DENVER | Colorado lawmakers, who are meeting next week for a special session on property taxes, have received a clear message from the governor and others: Protect funding for K-12 and higher education, or we won’t be happy.

The special session, the second called by Gov. Jared Polis in less than a year to focus on property taxes, is designed to prevent two controversial ballot measures. Initiative 50 would limit annual tax growth statewide and Initiative 108 would cut property taxes by about $3 billion by 2025, with even bigger cuts in subsequent years, according to state fiscal studies.

A conservative group announced that the bills would be removed from the November vote if lawmakers agree to a compromise that will be on the table at the special session.

Given last year’s major progress in boosting K-12 funding and multi-year increases in higher education budgets, there are concerns on both sides that the two ballot bills would hurt education funding.

If voters approve the bill, it would almost certainly also delay the implementation of a new, long-awaited funding formula for K-12 schools that was introduced earlier this year.

Most state and local services in Colorado are funded by property taxes, so large losses in property tax revenue could lead to cuts in many services, including education. The impact of the two ballot bills would be so severe that many supporters see a special session as a safer way to protect education funding – even if it means tax cuts – than voting on the bills.

The proposal, which lawmakers are expected to consider, would cut taxes by $255 million next year.

“Both of these measures would have catastrophic consequences for the entire state government, including education,” said Riley Kitts, vice president of government affairs for the Colorado Children’s Campaign.

Polis: Special session must protect schools

The initiatives are part of an ongoing battle over property taxes following the repeal of the Gallagher Amendment, which limited the tax rate by maintaining a separation between residential and business taxes. Since the law was repealed, homeowners have faced rising tax bills and lawmakers have tried to provide relief.

Initiative 50 proposes a constitutional annual cap of 4% on the state’s total property tax revenues. This would reduce tax revenues by $115 million in fiscal year 2025 and by up to $1 billion in the third year.

Initiative 108 would lower assessment rates for private and commercial properties and require the state to compensate county governments for lost revenue.

More than 50 interest groups described the initiatives as “a real threat to all communities” in a letter dated August 12.

“These measures would result in cuts in funding for education and higher education, fire departments, emergency services, libraries and other essential community services,” the letter said.

Polis called the special session several days later and stated that school education and higher education were top priorities.

“We are focused on saving Coloradans money on property taxes while protecting school funding and higher education, preserving our economic competitiveness and avoiding risky ballot measures,” Polis said in a press release. “The cost of inaction is too high. We refuse to gamble with our schools, our economy and our future.”

Lawmakers have voted for higher education spending

The compromise that lawmakers will consider during the special session would keep education funding at current levels, Kitts said.

During this year’s regular legislative session, which ended in May, lawmakers paid off the budget stabilization factor that caused the state to withhold money from schools for 14 years to fund other priorities. This year, the General Assembly eliminated that practice.

They also revised the state’s school funding formula for the first time in 30 years – a project that had taken more than a decade to prepare.

The new formula significantly increases funding for rural districts and districts that serve large numbers of low-income students and English language learners. To fund the formula, it calls for a $500 million increase in funding over the next few years, or about $83 million per year. The new formula will take effect in the 2025-26 school year.

Lawmakers also increased higher education spending by $134.9 million, an increase of about 10 percent. This increase comes on top of several years of strong increases for colleges and universities and for federal student aid.

This progress is threatened by the referendums, said Kitts.

“If these ballot measures pass, it will be almost as if the entire legislative session never happened,” he said. “We will not have a new funding formula and will have to reinstate the budget stabilization factor. We are very afraid of that.”

Supporters of education funding hope for compromise

Not everyone agrees with this view.

Brenda Dickhoner, president and CEO of the conservative education group Ready Colorado, is convinced that the state could increase funding for schools if the measures are passed in November.

However, she acknowledges that the measures would delay the introduction of the new formula that her organisation supports.

“Our top priority is to ensure that the new public school funding formula is implemented as planned,” Dickhoner said.

The new formula includes a provision that stops its implementation if the state does not raise enough tax revenue. That trigger is a safeguard in case of an economic downturn. But Initiatives 50 and 108 would reduce taxes enough that the trigger would go into effect, she said.

Higher education officials are particularly concerned because college and university budgets have been easily affected by cuts in the past. On Tuesday, for example, Fort Lewis College’s board of governors voted on a resolution opposing the ballot measures.

During times of economic recession, higher education is often one of the first areas where states cut back because colleges and universities can make up for lost state funds by raising tuition fees. However, this could affect enrollment numbers and students’ decisions to pursue higher education.

“Such significant federal budget cuts could result in drastic cuts in funding for essential services and higher education, reminiscent of the effects of the Great Recession,” the Fort Lewis resolution states.

Kevin Vick, president of the Colorado Education Association, expressed hope for a compromise during the special session. He said the union would remind lawmakers of their responsibility to education.

Kitts expressed his hope that parliamentarians would reach a compromise, as the alternative to a compromise did not look promising.

“Colorado has a long history of being pretty anti-tax and often votes to cut taxes even when it’s against their own interests,” Kitts said. “And that’s ultimately what scares me here.”

Jason Gonzales is a reporter covering higher education and the Colorado Legislature. Chalkbeat Colorado partners with Open Campus to cover higher education. Contact Jason at [email protected]. Chalkbeat is a nonprofit news site covering educational changes in public schools.

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