Mail-in ballots on their way to voters this week carry a question with far-reaching impact on the way Coloradans tax themselves and spend money on education.
Amendment 66 asks for a $950 million tax increase to fund a recently passed law, Senate Bill 213, that would implement school reform and change the way the state distributes dollars to its 178 school districts.
The new law touches on many aspects of school finance, starting with changing the way the state counts student enrollment. It also intends to channel more money toward early-childhood education, at-risk students, English-language learners, charter schools and locally determined innovations such as longer school days and years.
Advocates frame the tax increase as a crucial investment in education that will vault Colorado into a position as a national leader in reform.
“It’s a transaction,” said Gov. John Hickenlooper, who supports the measure. “Everyone has to decide: Is this worth what we’re giving — $950 million? I’d argue it allows us to go out and say it’s the most comprehensive education-reform initiative in the history of the United States. And if it passes, it will make us a national model for public education.”
Criticism of the measure touches on several key arguments: The tax burden would be too great in a recovering economy; there’s not enough reform in the overall package; and fairness issues abound, including disparities in districts’ return on investment.
The tax issue has been a tipping point for business support of the measure. Most business groups have remained neutral on Amendment 66, but those that have come out against it, such as the South Metro Denver Chamber of Commerce, cite the two-tiered state income tax proposal as the deal-breaker.
The new tax structure doesn’t change the state corporate rate, but small businesses that report business income on personal tax returns would see an increase.
“We have a flat tax in Colorado, nice and simple, and we need to keep that,” said John Brackney, president and CEO of the group. “Otherwise, the next issue will come along and it will be a slippery slope of every legitimate interest saying it’s just a tweak, let’s do three, four or five (tiers).”
Major overhaul
The measure would provide the first major overhaul to the state’s school finance system in nearly 20 years. It would attempt to make state and local shares of district funding more equitable by resetting the equation for funding lower-income districts.
It would pour $165.5 million into full-day kindergarten and $77.5 million into preschool programs. It also targets $100 million for education-innovation grants, such as expanded school days, and $381.3 million for student testing, professional development for educators, early literacy and school accountability.
It promises a net gain in funding for every district and financial transparency through a website that would allow the public to track spending at the school level.
“There’s not a single district in the state that loses revenue on this,” said Sen. Mike Johnston, the Denver Democrat who carried the bill.
What does it mean to a taxpayer’s bottom line?
That depends on where they fall within the proposed two-tiered state income tax system that does away with the 4.63 percent flat rate. Taxable income up to $75,000 would be subject to a 5 percent levy; income over that amount would be taxed at 5.9 percent.
For example, households with $35,000 of taxable income would pay an additional $130 annually; those with $85,000 would pay $405 more; and those with $135,000 would pay $1,040 more.
The financial impact of Amendment 66 goes beyond the tax increase alone, because it also frees up more than $600 million in existing education funding and redirects it to target programs.
Leaders from most school districts have thrown their weight behind the measure, but some quibble with the new system of divvying up the funding, which will provide larger sums of money those with greater concentrations of English learners and children in poverty.
In Colorado’s rural areas, which account for 82 percent of the state’s school districts and 23 percent of the student population, the reaction to Amendment 66 has varied. The Colorado Rural Schools Caucus, which has 136 members statewide, avoided the issue until a couple of weeks ago, when it decided to support the measure.
For the caucus, the key selling point is the influx of resources, particularly to areas where assessed property values are low and mill levies run high, limiting availability of local resources for schools. New money could also help make up for five years of recession budget cuts.
“For us, it’s an equity issue,” said George Welsh, superintendent of the Center School District in the San Luis Valley. “It’s not perfect. But the way it takes into account your size and at-risk population and distributes dollars that way is a whole lot more equitable than what we’re currently doing.”
The Center School District could get an extra $1.8 million if the amendment passes, which bumps up its funding by 40 percent. Per-student funding at the school district is expected to grow 32 percent to $9,937.
The new law would address concerns around Amendment 23, which calls for annual increases in K-12 funding tied to inflation. SB213 would instead earmark 43 percent of the state’s general fund for education, which proponents say would both protect education funding and also avoid crowding out the rest of the budget.
It also provides a reserve fund of $600 million, accrued from the first year of new tax revenues, that could mitigate cuts in lean years.
“If the budget drops again, you have padding to protect K-12,” said Johnston, “which both protects K-12 and prevents K-12 from eating the rest of the budget.”
Critics such as former state legislator Norma Anderson, the Jefferson County Republican who carried the last school finance act in 1994, contend that the 43 percent would not sufficiently fund K-12 education under the law and that base funding would need to come from the remaining budget.
The new law would include money to advance existing but unfunded reforms. Professional development money would augment the educator evaluation system passed in 2010 and put into effect this school year. Other dollars would address early-literacy development mandated by last year’s passage of the READ Act and implementation of the Common Core State Standards.
Another major change would be the mechanism for counting students for funding purposes. The current one-day count near the start of the year would be replaced by a year-long tally that would effectively transfer per-pupil funding if a student changed schools.
Opponents such as Bob Hagedorn, a former Democratic state legislator from Aurora, see the measure as a “missed opportunity” for reform, even though it does contain money to help charter schools.
“I don’t think it’s enough of a step forward,” said Hagedorn, who characterized the charter school enhancements as simply a means to quell political opposition to the tax increase. “It’s much better than the status quo. But on the other hand, they could’ve done a lot more.”
Far from perfect
Van Schoales, CEO of A+ Denver and the outgoing president of Colorado League of Charter Schools, said that while the measure remains far from perfect, it does offer major reforms.
Under the new law, the Charter School Institute would get funding equal to the average of what school districts are spending on mill levies. Charters could leave school districts that are not sharing their mill levy dollars and sign on with CSI. The law designates $18 million for charter capital construction.
“What ended up in Amendment 66 will be the best school finance law for charter schools in the country,” Schoales said.
Some districts would see less return on their tax investment than others.
The Douglas County School District would get nearly $52 million, an increase of about 14 percent. The district’s per-pupil funding would grow by more than 9 percent to $6,995, according to state estimates.
Board members of the Douglas County School District voted unanimously to oppose the measure. They argue that residents in Douglas County will be paying an additional $90 million to $100 million in taxes, but the district will get only $50 million in extra funding.
“Fundamentally, the issue from our point of view is that we’re going to pay a dollar, and the state, after it processes it, will send 50 cents back to us. We think that’s a bad deal,” said board member Doug Benevento, who is seeking re-election.
Denver Public Schools Superintendent Tom Boasberg defended the system of doling out education dollars. He said if the amendment failed, districts with low property-tax wealth would be left behind.
“The rich will get richer and poor will get poorer,” Boasberg said. “Denver actually has significant property wealth, in part because of its commercial property, but for other poor communities like Commerce City, Greeley, Mapleton and Aurora, they are the ones who would suffer really badly.”
Boasberg said the additional funding is critical to closing the achievement gap between white children and minorities, and between poor students and their more affluent counterparts.
Kevin Simpson: 303-954-1739, or ksimpson@denverpost.com
Amendment 66
Below are estimates that show how the state’s six largest school districts will fare if voters approve Amendment 66 in November.
Adams 12 Five Star
Funding before Amendment 66: $272 million
Funding after Amendment 66: $309 million
Funding change: $37 million
Percent change: 14 percent
Per Pupil before Amendment 66: $6,463
Per Pupil after Amendment 66: $7,076
Per Pupil Change: $613
Percent change: 9.5 percent
Aurora Public Schools
Funding before Amendment 66: $262 million
Funding after Amendment 66: $325 million
Funding change: $63 million
Percent change: 24 percent
Per Pupil before Amendment 66: $6,933
Per Pupil after Amendment 66: $8,104
Per Pupil Change: $1,171
Percent change: 17 percent
Cherry Creek Schools
Funding before Amendment 66: $336 million
Funding after Amendment 66: $371 million
Funding change: $35 million
Percent change: 10 percent
Per Pupil before Amendment 66: $6,576
Per Pupil after Amendment 66: $7,016
Per Pupil Change: $440
Percent change: 7 percent
Denver Public Schools
Funding before Amendment 66: $561 million
Funding after Amendment 66: $693 million
Funding change: $132 million
Percent change: 23 percent
Per Pupil before Amendment 66: $7,045
Per Pupil after Amendment 66: $8,131
Per Pupil Change: $1,086
Percent change: 15 percent
Douglas County School District
Funding before Amendment 66: $399 million
Funding after Amendment 66: $451 million
Funding change: $52 million
Percent change: 13 percent
Per Pupil before Amendment 66: $6,388
Per Pupil after Amendment 66: $6,995
Per Pupil Change: $606
Percent change: 9.5 percent
Jefferson County Public Schools
Funding before Amendment 66: $523 million
Funding after Amendment 66: $594 million
Funding change: $71 million
Percent change: 14 percent
Per Pupil before Amendment 66: $6,486
Per Pupil after Amendment 66: $7,112
Per Pupil Change: $627
Percent change: 10 percent
Source: Colorado Department of Education, Colorado Legislative Council and Denver Post calculations
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