School funding plan approved

Ritter gets way on tax rate freeze; GOP sees backlash

Berny Morson, Rocky Mountain News

Published May 2, 2007 at midnight

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Gov. Bill Ritter's plan to generate more property tax income for schools cleared its final legislative hurdle Tuesday with narrow passage in the Senate.

The measure, Senate Bill 199 sponsored by Sen. Sue Windels, D-Arvada, passed 18-16. It now goes to Ritter for his signature.

Republicans, who called the plan a tax increase, predicted it will spark a backlash.

"This is going to drive a revolt in the future of taxpayers, just like it did in the late '70s and early '80s across the country," said Sen. Greg Brophy, R-Wray. "People cannot take these types of increases in their property tax burden."

Democrats said the additional money is needed to prevent the state education fund from becoming insolvent by 2011-12.

"There are some votes that require political courage," said Sen. Chris Romer, D-Denver.

Under the bill, property tax rates will be frozen at current levels, eliminating tax cuts that otherwise would have taken place under a 1994 school finance law.

Although the rate is frozen, not increased, homeowners' tax bills will rise as property values rise. Revenue to school districts also will increase as new properties are added to the tax rolls.

Because the districts will see a corresponding decrease in state aid, the freeze, in effect, will prop up the state education fund.

The plan will affect the tax bills homeowners receive next spring. It is expected to raise an estimated $48 million more in property tax revenue for the 2007-08 school year. Amounts will vary in succeeding years.

If the education fund were to collapse, the legislature would have to cut other programs to sustain public schools as required by the state constitution. Programs that likely would take hits include higher education, mental health, prisons and Medicaid.

In a statement, Ritter said, "Today's action by the Senate and last week's action by the House will make a difference not just for children in our K-12 education system, but for higher education, health care and other services provided by the state to the people of Colorado."

Senate Republicans argued that the plan requires voter approval under Colorado's Taxpayer's Bill of Rights, or TABOR.

But Democrats countered that voters in 175 school districts already have voted to exempt themselves from TABOR. Three districts that have not exempted themselves will not be included in the rate freeze.

Attorney General John Suthers, a Republican, agrees that the plan should go to voters, but lawyers for the governor and lawmakers back the plan's legality.

El Paso County Commisioner Douglas Bruce, author of the TABOR amendment, said he will ask Suthers to challenge the tax plan in court.

"I'm sending an e-mail to John Suthers asking him to enforce his opinion and the plain meaning of the constitution," Bruce said.

Suthers' spokesman, Nate Strauch, said the attorney general is not planning to sue the state, but declined further comment on Suthers' options.

How new school tax law will affect metro districts

Chart shows the increase or reduction in property taxes homeowners will pay in 2007-08 under the school finance bill approved Tuesday compared to amounts under existing law:

District	06-07 Mill Levy	07-08 Mill Levy under Existing Law	07-08 Mill Levy under New Law	Difference	Difference in tax payment between existing law, new law *
Aurora	26.010	25.420	26.010	0.590	4.70
Boulder	25.023	24.479	25.023	0.544	4.33
Cherry Creek	27.710	27.568	27.000	-0.568	(4.52)**
Commerce City	24.688	23.870	24.688	0.818	6.51
Denver	25.541	23.688	25.541	1.853	14.75
Douglas	25.440	24.401	25.440	1.039	8.27
Englewood	21.895	19.449	21.895	2.446	19.47
Jeffco	26.252	25.473	26.252	0.779	6.20
Littleton	25.353	24.740	25.353	0.613	4.88
Longmont	24.995	24.882	24.995	0.113	0.90
Mapleton	26.080	24.848	26.080	1.232	9.80
Northglenn	27.524	27.524	27.000	-0.524	(4.17)**
Sheridan	20.947	18.907	20.947	2.040	16.24
Westminster	27.066	27.066	27.000	-0.066	(0.52)**

* Per $100,000 of assessed valuation. For example, in the Aurora district, a home valued at $200,000 would pay twice the figure showing here, or $9.40.

**Figures in parentheses represent reductions in tax

Source: Data from Legislative Council; tax bill calculated by Rocky Mountain News

morsonb@RockyMountainNews.com or 303-954-5209

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