Steamboat Springs educators concerned by early drafts of Senate bill seeking major changes to school finance formula
February 4, 2013
Steamboat Springs — The Steamboat Springs School District is among a small group of districts in Colorado that could lose a significant portion of their state funding under a new Senate bill exepected to be introduced this session.
The bill being crafted by state Sen. Michael Johnston, D-Denver, is expected to seek sweeping changes to the formula used to determine how much each district receives if voters in November will approve $1 billion to $1.5 billion in additional revenue for public education in the state.
But educators here said Monday they are concerned by the early drafts of the bill, which they say appears to put Steamboat Springs on a list of "losing" districts that could be asked to seek more funding from their local taxpayers to free up dollars at the state level.
Paula Stephenson, the executive director of the Colorado Rural Schools Caucus, fears the bill could create a "Robin Hood" scenario where wealthier districts are tapped to seek more revenue from their taxpayers.
"Based on the concept paper (of the bill) and the initial financial runs I’ve seen, there are about 20 districts in the state that will be losers under the new formula, and Steamboat is one of them," Stephenson said.
She said because of its higher assessed property values and median income, the Steamboat Springs School District, along with 19 other districts in mountain resort and mineral-rich communities, stand to lose a significant share of their state funding if Johnston’s bill aims to equalize the percentage of funding school districts receive from the state and their local taxpayers.
Other districts on the list with Steamboat include the school systems in Durango, Aspen, Bayfield, Ignacio and Aguilar.
Stephenson added the bill could push those districts to go to voters for more local revenue via increased taxes.
"I’m still surprised that there seem to be immediate winners and losers (in this bill) because the goal of the initial conversations was to make districts whole and add to their revenue," she said. "I don’t want the state to create a Robin Hood scenario."
She said an early financial analysis of the proposed changes to the finance formula shows they could increase the amount of funding the neighboring Hayden and South Routt school districts receive from the state by hundreds of thousands of dollars, while cutting about $2.2 million, or 10 percent, of Steamboat’s state funding.
Determining a fair share
In November, Johnston met with several local superintendents in the South Routt School District’s administrative offices to gauge the educators’ reaction to his push for additional education funding.
Many of his ideas, including a plan to allow district’s to receive funding for students who enroll after the annual Oct. 1 official headcount, were well received.
Johnston said Monday it’s still too early to say how his bill will financially impact school districts in Routt County, and he hopes to have his bill introduced in the coming weeks.
He said he doesn’t think there will be any "losers" as a result of the legislation.
"The policy is changing day to day," Johnston said about the bill, adding there have been more than 150 drafts with varying financial implications for school districts. "I’m confident we’ll have a proposal that will have winners and bigger winners, and there will be big support for rural districts across the state."
He said he and other legislators have been exploring for about a year the concept of equalizing the ratio of state and local funding school districts receive. He said at one point in Colorado’s history, school districts received 70 percent of their funding locally and 30 percent from the state.
"But over the past 25 years, that equation has been reversed," he said. "One reason we’ve seen so many drastic cuts to schools is that their budgets are so tied now to the state budget. … We think re-establishing more of a local (funding) balance protects the long-term investment in K-12 education."
He said his bill will aim to fix a funding formula that allows some school districts in the state with very high property values and median incomes but low mills to receive a significantly higher amount of state funding than neighboring communities that are taxing themselves at a higher rate but receiving far less from the state.
Johnston said that if some districts do end up losing a portion of state funding, he envisions there will be a five-year "hold harmless period" during which districts will maintain their current funding levels while they figure out how to increase their local revenues.
"There is no district that would see fewer dollars the year after this passed than they do currently," Johnston said. "There would be be a five-year window of time to see if they want to adjust their local mills."
Johnston told local superintendents last year any changes to the finance formula would be dependent on the passage of a tax increase to support public education.
First read concerning
Steamboat Springs Superintendent Brad Meeks said Monday the district has many questions about how the bill is coming together, but the initial reads of the proposal have him concerned.
"It’s never pleasant to go through a formula change and find out you’re on the side that’s going to lose funding," Meeks said. "We’re thinking we’re going to see a light, and now we’ve potentially got a $2 million problem. That’s over 10 percent of our budget. My biggest concern is informing the public on what’s going on locally if this should come to fruition.
“We’ll have to explain why we’re going backwards and other districts are moving forward, and we’ll have to go out and potentially ask people to increase taxes just to maintain the status quo. That is not an enviable position to be in."
Stephenson, whose Rural Schools Caucus represents more than 100 rural districts in the state, said she appreciates the work Johnston has put into the bill, including his outreach efforts to her organization and with educators across the state.
"I think right now Senator Johnston is trying to walk a tight rope of balancing politics and policy," she said, adding that she fears “politics may win out” and the proposal may not benefit all school districts. "Right now, it’s a waiting game."
To reach Scott Franz, call 970-871-4210 or email scottfranz@SteamboatToday.com