Presentation on Colorado School Finance
INTERIM COMMISSION TO STUDY FISCAL STABILITY
11:21 AM -- Presentation on Colorado School Finance
Mr. Todd Herreid, Legislative Council Staff, provided an overview of school finance, the Gallagher Amendment, TABOR, and Amendment 23. Commission members received a copy of a booklet prepared by LCS entitled "School Finance in Colorado." A copy of this document is available on the commission's website. A copy of the memorandum entitled "The State Constitution and School Finance" is also located there.
Mr. Herreid began by providing a basic overview, and explained that over the past 23 years, the state share of education finance has increased from approximately 44 to 65 percent.
Mr. Herreid then discussed the Gallagher Amendment. He stated the Gallagher Amendment provides property tax relief for residential property owners. The Gallagher Amendment, he said, essentially adjusts the residential assessment rate up or down to keep the assessed value of both residential and nonresidential property in the same proportion. A drop in the residential assessment ratio, decreases the local funding share for state education expenditures and increases the state's share of educational funding. Mr. Herreid continued by providing a historical overview of the residential assessment rate in Colorado, both before TABOR was passed and after TABOR and Amendment 23. He responded to questions about calculating the residential assessment rate. The Commission continued discussing the history of calculating the residential assessment rate.
Mr. Herreid provided background about TABOR, explaining that TABOR limits total school district revenue and property tax revenue. In addition, he explained that voter approval is required for any mill levy or assessment rate increase. He stated that a conflict exists between TABOR and the Gallagher Amendment, and discussed assessed value, inflation, and enrollment growth. He also explained that Senate Bill 07-199 prevented mill levies from falling, thus making the local share of education funding higher and the state share's of funding lower.
Mr. Herreid then discussed Amendment 23 of the State Constitution. He explained that Amendment 23 requires minimum funding increases for K-12 public education. Amendment 23 also diverts money to the State Education Fund. Mr. Herreid explained that TABOR restricts school district revenue, while Amendment 23 increased funding requirements. He also noted the House Joint Resolution 03-1033 study about TABOR, Amendment 23, the Gallagher Amendment, and other state fiscal issues. Mr. Herreid responded to additional questions about state education funding. Members of the commission also asked about the enabling act, state school lands, and other educational issues.
In addition, members received a copy of the House Joint Resolution 03-1033 study, available on the commission's website.