Spliting the pie

Should Colorado charter schools get a share of local tax increases? Some Colorado lawmakers think so.

PHOTO: Nicholas Garcia
Students at the AXL Academy charter school in Aurora work on math problems in 2015.

Teachers at the Ricardo Flores Magón Academy charter school in Westminster have been forced to take four days of unpaid leave to help balance this year’s budget.

The office manager is rationing paper because of a budget that is on “a shredded shoestring,” as school leader Kaye Taavialma puts it. If the vacuum breaks, Taavialma doesn’t know how she’ll replace it.

Such financial challenges are not unusual at many charter schools in Colorado, and yet another attempt to share more local tax revenue with charters is scheduled to get its first legislative test Thursday. (UPDATE: The education committee will take testimony on the bill, but will likely not vote until next week.)

Senate Bill 61 would require the state’s school districts to share a portion of locally approved tax increases with charter schools, which receive state funding but operate independently of the traditional school district system. The combined total school districts would be required to send to the state’s charter schools according to a legislative report: $94.4 million.

The potential impact on districts — and traditional district-run schools also feeling a budget pinch — makes this one of the most hotly contested education bills on this session’s agenda.

The bill, sponsored by state Sens. Owen Hill, a Colorado Springs Republican, and Angela Williams, a Denver Democrat, also requires lawmakers to find as much as $13 million to send to charter schools authorized by the state.

Supporters of the bill frame the issue around equity. They say that for too long, the state’s school districts have failed in providing fair funding to charter schools, which educate more than 108,000 Colorado students — many of them Latino and from low-income homes.

“Sadly, many school boards are saying we’re not going to fund our student fairly and equally,” Hill said in a recent interview. “It’s our job to rectify it.”

But critics of the legislation say the issue is a local one, and that such a mandate would thwart the will of the voters who approved the tax increases, known as mill levy overrides.

“The biggest issue is that boards of education make a contract with voters when they pass a mill levy,” said Matt Cook, director of public policy and advocacy for the Colorado Association of School Boards. “I think local school boards pass those mill levies often consulting with charters. This bill is an attempt for a one-size fits-all and there are 178 stories out there in Colorado.”

Mill levy overrides have become an increasingly popular way to supplement school districts’ budgets as the state has not made significant headway in closing a $830 million school funding shortfall.

School districts may ask voters to increase their property taxes to fund specific programs such as after-school tutoring or teacher training. Under current state law, school districts are not required to share the funding with charter schools.

The proposed legislation only mandates that districts share revenue if charters have comparable programs to what voters approved. For example, if voters approved a tax increase to provide free full-day kindergarten, a charter school can only get a portion of that money if it offers full-day kindergarten.

According to an estimate by the Colorado League of Charter Schools, 11 of the state’s 178 districts equitably share their overrides with charters.

This isn’t the first time the issue has been debated.

Last year, the Republican-controlled Senate passed with bipartisan support a similar bill introduced by Hill. But a committee in the House, controlled by Democrats, spiked the bill.

The legislature is split along the same party lines this year. But Hill said he has hopes that a new crop of lawmakers and leadership in the House could provide a lifeline for the bill.

One freshman lawmaker who could be influential in the bill’s debate is Rep. Jeff Bridges, a Greenwood Village Democrat. Bridges was endorsed this fall by Democrats for Education Reform, a political nonprofit that advocates for charter schools.

If the bill is assigned to the House Education Committee, which Bridges sits on, he could provide the necessary vote to advance the bill.

Bridges said he has not yet read the legislation.

“I’ll take a close look at the bill when it comes to the House,” he said in a text message. “Whatever happens with the bill, charters and districts should work together to make sure every kid gets a great education.”

Speaker Crisanta Duran, a Denver Democrat, has also not made her position on the legislation publicly known. In an interview before the session, she said that she was focused on the “big picture” of school funding.

A new wrinkle in the debate this year will be shrinking revenue from property taxes.

By one estimate, property taxes that pay for local schools — both district-run and charter — could shrink by as much as $136 million. That means the state must make up the difference, or schools across the state will be faced with making drastic cuts.

Cook, of the school board association, said the group’s position on the bill does not mean its members are anti-charter, but that all schools need more money and the forecast for the next school year is creating uncertainty.

“Charter schools very well may need more money. Neighborhood schools need more money,” he said. “The system of funding just doesn’t work right now.”

Hill acknowledges the state’s funding system is flawed. He’s part of a group of lawmakers working on reforming the way schools are paid for. But he said he believes lawmakers are a few years away from reaching a compromise, and charter schools should not have to wait.

“It’s time for us to put a stake in the ground and say, ‘Whatever public school you go to we’re going to treat you fairly and equally in that region,’” he said.

Funding fight

In Education Secretary Betsy DeVos, Colorado’s teachers union finds a useful face for the opposition

PHOTO: Department of Education
U.S. Education Secretary Betsy DeVos.

The Colorado Education Association, the state’s largest teachers union, is working to fuel opposition to a bill that would boost charter school funding by associating it with U.S Secretary of Education Betsy DeVos.

The union on its Facebook page published an image of DeVos and branded Senate Bill 61 as a “Betsy DeVos-Style Privatization Bill.”

The bill, which has bipartisan sponsors in both chambers, would require school districts to equally share money from local tax increases with charter schools. It was recently approved by the state Senate — but not without a fierce fight from a bloc of lawmakers who taught in district-run public schools.

The union isn’t the only group using DeVos’s image to oppose legislation making its way through the statehouse. A new political nonprofit, Colorado Children Before Profits, launched its own website linking DeVos and President Donald Trump to the charter school funding bill, and two other bills that would change the way Colorado funds schools.

DeVos, a Michigan billionaire who has long supported charter schools and vouchers for private schools, became an unexpected political lightning rod early in Trump’s administration.

PHOTO: CEA/Facebook
The Colorado Education Association posted this image to its Facebook page earlier in March.

In Colorado, the union and a group of parents protested outside U.S. Sen. Cory Gardner’s downtown Denver office, urging him to oppose her confirmation. Gardner ultimately voted to confirm DeVos.

DeVos has no formal role in the push for Senate Bill 61, which soon will be considered by the state House of Representatives.
But “there’s a natural tie,” argues Kerrie Dallman, CEA’s president.

“Betsy DeVos has long been connected to the movement to radically expand charter schools, as well as grow education vouchers and tax credits,” Dallman said. “We’re concerned because there is so little accountability in that movement, and a lack of transparency.”

Luke Ragland, president of Ready Colorado, a conservative education reform organization, said the union’s use of DeVos is “typical D.C.-style politics.”

“The teachers union’s latest propaganda campaign is shameful,” Ragland said in a statement. “They are spreading demonstrably false information in an attempt to politicize an issue that has had longtime bipartisan support in Colorado. Senate Bill 61 is a uniquely Colorado solution, supported by local leaders in both parties.”

The perennial debate

How the heck does Colorado fund its schools? (And six other money questions you might be embarrassed to ask.)

PHOTO: Nicholas Garcia
A high school student at Vista Peak Preparatory works on a computer during an engineering class.

Since public schools were founded, arguments have raged over how to pay for them.

In Colorado, it’s one of the perennial debates that gets the best of lawmakers, lobbyists, school leaders and advocates every year. Further frustrating things, lawmakers can only do so much because constitutional amendments lock in much of the state’s budget.

It’s no chump change: More than $6 billion in Colorado tax money goes toward schools.

As Colorado lawmakers get to work on crafting the state budget, here are some questions and answers about how the school funding system works in the Centennial state.

How the heck does Colorado fund its schools?

Colorado funds its schools from two major sources of revenue.

The first pool of revenue is called the “local share.” This money comes from local property taxes on homes and businesses. The second pool is the “state share.” This revenue comes from income and sales taxes.

PHOTO: Sarah Glen
Over time, the state has had to increase its contribution to the state’s schools.

Historically, schools received about an equal share of their funding from the local and state shares. However, for a variety of reasons, the state has had to dramatically increase its contribution to schools during the last two decades.

Many schools, especially those that serve large populations of at-risk students, also receive federal money.

What about marijuana taxes? Aren’t schools seeing a windfall from recreational sales?


The first $40 million of tax revenue collected from marijuana excise taxes — a wholesale tax — goes to a special fund to help school construction. That doesn’t go very far.

However, given a tightening state budget, Gov. John Hickenlooper has suggested increasing taxes on pot to help fund school operations. Lawmakers haven’t been keen on that idea.

Does every school district get the same amount from the state?

No. Lawmakers use a funding formula to determine how much money each school district gets. The formula, which was written in 1994, takes in a variety of factors including student enrollment, the district’s cost of living and how many at-risk students the district serves.

The large suburban district in Douglas County received $7,050 per student this year. Thirty-four percent came from local taxes, while the state picked up 66 percent of the cost.

The smaller Mapleton school district in Adams County, which serves a large Latino population, got $7,303 per student. But only 24 percent came from local property taxes, while the state kicked in 76 percent of the cost.

The tiny Aguilar school district in southeastern Colorado received $13,600 per student. The locals pitched in 25 percent and the state took care of the rest.

What determines the size of the local share?

School boards have no say in how much local property taxes contribute to their funding. That’s left to a complicated constellation of constitutional amendments and state law.

First there’s the Gallagher Amendment. Adopted in 1982, the amendment requires the state to maintain a 45 percent to 55 percent ratio ratio between the revenue collected from personal property and business property. When home values go up, the state is required to drop the percent on which property can be taxed. In 1980, the rate was 21 percent. In 2013, it was 7.98 percent. That means a smaller proportion of a home’s actual value can be taxed by school districts.

The second constitutional amendment in play is the Taxpayer’s Bill of Rights, or TABOR. Approved by voters in 1992, TABOR puts a cap on how much revenue the state and local governments can collect from taxpayers. It also requires governing bodies to seek permission from voters before increasing taxes.

While all but four school districts have received voter approval to keep excess tax revenue, lawmakers have put two key restrictions on school districts.

First, school district property taxes can only increase by inflation and enrollment growth. When that revenue exceeds the limit, school districts must reduce their tax rates. And because of TABOR, once the tax rate is lowered by statute, it can’t be raised without voter approval.

(If you want to sound super-smart at your next PTA or school board meeting, this is known as the “ratchet effect.”)

Lawmakers put an additional check on school districts in 2007 when they put a statewide cap on school districts’ tax rates.

What determines how much the state is supposed to kick in?

While there are two amendments that put restrictions on how the state can generate revenue to fund its schools, there is another Constitutional amendment that spells out how the state is supposed to spend that money.

Amendment 23, approved by voters in 2000, did a few things, but two points are still relevant today.

First, Amendment 23 requires the state to increase funding based on population growth and inflation. Second, it created the State Education Fund, an account lawmakers are relying on more heavily to pay for schools. It is financed by one-third of 1 percent of federal taxable income that is exempt from TABOR limits.

Wait, if lawmakers are required to increase funding each year, why does the state have an education funding shortfall?

During the Great Recession, when lawmakers were forced to slash hundreds of millions from the state budget, they argued that Amendment 23 only covers “base funding,” or the average every school district receives per pupil.

The amendment, they argued, doesn’t govern the additional money districts receive to compensate for size, at-risk students and other factors.

So in 2010, lawmakers created “the negative factor,” a new tool they could use to make across- the-board cuts to school funding after all other factors (size, at-risk students, cost-of-living) are taken into consideration.

As part of a compromise, lawmakers are required to report how much money they’re not giving to schools based on that legislative tool.

A lawsuit challenged the negative factor. But the state Supreme Court ruled in favor of lawmakers.

So while a large portion of funding must increase every year, lawmakers have places to cut education in a pinch. The current shortfall is at $828 million, down from a $1.01 billion in 2013.

Didn’t a bunch of school districts just pass tax increases?

Yes, and according to some, that’s making the situation worse.

As the state’s finances have squeezed, some school districts have turned to local voters to ask for more local revenue. These tax increases, known as mill levy overrides, exist outside of the state’s school funding system. The more voters approve doesn’t lessen the state’s burden.

There are some school districts like Boulder, Denver and Cherry Creek that have generated millions of local revenue but are still getting their equal share from the state. Meanwhile, districts like Greeley, Pueblo and Sheridan have never been able to convince their voters to approve a tax increase. That means they have to get by with whatever the state gives them.