Educators says state can't pay the bill if property taxes cut

Carol McGraw and Kristina Iodice
The Gazette

A trio of ballot measures has so frightened and upset educators that they have stepped away from their white boards and into the gritty political arena to try to defeat them.

It's a rare concerted effort by academia.

"It would have a horrific effect on schools and government services. The state would come to a standstill," said Brad Stauffer, spokesman for Colorado Association of School Boards, which represents 174 districts.

CASB opposes Amendments 60 and 61 and Proposition 1010, and sent generic resolution forms to help school boards join the chorus of opposition.

Across the Pikes Peak region and the state many school boards have done just that. As public servants they must walk a fine line in campaigns. But they consider it a policy issue and say the stakes are too high to keep silent.

A Colorado Legislative Council study estimates the state will lose $2.1 billion in revenue each year under 60, 61 and 101, and would have to increase K-12 education funding by $1.6 billion annually. That would mean it would take up to 99 percent of the state's general fund to pay for the constitutional and statutory requirements of K-12 education, the study says.

Once schools are funded, there would only be about $38 million left to run everything else in the state, according to Citizens for Effective Government.

If Proposition 101 is enacted, the Bell Policy Center says ownership taxes for funding El Paso County schools would decrease from $30.5 million to less than $500,000.

If the measures pass, there could be dramatic declines in budgets and possible layoffs of 8,000 teachers, according to Colorado Strategies.

Class sizes would jump, busing would be curtailed, fees for athletics and other activities would skyrocket, and schools could close, according to activist organizations and educators.

The Cheyenne Mountain School District 12 board recently wrestled with whether it should take a stand on the measures. Vice President Philip DeVries noted that a handful of school boards called their position a "resolution of concern," instead of the more strongly worded "resolution of opposition."

"I'm opposed to the notion of taking political stands, but this really hits home," DeVries said.

The board fears the measures would weaken local control of district finances. The board voted unanimously to oppose the measures using the stronger "opposition" phrasing.

Stauffer, the CASB spokesman, notes that under the state Fair Campaign Practices Act, boards and their members can legally pass such resolutions.

School districts can't use resources to advocate a position. However, if administrators are asked, they can explain how an issue impacts their district or give personal opinions. They can't campaign on school time.

D-12 superintendent Walt Cooper, like some others, has taken annual leave to speak about how the measures will effect schools. "I'm keeping a log to verify everything," he said.

Statistics and financial figures describing the measures' impacts abound and are often at odds. And therein lies one of the difficulties that voters must face as they wade into the complexities of school finance laws, mill levies, bonding and the effects the 1992 Tabor amendment has had on government spending.

Educators worry that the complex measures are enticing to voters during tough economic times because of the words: "tax cut."

"I can see where on the surface it would be appealing. ‘Oh, look, I'll save money on my car registration.' It even sounds good to me," says Joanne Vergunst, assistant superintendent of Fountain-Fort Carson School District 8. "But the reality is that if these pass, it would have a crippling effect on schools and all state government and people would pay more in the long run."

Opponents of Amendment 60 are concerned "that statewide votes can nullify local property tax votes," said Natalie Mullis, chief economist with the Legislative Council. Amendment 60 would overturn elections between 1992 and 2010 that allowed entities to have money above the TABOR limit, though voters could reinstate the taxes.

Proponents say the measures are misunderstood and the impacts are being distorted. They say the state has enough money to replace the property taxes public schools rely on. They estimate that most families would save $2,000 a year.

But most educators aren't buying it.

The state would have to reduce funding in all other areas by 90 percent to have enough to backfill education costs, said Manitou Springs School District 14 Assistant Superintendent Tim Miller. That would mean closing the transportation department, opening prison doors, and ending required Medicare funding, he said.

Colorado Springs School District 11 Chief Financial Officer Glenn Gustafson said it is "mathematically impossible" for the state to backfill the funds that would be lost. The loopholes that would allow the state to avoid backfilling have been used for years to avoid funding increases mandated by Amendment 23, he said.

Two school districts in the state have preemptive strikes on the ballot to stem the cash flow gap should Amendment 61 pass.

East Grand School District 2 in Granby has a $4 million bond question. If 61 doesn't pass, certificates of participation that will be used would cost the district $250,000 per year from the General Fund.

Park School District R-3 in Estes Park will ask voters to OK borrowing $2.5 million if Amendment 61 passes.

There are 32 other school bond issues on the ballot in November, and district officials believe they will be viable if the debt is entered into before 61 goes into effect in 2011, said Mullis of the Legislative Council.

Colorado Union of Taxpayers Vice President Gregory Golyansky counters that the measures the decrease in the tax burden would keep more money in the private economy, thus fueling economic recovery and expansion.

Most of Amendment 60 will be phased in over 10 years. The income tax reductions of Proposition 101 would take at least 10 years to be phased in, possible more if state revenue did not grow. Vehicle registration fees would decline over four years.

The staggered implementation amid an expanding economy would easily provide the funds to backfill education, Golyansky said.

If more money is needed, governments can make the case directly to voters.

"We're not trying to prevent governments from building roads or maintaining bridges," he said.

Natalie Menten, Colorado Tax Reform campaign coordinator for the three measures, said: "The state will have to find efficiencies."

For the first year, the cut is "very modest," she says - six-tenths of one percent of the $20 billion state general fund. Likewise, she notes, the high interest paid by the state on borrowed funds would go away.

The purpose of the measures is to ensure the state lives within its budget, she said. "Our founding fathers said no to state debt and they have ignored it. They use name games like certificates of participation."

She said that opponents' statistics don't account for potential government growth, which would increase sales tax income. She cited a Harvard study that shows that tax cuts stimulate the economy. This would create new jobs, not take away the 8,000 suggested by some opponents. Revenue growth for the state General Fund would be $110.1 million higher, according to cotaxreforms.com.

Measure proponents consistently emphasized that school funds would be shielded because the state must backfill the money, but Cooper responded: "That's well and good. But the state can't meet its obligations."

Even before the ballot issues emerged, school districts were reeling because of state budget problems.

Colorado currently ranks 42nd in per pupil funding adjusted for regional cost differences, according to Great Education Colorado's website. The state ranks dead last in teacher salaries as a percent of pay in comparable professions.

In 2007, Colorado spent $1,919 less per pupil than the national average, according to Education News Colorado. Neighboring Wyoming spends $7,748 more, New Mexico, $1,452 more, and Kansas $2,285 more.

Those figures don't include last year's 6 percent cut and cuts expected to be the same or worse next school year.

Additional cuts will impact classrooms, and will also hurt teacher recruitment, said Gustafson of D-11.

Paul McCarty, superintendent of Hanover School District 28notes that last year his district closed an elementary school in the round of state budget cuts. "It's constitutionally required for the state to backfill, but the question is, where are they going to get it?" he said.

Districts are placing their budgets under microscopes, but some have yet to predict what they would cut if the measures pass, afraid it would cause panic.

"Of course we would try to keep the doors open, but I am not sure how many of us would survive," says Rick Walter, superintendent of Miami-Yoder School District JT 60.

The three measures would effect school districts differently, because mill levies vary according to budget formulas in the constitution and statute, said Lisa Weil, policy and communications director at Great Education Colorado.

Here are some of the ramifications, according to local educators:

• In District 11, Glenn Gustafson detailed possible cuts if all three measures passed: 10 percent across-the-board salary cuts; cut half of administrative jobs, including tech personnel and plumbers; cut half of nonrequired classes and programs, such as art, music, gifted and sports; staggered closures of six schools (a high school, a middle school, and four elementaries); and add 10 kids to every remaining classroom.

"We could do it, it would be ugly, but is that what we want for our kids?" he said.

• In Falcon School District 49, "Everything is on the table," said Superintendent Bradley Schoeppey.

With 80 percent of the budget in personnel, 300 teachers could be cut, meaning class sizes would increase. Other possible cuts include more portable classrooms and bus cuts or fees.

"How to you continue to operate at a level people expect without any money?" he said.

• Tim Miller of Manitou Springs D-14 said the district is looking at about $3 million in cuts if all three measures pass and the state does not backfill. Cutting most busing, eliminating extracurricular activities such as sports and concerts, reducing capitol projects to the bare minimum and altering food service would save about $1 million. Even with cutting administrators, custodial positions and secretaries, 15 percent to 20 percent of teaching positions would have to be eliminated, Miller said.

"We would have to operate differently," he said, and community input would be sought.

D-14 is leasing 120 Apple laptops. After the final payment, property taxes would have to be reduced by the same amount under Amendment 61, Miller said. If the district wanted to lease new equipment such as copiers, it would have to pay cash, or go to the voters to borrow funds under specific terms.

"We would be in perpetual campaign mode," he said.

• Cheryl Wangeman, assistant superintendent of Lewis-Palmer School District 38, translated the monetary losses in terms of teachers lost, though the district wouldn't necessarily cut there, she emphasized. "It could equal more than 124 teachers out of 263."

Or, the cuts would be the equivalent of closing three elementary schools and a middle school, says Dave Van Ness of Tri-Lakes Chamber of Commerce.

• In El Paso County, schools receive about 70 percent of the ownership taxes, which would be reduced. Calhan School District would receive $2 per pupil instead of $130; D-11 would drop to $6.24 from $402; and Manitou Springs would drop to $6.27 from $428.

• The Cripple Creek-Victor School District RE-1 board did not adopt a resolution about the measures because it did not want to distract voters from the district's mill levy override question on the ballot, said district Superintendent Sue Holmes.

If the measures pass, the mountain district would lose almost half its budget.

"I'm hoping people will see beyond how it effects their personal pocketbooks and see how negative it would be for our school districts and local governments," she said.

• There are concerns about money already obtained and impact on such things as the BEST grants used to rebuild Colorado's crumbling schools. Usually, school districts match the money through bonding.

Amendment 61 would ban the use of certificates of participation, effectively cutting off one way of financing school construction projects, according to the Bell Policy Center. The financing for BEST grants is paid back with future revenues from School Trust lands and the lottery. The center says that there would be no guarantees that, for example, Peyton Middle School would receive the $3 million in BEST grant money it was awarded.

Districts faced with rebuilding and renovation projects such as those at Fountain-Fort Carson D-8, $3.3 million, and Colorado School for the Deaf and the Blind, $10.6 million, would have trouble obtaining financing. "By restricting local borrowing, A61 would also make it harder for districts to raise their own funds," according to a Bell Policy Center report.

In Miami-Yoder, Walters worries that the district's new 71,000-square-foot complex could be foreclosed on if the measures pass. It could happen if the state couldn't pay for the district's nearly $18 million state BEST grant.

"If the state suddenly loses the revenue to pay these loans to the banks, will there be foreclosures on the schools?" Walter asks. "Will my school be closed because the state lacked the revenue to meet the mortgage payments?

"What will the banks that fund many of these projects do with the dozens of school buildings located around the state?" he wonders.

Especially a lone building on the eastern plains.

Who Opposes

Resolutions against Amendments 60 and 61 and Amendment 101 have been passed by numerous education groups, including the State Board of Education, University of Colorado Board of Regents, Colorado Association of School Boards, Colorado Association of School Executives and Charter School Institute Board of Directors.

Area school boards that have passed resolutions against the measures include Academy School District 20, Lewis-Palmer School District 38, Colorado Springs School District 11, Cheyenne Mountain School District 12, Manitou Springs School District 14 and Falcon School District 49.