When Colorado state lawmakers meet next week for a special session to discuss property taxes, some lawmakers and political groups will be focused on one thing: defending school funding.

Earlier this year, lawmakers announced that Colorado, which ranks in the bottom half of states in per-pupil funding, would finally meet constitutional requirements for school funding for the first time since the Great Recession.

Now lawmakers must ensure that this promise is kept.

“We want to make sure that the investments we made last year are fully implemented,” said House Speaker Julie McCluskie, a Democrat from Dillon.

The special session called by Gov. Jared Polis, which begins Aug. 26, will restart long-running negotiations over how the state’s property taxes should be handled. School districts, which are largely funded by local property taxes, generally support the call for a special session but are also watching closely to see if it could affect their support of the state. While lawmakers on both sides say they want to protect promised growth in school funding, the ongoing property tax wars pose certain risks.

Polis called the special session to find a compromise with supporters of two bills that would drastically reduce property tax revenues in Colorado. Supporters have said they will withdraw the bills, Initiatives 50 and 108, if lawmakers agree to further cut property taxes.

Initiative 50 would set a 4% annual cap on property tax revenue growth statewide. As a proposed constitutional amendment, it would require 55% approval of voters to pass.

Initiative 108 would reduce the tax rate used to calculate residential and commercial property, reducing property taxes by an estimated $3 billion. At least some of that tax revenue, which would otherwise go to local governments such as school districts, would have to be replaced by the state.

If a compromise proposal submitted to the state’s property tax commission If the bill passed last week is approved, the state will likely avoid any impact on school funding promises. But if negotiations change or fall apart, the extra money could evaporate before it even reaches schools.

The proposed solution, which builds on a bipartisan property tax bill passed earlier this year, proposes a relatively modest increase in the property tax cuts from previously passed Senate Bill 233 and a slightly stronger limit on tax growth. This new deal, which still needs to be considered by the 100-member House during the special session, would result in over $100 million in additional cuts to school funding.

Senator Rachel Zenzinger, vice chair of the influential Joint Budget Committee, said that amount could easily be replaced in the state budget from the general fund or from the state education fund, which is financed by a 0.33 percent state income tax and has nearly $2 billion in funds.

Both Senate Bill 233 and the proposed deal would, for the first time, require school districts to pay a different property tax rate than other districts.

“The most important thing for me is that we continue to decouple school funding from these decisions,” said Zenzinger, a Democrat who represents Arvada, “because we’ve worked so hard to get here and I don’t want to go back.”

Promises on school funding broken

When property tax revenues collapsed during the Great Recession, the state adopted the budget stabilization factor, an accounting tool that allowed the state to underspend its constitutional obligations to schools.

The funding commitment has since been missed, costing schools $10 billion. But earlier this year, state budget planners approved a budget which finally met the financing needs.

Many school advocates say the effort still does not provide the support that is truly needed.They said it was a step in the right direction.

But if negotiations fail and either Initiatives 50 or 108 pass, the state risks having to reinstate the budget stabilization factor. The measures could also jeopardize a new school funding formula approved this year that promises to distribute more state money to rural schools.

The Colorado Rural Schools Alliance was one of dozens of groups that called for the special session out of fear that their initiatives would be passed.

“The damage would be enormous,” said Michelle Murphy, the organization’s executive director.

Beyond these initiatives, the Colorado Rural Schools Alliance and the Colorado School Finance Project remain concerned about how the state will meet its funding obligations in the future given the ongoing property tax wars.

“The problem is that everyone looks to the state education fund as a source of funding. But how realistic is that in the long term?” says Tracie Rainey, executive director of the Colorado School Finance Project.

Responding to long-term concerns, Zenzinger said that passing Initiatives 50 or 108 posed a much greater risk than resuming negotiations.

“People forget that we have $2 billion in the state education fund,” she said. “We’ll be fine.”

Sen. Barbara Kirkmeyer, a Brighton Republican who also sits on the Joint Budget Committee and sponsored Senate Bill 233, said if the proposed negotiations are approved, she believes the state will not have to return to the budget stabilization factor. Instead, local counties would bear the brunt of the additional property tax cuts.

But negotiations between the two groups over property taxes have proven tough in the past. When bipartisan Senate Bill 233 passed earlier this year, it was hailed as a major compromise between Republicans and Democrats. But the deal fell apart because some felt it didn’t go far enough, prompting supporters of Initiatives 108 and 50 to continue their more aggressive approach.

“Unless other legislation is passed that would increase property tax revenues or property tax rates or something like that,” Kirkmeyer said, “the deal would essentially be no deal anymore.”

Some Democrats have floated the idea of ​​including language in a special session bill that would prevent ballot bills from being used as a factor in future property tax debates. Another idea is to amend the state constitution to allow local districts to levy property taxes. Kirkmeyer said if those ideas were adopted, the deal would be off.

At that point, Democrats would have to fight Initiatives 50 and 108 at the ballot box. It is unclear whether either proposal will gain enough support to pass.