receive $28.4 million from the override equalization, he said. Ultimately, if the D 49 resident invests a combined $2.7 million, the state of Colorado would give back $28.4 million to the district, Ridgway said.Buying down the negative factorAnother benefit to the proposed legislation is a ìbuying downî of the negative factor, Ridgway said.According to the GreatEducation Colorado website, Amendment 23 was passed in 2000 and mandates that ìbaseî per-pupil funding increase each year by the rate of inflation. To determine that increase amount, each districtís base is run through a formula that includes variables like school district size, number of ìat-riskî kids and local cost-of-living, the website states. Those variables ó or ìfactorsî ó can substantially increase the average per pupil funding received by a school district.However, the website states: ìIn 2009, the Legislature reinterpreted Amendment 23 to mean that only the base amount was covered by the mandatory increases ñ- not the factors. Under this interpretation, the Legislature could (and did) cut total spending from one year to the next and claim compliance with Amendment 23.îAlso, to make cuts from all districts, the Legislature added a ìbudget stabilizationî or ìnegative factorî to the formula that determines per pupil funding. ìIn effect, the Legislature now decides how much it wants to spend on school finance, and then adjusts the negative factor to meet that funding target.îThe proposed legislationís ìbuying downî of the negative factor ultimately results in additional state funds for each district in recognition of the amount of increased per pupil funding it should have received under Amendment 23, Ridgway said.ìFor D 49, the budget stabilization or negative factor buydown would result in an additional $9.3 million or an increase of $1,416.14 per student,î he said. The overall amount the district would receive from investing $2.7 million in additional property taxes is $35 million per year, Ridgway said.A district like Ellicott would receive $392.4 million from the negative factor buydown without having to raise taxes ñ- since they are already at 27 mills ñ- if the legislation passes, he said.The bottom line: ìEveryone is going to get something from this,î Ridgway said. ìIt just depends on how much the taxpayers contribute to that.îThe legislation should be introduced before the end of the first quarter; and, if it passes, implementation would take place in 2022, Ridgway said.
