Feb 28, 2010 12:54 AM by Andy Koen

Why schools will lose money despite laws to protect it

Lawmakers will finalize some $240 million in cuts to K-12 education next week leaving local districts short on revenue for the 2010-2011 school year. 

In Hanover, near the El Paso/Pueblo county line, the school board has already voted to close one of its two elementary schools.

The District 11 school board in Colorado Springs will vote early next month on $11-16 million in cuts that could include layoffs, longer bus routes, and possibly the out-sourcing of school custodians.

Colorado schools have become increasingly dependent on the state for money.  Senator Abel Tapia, (D) Pueblo, who sits on the joint budget committee, says 43 cents of every tax dollar the state receives is spent on K-12 education.

That price, he says, has become to high for the state to pay.

"It has shifted to where the state has 75 percent of the burden and the local (school district) have 25 percent of the burden," Tapia said.

Amendment 23 mandates that the state increase school spending at the rate of inflation plus one percent.  Tapia says lawmakers are able to cut K-12 spending this year despite Amendment 23 because of the poor economy.

But he says the ratchet effect created by the requirements of the Gallagher and TABOR amendments will continue to leave the state paying a disproportionate share of school funding.

Gallagher stipulates that local governments collect property taxes at a ratio of 45 to 55 percent respectively from residential and commercial property owners, with the commercial rate capped at 29 percent.

The 45:55 was chosen because it reflected the existing make up of residential to commercial property ownership in 1982. 

As the number and value of residential properties grew in 1990's, city and county governments and local school boards all reduced their tax rates to maintain the Gallagher ratio.

TABOR requires tax increases to be approved by voters.  Consequently, the low rates have stayed in place even as property values (and tax collections) dropped.

"What is really affecting K-12 is the mill levy override and Gallagher," Tapia said.

As unpleasant as it sounds, Tapia believes that finding a long term solution for school funding will mean increasing property taxes either by mill levy overrides or by a statewide change to Gallagher.

"It really does appear as though it's going to be 5 years before we're back to a (funding) level of 2002 and those 5 years a very critical years and we cannot sacrifice our children for those five years."

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