Local voters could face an increase in their personal income and property taxes if an education bill that is currently being proposed in the state legislature passes.
Senate Bill 13-213 attempts to rewrite the state’s school financing formula and is built around the philosophy of adequacy and equity, which could take more funding away from wealthy communities.
Rep. Millie Hamner, who won Aspen’s newly redrawn House District 61 seat last November, co-sponsored the bill along with Sen. Michael Johnston and Sen. Rollie Heath.
Under the bill, the Aspen School District would receive an increase of about $250,000 in state funding during its first year and that number would likely grow by about 2 percent annually after that, according to Hamner. Language in the bill also would give local governments more autonomy in raising revenues for Aspen schools by removing caps on mill levies, she said.
If it passes in Colorado’s General Assembly, the issue could go on November’s ballot when voters would decide whether to raise the state’s personal income tax to increase state education funding by $1 billion. Details on how much the tax increase would be have not been fully vetted, Hamner said. The bill passed in the state Senate earlier this month and it is currently being reviewed by the House.
The $250,000 increase would not be enough to account for the district’s annual budget shortfall of about $2.7 million, which it has been trying to make up since state funding cuts began in 2009, schools superintendent John Maloy said.
Over the past four years, the district has accounted for the deficit by doing things like implementing furlough days, cutting professional development programs offered to teachers and reducing special needs programs.
In 2010, a mill levy increase was passed by Aspen voters. The levy applies to property owners and taxes them about $16 a year for each $500,000 of assessed property value. It raises around $1.35 million annually.
And in November the district passed a 0.3 percent city sales tax, which will sunset after four years, in an effort to avoid more severe cutbacks that would have had widespread impacts on district programs and staff levels. The tax is expected to raise about $1.75 million annually.
If the proposed bill passes, the district will have to permanently account for its shortfall by potentially asking the community to increase local property taxes, Maloy said. Maloy and district finance director Kate Fuentes spoke out against the bill in front of the Senate Education Committee in March, and met with Hamner and Colorado Sen. Gail Schwartz earlier this month.
“Our position is that we have a very supportive community and it has been our partner in helping us weather the storm,” Maloy said. “Our concern is that the bill would create a long-term challenge where the district would have to continually go back to the community to ask for additional dollars, which was not our intent when [we proposed] the sales tax initiative.”
The problem with the bill includes imprecise language and it doesn’t define what adequate funding should be on a per-student basis, Fuentes said. It also doesn’t fix the state’s overarching problem of significantly underfunding public schools, Maloy added.
“The notion that a billion dollars is going to solve the K-through-12 picture is not quite true,” Maloy said. “It’s a step in the right direction, but it’s only about 25 percent of the dollars necessary to address the last decade of cuts in K-through-12 funding.”
Hamner acknowledged that the bill does not raise as much money as the state’s education system needs. If the bill were to fully address what is adequate funding for all of the schools in the state, the legislature would be proposing an increase in personal income taxes that would raise at least $3 billion, Hamner said. That kind of tax increase probably would not get passed by voters, but a hike that would raise $1 billion for education might, she said.
“We believe that this is something that the voters could possibly tolerate on the November ballot,” Hamner said.
The Aspen School District is likely not in support of the bill because, thanks to community support, it hasn’t felt the impacts of state budget cuts as much as other districts, Hamner said.
Maloy disagreed. The district has stepped up to maintain the school’s standards by looking at all of the methods possible without creating additional burden on the employees and the community at large, Maloy said.
“We are fortunate that we do have a community that supports the quality of our schools,” Maloy said. “But it doesn’t mean that we haven’t been impacted.”
Hamner said she plans to continue to work with district officials as the bill goes through the amendment process.
“I’ll admit we’re not 100 percent there yet,” Hamner said. “We’ve had great conversations, though, and we’ll continue to do so.”