Our View: Fixing the education fund

At Issue: Gov. Bill Ritter's plan to stabilize public education fund

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Gov. Bill Ritter is to be commended for trying to address anticipated shortfalls in the state's Education Fund.

Ritter's plan is expected to come back before the General Assembly this week. Earlier in the legislative session, lawmakers dropped it amid broad opposition from both parties. The plan has been re-tooled and will be re-submitted Thursday.

We aren't optimistic about the plan's chances. There are not enough changes to overcome the primary opposition that the plan essentially is a tax increase. We certainly understand that sentiment.

But here's the rub - defeating Ritter's bill won't make the problem go away. If lawmakers don't like the governor's solution, we would challenge them to offer a viable alternative.

Ritter's plan would freeze property tax rates in most of the school districts in the state. Doing this would gradually decrease the state's public education burden by about $50 million per year.

Evan Dreyer, a spokesman for Ritter, said the state currently funds about 65 percent of public education costs. The remaining 35 percent is picked up by local school districts through property taxes. In 1994, the state's share was 53 percent. In five years, the governor's office estimates, the state's share will be 73 percent.

Because of the way Colorado funds public education and the complicated ramifications of the Taxpayer's Bill of Rights and Amendment 23, the state's share of public education costs must grow every year.

Eventually, there won't be enough in the state Education Fund to meet the state's obligations. Because of Amendment 23, the state will be forced to cut other parts of the state budget - social services, higher education, health care, etc. - to make up for the shortfall.

Ironically, the way the formulas work, school districts in affluent, growing areas continue to see their school tax rates decline thanks to TABOR, while the amount the state provides those districts has to grow thanks to Amendment 23. For example, a decade ago, Steamboat Springs had a school district property tax rate of more than 40 mills, which accounted for 98 percent of the district's funding. Today, the district's local rate is 16.047 mills, and the state picks up about 10 percent of the district's budget, said Dale Mellor, finance director for the school district.

Ritter's plan also includes a provision to decrease the mill levies in 33 mostly rural school districts where tax rates are above average. The state would increase funding to those districts. And the plan would increase the minimum per-pupil rate in 11 school districts, including Moffat County.

Advocates of Ritter's plan don't want to acknowledge it, but the fact is the plan is a tax increase. The tax rate would stay the same, but tax bills would go up as property valuations increase. That means taxpayers would pay more in taxes under the plan than they will if it is defeated. That's going to be a tough sell with most Republicans and many Democrats. State Sen. Jack Taylor, R-Steamboat Springs, is opposed to the plan.

If nothing else, Ritter deserves credit for getting an important discussion started. In the long run, perhaps his efforts can be a first step toward a solution that averts another state fiscal crisis.

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