Bill would help ensure fair and sufficient public school funding in every Colorado community
DENVER, CO — The House Education Committee today passed HB21-1164, sponsored by Majority Leader Esgar and Speaker Garnett, which would correct an error in Colorado’s property tax system to help ensure fair, equitable and sufficient public school funding across the state.
“This is the year we start to correct our broken education funding system to ensure that every child in our state has access to the education they need to thrive,” said Majority Leader Daneya Esgar, D-Pueblo. “All Colorado students and taxpayers deserve a fair and sufficient share of our public education budget. By passing this bill, we can correct an error that reversed the will of voters and which led to enormous inequities in how we fund public schools. This bill sets us on a long overdue path to ensure that every school district has the resources they need to offer the quality education every student deserves.”
“It’s past time to fix some of the structural inequities in Colorado’s K-12 school finance system,” said Speaker Alec Garnett, D-Denver. “Our current school district mill levies were misapplied and don’t comply with the will of the voters to invest in their local schools. Year after year, this error has forced the state to backfill disproportionately more funding to our wealthiest districts while many districts struggle to appropriately fund education. By fixing this mistake, we can slowly make school district funding more fair and bring it in line with what voters have approved.”
HB21-1164 forms the basis of a constitutional question to be sent to the Colorado Supreme Court as an interrogatory. The purpose is to align Colorado’s property tax system with original voter intent in local school districts’ “de-Brucing” elections. Between 1994-2002, taxpayers across the state voted to get out from under TABOR imposed caps on school district revenue. Despite the will of the voters to support their local schools, the Colorado Department of Education incorrectly interpreted TABOR and artificially required school districts to collect less revenue. In fact, in 2009, the Colorado Supreme Court held that these mandated reductions were erroneous in its ruling in Mesa Board of County Commissioners v. State. The result has been escalating inequities in school funding across the state, and precious state dollars used to backfill wealthy districts while the system overall is severely underfunded.
The 2020 School Finance Act (SFA) took the first step to correct this error. The 2020 SFA aligned statute with the Mesa ruling, treating past tax rate reductions as a mistake if they were enacted to comply with the TABOR limit after local voters had waived that limit. This action reset all district total program mill levies to the rate in place at the time of the successful de-Brucing election, while enacting mill levy “credits” at 100 percent of the difference between the old levy and the corrected levy in order to negate potential impacts to taxpayers during the COVID pandemic.
HB21-1164 directs CDE to implement a correction plan for the erroneous reductions in total program mill levies by beginning to incrementally phase out mill levy credits starting in FY 2021-22. This timeline was chosen intentionally to ensure no district has to phase out credits faster than 1 mill per year.