Content Editor

Welcome to the BVSD Legislative Update, which will be provided throughout the 2017 session of the Colorado General Assembly which convened January 11. Each year, the BVSD Board of Education sets BVSD's legislative priorities for the session. My office directs the lobbying work of BVSD's legislative consulting firm, Policy Matters, LLC. BVSD also works with other PK-12 policy organizations such as the Colorado Association of School Boards (CASB), the Colorado Association of School Executives (CASE), the Colorado Education Association (CEA), and Great Education Colorado, a nonpartisan organization advocating for the benefit of Colorado's more than 800,000 public school students. Addressing Colorado's chronic shortfall in school funding is always on our legislative agenda along with other issues that could impact our classrooms. Each week, my office will send you a link to this page with updates from the State Capitol. If you are not yet on the email list and would like to be, please email BVSD Communications at with your email address and you will be added to the distribution list. 

Friday, Feb. 10, 2017

The property tax puzzle

A year ago higher-than-projected local property tax revenues gave state lawmakers a $133 million cushion that provided much-needed flexibility in crafting the 2016-17 school funding law. That allowed them to shave the negative factor from $855 million to $831 million.

But this year state economists project property tax revenues for schools will drop $165 million in 2017-18, creating a major challenge for legislators as they try to patch together funding for the next school year. Under a plan proposed by Gov. John Hickenlooper, which the legislature doesn’t necessarily have to accept, the negative factor would rise to $876 million.

It seems counterintuitive that the situation could change so quickly in a year, particularly given that home sale prices have risen dramatically in recent years across much of Colorado. You’d think that if the market value of your home increases, your property taxes would rise as well. But that’s not the way in works under Colorado’s complicated set of constitutional provisions on taxation and spending.

A 1982 constitutional provision called the Gallagher Amendment governs property taxes paid on homes and non-residential property. It’s complicated, but the bottom line is that Gallagher basically sets a ceiling by requiring that residential properties provide no more than 45 percent of total property tax revenues. 

To maintain that level when market values rise, the percentage of a home’s value that’s subject to tax has to be reduced. Right now your property tax is calculated on only 7.96 percent of your home’s market value. State analysts estimate that could drop to 6.85 percent in 2017-18.

To make things even more complicated, the TABOR Amendment interacts with Gallagher to permanently drive down many school district tax rates. The effect of those formulas has steadily reduced the local contribution to school funding from 57 percent in the late 1980s to 36 percent now. 

School finance law requires the state backfill costs are not covered by local revenues. Lawmakers are feeling that pressure, and some are looking for a way to increase local district revenues.

There’s an idea floating around the Capitol that would tackle the problem by setting a uniform statewide mill levy in every school district. The mill levy is the factor used to calculate your property tax bill.

Mill levies vary dramatically by district, a result of the combined effects of Gallagher and TABOR. In the late 1980s, before those kicked in, there was a uniform levy of about 40 mills.

Now, some districts have levies as low as two, while others are at 27 (the most allowed by law since 2007). That means property taxpayers in some districts pay a lot less than homeowners in other districts. Supporters of equalization say the current situation raises a significant issue of taxpayer fairness.

A uniform mill levy – depending on where it was set – could increase local revenues and thereby reduce the pressure on the state to backfill school funding.

The idea is being pushed by Democratic Rep. Millie Hamner and GOP Rep. Bob Rankin, both Joint Budget Committee members. The proposal, which hasn’t yet been translated into a bill, would face a lot of scrutiny in the legislature and from education groups. And any such proposal would face a steeper hurdle if it gets through the legislature – approval by voters statewide.