A Bud­get Sum­mit was held Feb­ru­ary 10^th and 11^th with rep­re­sen­ta­tives from the var­i­ous asso­ci­a­tions and cab­i­net from Jef­fco school dis­trict as well as two school board mem­bers to pri­or­i­tize the funds and put together the bud­get.  We know we are cut­ting at least $25 mil­lion dol­lars, down from $35 mil­lion.  We will know more in the next few weeks about what the bud­get will look like and then an imple­men­ta­tion plan can be put together.

 

Here is a “pri­or­i­tized list of reduc­tions” that out­lines these cuts.  This file con­tains cuts of over 590 per­son­nel and at least $67.8 mil­lion dol­lars.  Of the 590 per­son­nel to be cut, it is pro­posed that 175 come from senior high, 65 from mid­dle school and 226 from ele­men­tary school.   Coun­selors, licensed staff, sec­re­taries, librar­i­ans and para­pro­fes­sion­als are all impacted and thus class sizes will be increas­ing again.  One shock­ing pro­posal for the ele­men­tary schools is to elim­i­nate 5^th and 6^th grade instru­men­tal music.  Out­door Lab is also not funded.

Please look for infor­ma­tion in the news, on this web­site and on the Jef­fco web­site for more infor­ma­tion.  Please visit the Leg­isla­tive web­page on the web­site as well the web­sites below to learn more about school fund­ing issues.  Thank you!

What is the Gal­lagher Amendment?

The Gal­lagher Amend­ment, passed in 1982, was designed to main­tain a con­stant ratio between the prop­erty tax rev­enue that comes from res­i­den­tial prop­erty and from busi­ness property.

 

The effect of Gal­lagher was to reduce the assess­ment rate (the per­cent of prop­erty value that is sub­ject to tax­a­tion) when­ever res­i­den­tial prop­erty val­ues increased faster than busi­ness prop­erty val­ues. As a result of the Gal­lagher Amend­ment, the assess­ment rate for res­i­den­tial prop­erty has declined by about two-thirds since 1982 due to pop­u­la­tion growth and increases in res­i­den­tial real estate values.

 

The net effect has been a marked decline in rev­enues col­lected from prop­erty tax, which prior to Gal­lagher, pro­vided the major­ity of school funding.

 

What is TABOR?

Passed in 1992, TABOR is the “Tax­payer Bill of Rights,” which imposes the strictest rev­enue and spend­ing lim­its in the nation. TABOR:

Pro­hibits any tax increase with­out a vote of the people;

Places strict lim­its on how much rev­enue the state can keep and spend;

Requires any rev­enue col­lected in excess of TABOR’s rev­enue lim­its – at every level of gov­ern­ment includ­ing school dis­tricts – to be refunded to the tax­pay­ers, unless the vot­ers decide to “de-Bruce” (i.e., allow the gov­ern­ment to retain the “excess”). This pro­vi­sion of TABOR was sus­pended at the state level for five years (2006–2011) as a result of the pas­sage of Ref­er­en­dum C.

 

How have Gal­lagher and TABOR com­bined to affect pub­lic schools?

Schools are funded by a com­bi­na­tion of local (prop­erty) and state rev­enues. The Gal­lagher Amend­ment for­mula has lim­ited local rev­enues by cut­ting the res­i­den­tial assess­ment rate by two-thirds since its pas­sage in 1982.

 

From 1982 until 1992 dis­tricts could make up for the lower assess­ment rate by increas­ing their mill rate (prop­erty tax rate). In addi­tion, the state had the flex­i­bil­ity to increase state spend­ing to make up for the amount that prop­erty taxes used to cover.

 

But with the pas­sage of TABOR in 1992, a com­bi­na­tion of bud­get for­mu­las made it increas­ingly dif­fi­cult to fund schools. TABOR’s rev­enue lim­its auto­mat­i­cally cut mill rates in dis­tricts across Col­orado, and at the same time, TABOR lim­ited the state’s abil­ity to prop up school fund­ing with state dollars.

 

Note that the com­bi­na­tion of Gal­lagher and TABOR has shifted the bur­den of school fund­ing from local prop­erty taxes to the State Gen­eral Fund. Thus, the State’s Gen­eral Fund pro­vides more than 60% of school fund­ing whereas it used to be less than 40%. This explains the dra­matic increase in the por­tion of the Gen­eral Fund now spent on schools.

 

What is Amend­ment 23?

In 2000, the vot­ers passed Amend­ment 23 to reverse a decade of bud­get cuts expe­ri­enced by Col­orado school dis­tricts through­out the 1990s. Amend­ment 23 guar­an­tees min­i­mum annual per pupil fund­ing increases of “infla­tion +1 per­cent” through 2011, and “infla­tion” after that.

 

After nine years of Amend­ment 23, we are finally spend­ing about as much per child as we did in 1989, adjusted for infla­tion. Notably, Amend­ment 23 uses an infla­tion mea­sure that is much lower than the actual cost increases that school dis­tricts encounter because of what they pur­chase: health care, energy, trans­porta­tion, pen­sions, etc. As a result, dis­tricts’ actual pur­chas­ing power is far below 1989 levels.

 

Over the years, Amend­ment 23 has been treated as a ceil­ing for fund­ing – rather than as a floor as it was intended to be. Now it appears that the leg­is­la­ture will rein­ter­pret parts of Amend­ment 23 in a way that allows them to lower that floor/ceiling by up to a bil­lion dollars.