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Lawmakers hold out olive branch for 2015 finance debate

Nobody knows yet who’ll be in control of the 2015 Colorado legislature, but two key Democratic lawmakers are already reaching out to school superintendents, inviting them to work together on school finance issues.

The letter sent to district leaders Tuesday can be seen as a gesture to avoid some of the acrimony and bruising lobbying that marked the school finance debate during the 2014 session. (See the full letter at the bottom of this story.)

“We are asking you to work together with the legislature for both short and long term strategies to fund education,” wrote Rep. Millie Hamner of Dillon and Sen. Andy Kerr of Lakewood. They are the chairs of the House and Senate education committees.

“It is imperative that we work together,” the letter said.

“I don’t know that we expected it, but we saw it as an opportunity,” said Boulder Superintendent Bruce Messinger, who’s been a leader in the superintendents’ funding push. As it happened, the influential Denver Area Superintendents’ Council met Thursday, and the letter was discussed.

“We took it as a hopeful sign that they are both sincere and interested,” Messinger said.

A Western Slope superintendent, Jason Glass of Eagle County, agreed, saying, “I think superintendents appreciate this proactive effort … to work with Colorado’s school leaders.”

Hamner and Kerr both are up for re-election in the Nov. 4 election. Hamner faces an opponent she’s beaten before and is considered likely to return to the Capitol. Kerr is in a close, contentious and high-spending race. Republicans are pushing hard to win a Senate majority, so even if Kerr wins, he’ll lose his chairmanship if the GOP takes control.

School boards and district superintendents aggressively took the initiative during the 2014 session, pushing very hard to reduce the “negative factor,” the $1 billion shortfall in K-12 spending caused by the legislature’s narrow interpretation of school funding requirements.

Some lawmakers were caught off-balance by the lobbying push, and both Gov. John Hickenlooper and Democratic House Speaker Mark Ferrandino initially opposed any cut.

Sen. Andy Kerr, D-Lakewood / File photo
Sen. Andy Kerr, D-Lakewood / File photo

Hamner and Kerr at times were caught in the middle of the fight, which finally ended with a $110 million cut in the negative factor as well as funding of some education initiatives that Hickenlooper wanted. Hamner mentioned more than once last spring how stressful the experience was. (Refresh your memory about the battle with this Chalkbeat Colorado story from last March, and get the details of how it all turned out in this article.)

In an email response to questions about this week’s letter, Hamner praised the superintendents’ involvement last winter but said she wants to do things differently next year.

Rep. Millie Hamner, D-Dillon / File photo
Rep. Millie Hamner, D-Dillon / File photo

“While I fully support their decision to get more involved and to fight for funding, I believe the process can and should work better if we work together,” she wrote.

The Hamner-Kerr letter said, “With the goal of making this collaboration as effective as possible, we will be inviting you to a series of meetings we plan on hosting to discuss these matters further.”

Hamner told Chalkbeat, “I’m not certain at this time how this collaborative approach will look, but I believe that a representative group of superintendents and CFOs [chief financial officers] who are willing to work with us in studying the opportunities and challenges within our state budget could play an important role in shaping improvements to school funding in this next session.”

Unknows loom over finance issue

There are some key uncertainties that could affect 2015 school finance debates and attempts to further trim the negative factor.

The most immediate is the election. Defeat of Hickenlooper by GOP candidate Bob Beauprez and Republican takeover of one or both legislative houses could dramatically change the playing field. (Most observers expect Democrats to retain House control, however.)

A new financial factor – the possibility that state will have to pay tax refunds under the terms of the Taxpayer’s Bill of Rights – could make it harder for lawmakers to increase school funding significantly. (Get details in this story.)

And a recent lawsuit, filed by a group of parents and districts, challenges the constitutionality of the negative factor and is pending in Denver District Court (details on that here).

“We understand there’s a lot in play right now,” Messigner said, adding that school finance remains the top priority for superintendents.

Petition Time

Try, try again: Latest attempt at school funding measure would raise $1.6 billion with income, corporate tax increases

Colorado voters could see a $1.6 billion tax increase for education on their November ballots.

Backers of a major school funding measure have been cleared to gather signatures by the Colorado Secretary of State’s Office. The measure – going by Great Schools, Thriving Communities – would increase the corporate tax rate and increase income taxes for people who earn more than $150,000 a year, as well as change how residential property is taxed for schools.

“Colorado schools are severely underfunded right now, and this initiative is a way we can ensure that every student has access to the supports they need for success,” said Susan Meeks, a spokeswoman for Great Education Colorado, one of the groups supporting the measure.

Colorado’s Taxpayer’s Bill of Rights requires that voters approve any tax increase, and voters have twice before rejected statewide school funding measures, most recently in 2013.

To get on the ballot this time, supporters need 98,492 valid voter signatures. Amendment 71, approved in 2016, requires that those signatures be gathered in every state Senate district in the state, imposing – by design – a logistical and financial hurdle on all constitutional amendments. (A federal judge has suggested that requirement might violate the U.S. Constitution, and it’s not clear right now whether it will remain in effect.)

The tax measure calls for:

  • Raising the corporate income tax rate from 4.63 percent to 6 percent.
  • Raising the income tax rate from a flat 4.63 percent to between 5 percent and 8.25 percent for people earning more than $150,000. The highest tax rate would be paid by people earning $500,000 or more.
  • Setting the residential property assessment rate at 7 percent for schools. That’s lower than it is now but higher than it is predicted to be in 2019 because current law has the unintended effect of gradually reducing the residential assessment rate.
  • Setting the non-residential property assessment rate at 24 percent, less than the current 29 percent.

According to a fiscal analysis by the state, the average taxpayer earning more than $150,000 would pay an additional $519 a year, while those earning less would be unaffected. The average corporate taxpayer would pay an additional $11,085 a year. The change in property taxes would vary considerably around the state, but based on the average statewide school levy, many property owners would pay $28 more on each $100,000 of actual value in 2019 than they otherwise would. Commercial property owners will see a decrease, and total property tax revenue collected by school districts would go down statewide.

If approved, the taxes would generate an estimated $1.6 billion that would go into a new “Quality Public Education Fund.” The vision is that this money would be distributed to schools in accordance with a new school finance formula backed by nearly all of the state’s superintendents and under consideration in the legislature this year.

The new funding formula, which would increase per-pupil funding in accordance with student characteristics like being gifted and talented or learning English as a second language, only goes into effect if voters approve the tax measure. If that plays out, no school district would lose money on the deal, and some would see significant increases in funding.

If lawmakers don’t pass a new funding formula, but voters approve the tax measure, schools would still get more money. The ballot measure calls for an increase to the base amount of per-pupil funding, plus extra money for students with particular needs, money for public preschool, and money for full-day kindergarten.

Full funding for kindergarten has been an elusive Holy Grail for education advocates in Colorado.

“Our measure is addressing the needs of the kids head on,” said Donald Anderson, one of the backers of the tax increase. “You can see where we’re raising this money and you can see where it’s going, and it’s very transparent in a way that voters will be able to get behind.”

Anderson is a stay-at-home father of two children in the Poudre School District in Fort Collins who has been active on school issues.

The ballot measure also contains a provision that requires the state to keep spending what it already does. That is, lawmakers can’t lean on this new money source and divert existing education spending to other needs.

Luke Ragland of the conservative education reform group Ready Colorado supports the idea of weighted student funding contained in the proposed new finance formula, but he doesn’t think Colorado’s education system needs a huge infusion of cash – if voters even go along with the idea.

“I don’t understand why the presumption is that spending more money will make things better,” he said. “Spending money on the same things won’t produce different outcomes.”

The education spending measure could be sharing space on a crowded ballot with a governor’s race, a transportation measure, and more.

The most recent attempt to raise money for schools – Amendment 66 in 2013 – was rejected by 65 percent of voters. That measure affected all taxpayers by imposing a 5 percent income tax rate on those earning up to $75,000 and a 5.9 percent rate on those earning more. It also involved a change to the funding formula, but one that caused some districts to lose money.

Is this a good time to try again for an education tax increase? Backers of the idea say there’s only one way to find out.

“We have one of the best economies in the nation right now, and it’s the perfect time to be investing in our students,” Meeks said.

School Finance

Big blow to Indianapolis Public Schools’ bid for tax increase: Realtors aren’t sold

PHOTO: Alan Petersime

A politically influential group representing real estate agents is taking the rare step of opposing Indianapolis Public Schools’ $725 million proposal to raise property taxes to increase school funding.

The opposition deals a harsh blow to the referendums, which the district downsized earlier this week in the face of criticism and little public support.

“Most importantly, we are concerned that property owners have not been given enough detail or clarity on the individual impact,” said the statement from the MIBOR Realtor Association. “The recent change to the proposed dollar amount only elicits more concern with IPS moving forward with their short timeline.”

 

The association opposes the request because it would be burdensome for Indianapolis residents, CEO Shelley Specchio said. She also criticized the district for not providing clear enough information on how the tax increase would impact individual property owners and how it would be used in schools.

“It was a difficult decision — not something that we took lightly, because of course, we really value strong quality schools,” Specchio said. But “we felt that the tax increase would be burdensome to homeowners.”

In a statement, chief of staff Ahmed Young said the district will continue working with the community.

“IPS is committed to being a good steward of taxpayer resources,” Young said. “We lowered the operating referendum ask on Tuesday as part of this commitment. We look forward to further collaboration with the community to advocate for our schools.”

The real estate agents group has about 8,000 members in Central Indiana. It has been one of the largest local contributors to campaigns for seats on the Indianapolis Public Schools board, giving thousands of dollars in recent years to support at least four of the current board members.

This is the first time the group has opposed an appeal for more money from a school district, said Chris Pryor, vice president of government and community relations. It has not taken a position on any Marion County school funding referendums, he said. But it has supported raising taxes for schools in other places, such as Anderson, and donated money to the campaigns.

Other influential groups, such as the Indianapolis Chamber of Commerce, have not yet taken positions on the referendums. Many community leaders agree that the district needs more funding, but they have raised concerns about the size of the request.

The opposition from the real estate industry group is a significant blow for the district because there has been virtually no campaign in support of the measures so far, said Ed Delaney, a Democratic state representative who lives in the district. The association is the first civic organization to take a position.

“I’m sorry that an organization like that, which has shown an interest in our community, would feel that they had to take this position,” Delaney said. “I’m saddened that we’ve come to this.”

Just two days ago, the school board responded to community concern by cutting its request from nearly $1 billion to about $725 million over eight years in a bid to win political support. The two measures, which will go before voters in May, would raise money for expenses such as teacher pay, special education services, and building improvements.

If the referendums pass, the tax increase for homeowners would be $0.58 per $100 of assessed value. For taxpayers with houses at the district’s median value — $123,500 — the new plan would increase property taxes by $23.24 per month.