The Triple Threat Against CO Ed Funding

School Funding | 11/30/2018

Danielle DeSantis
State Organizing Director

How did Colorado's teachers rank among the lowest in the country in terms of competitiveness of pay? Why are more than half of Colorado's districts on a 4-day school week

School funding is an incredibly complicated issue but the Centennial State has a few factors that make our funding situation particularly complex and convoluted. For one, our school finance law has been relatively untouched since 1994. Most people can agree that a finance law that was last updated when gas cost only $1.04 a gallon (remember those days?), is probably in need of a revamp.

However, today we want to talk about three factors that have significantly complicated the education funding system in Colorado: The Gallagher Amendment, The Taxpayer Bill of Rights (TABOR), and the Budget Stabilization Factor. Whether intentionally or not, these three things have interacted with each other in a way that has made it significantly more difficult to update education funding. 

  • Voters passed The Gallagher Amendment back in 1982 due to concerns about rising residential property taxes. To put it simply, Gallagher maintains a constant ratio between the property tax revenue that comes from residential property and from business property (Source). It does this by mandating that 45% of state property tax comes from residential property while 55% must come from nonresidential (or commercial) property. Because the residential rate is adjusted annually to maintain this 45/55 split, the amount of residential property tax has declined drastically over the years due to increasing property values. This has led to sinking revenues for school funding through property taxes. 
  •  Since TABOR passed in 1992, it has severely funding for schools by requiring that any tax increase at the local or state level must first be put to the voters. While TABOR has contributed to a steep decline in funding for education, it also combines with the Gallagher Amendment to further cut funds and force the state to contribute even more money to education. In order to maintain that 45/55 split, Gallagher automatically lowers assessment rates which, thanks to TABOR, cannot be raised to an adjusted rate without voter approval. 
  • The Budget Stabilization Factor (previously called the Negative Factor) was passed by the Colorado legislature in FY 2009-2010 in response to pressures on the state budget during the Great Recession. It allowed legislators to decide the amount of funding schools would get based on a formula created in 1994 and compare that to the existing available tax revenue. The difference is called the "stabilization factor." Currently, we need roughly $800 million to close this gap.

Confusing, right? 

We think that Colorado's confusing education funding system should not prevent parents and families from advocating for the funds their children, teachers, and schools need. Join us on Saturday, December 15th from 10am-2pm as we discuss how our education system is funded, and how as a community we can promote and demand a more equitable system. 

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