HOUSE ADVANCES SCHOOL FUNDING FIX

Bill would help ensure fair and sufficient public school funding in every Colorado community

DENVER, CO — The House today passed HB21-1164 on second reading. The bill, sponsored by Majority Leader Esgar and Speaker Garnett, would correct an error in Colorado’s property tax system to help ensure fair, equitable and sufficient public school funding across the state.

“Today, we took an important step forward to fix our broken education funding system and ensure that every student in Colorado has access to the public education they need to thrive,” said Majority Leader Daneya Esgar, D-Pueblo. “This bill corrects an error in our school funding system that has led to widespread inequities in how we finance public education, with some wealthy districts getting substantially more state funding than schools in less affluent parts of our state. By returning school revenues to voter-approved levels, we can start the long overdue process of providing every district in Colorado fair and sufficient funding for their students.”

“It’s no secret that our K-12 funding system has deep inequities between our wealthiest school districts and those districts that need the most support,” said Speaker Alec Garnett, D-Denver. “Building back stronger means solving deep-seated inequities that have plagued our state since long before the pandemic began. This bill begins to bring fairness and equity to our school finance system and respects the will of voters who have clearly signaled their desire to invest in public education. This is the right thing to do for Colorado students, parents, and our state as a whole.”

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.

DENVER, CO — The House today passed HB21-1164 on second reading. The bill, sponsored by Majority Leader Esgar and Speaker Garnett, would correct an error in Colorado’s property tax system to help ensure fair, equitable and sufficient public school funding across the state.

“Today, we took an important step forward to fix our broken education funding system and ensure that every student in Colorado has access to the public education they need to thrive,” said Majority Leader Daneya Esgar, D-Pueblo. “This bill corrects an error in our school funding system that has led to widespread inequities in how we finance public education, with some wealthy districts getting substantially more state funding than schools in less affluent parts of our state. By returning school revenues to voter-approved levels, we can start the long overdue process of providing every district in Colorado fair and sufficient funding for their students.”

“It’s no secret that our K-12 funding system has deep inequities between our wealthiest school districts and those districts that need the most support,” said Speaker Alec Garnett, D-Denver. “Building back stronger means solving deep-seated inequities that have plagued our state since long before the pandemic began. This bill begins to bring fairness and equity to our school finance system and respects the will of voters who have clearly signaled their desire to invest in public education. This is the right thing to do for Colorado students, parents, and our state as a whole.”

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.