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This Election Day, the Summit School District Board of Education will ask voters to approve a small property tax increase via something called a “mill levy override.” Question 3B and the reasons and issues behind it are complicated, but the simple answer is this: Vote yes. And here's why:
• Plummeting state budget numbers have reduced the district's budget for this school year by about $1.4 million. The district has responded by freezing salaries, cutting some programs and other cost-savings measures to make up for that amount.
• Even after all those cuts, the district is looking at losing another $500,000 in the 2011-12 school year.
• There's a current portion of our property taxes voters approved in 2007 for school improvements that's about to sunset. What the district is asking for is a retention of about a third of that existing mill levy. In other words, if 3B passes, property taxes will still go down relative to 2010 levels, just not by as much (so it is still, in fact, a tax increase and must be presented as such). Here's the breakout on a $400,000 home:
2010 taxes: $667
2011 taxes if 3B is approved: $587
2011 taxes if 3B fails: $551
• We believe the district is managing this crisis wisely, with a host of budget cuts enacted over the past few years. True, it's not an ideal time to ask voters for more money in these difficult times, but nor did our district create this situation. Summit County voters have long supported our schools when needs have arisen, and this appears to be a legitimate, reasonable request to keep our schools from having to endure more cuts. And make no mistake: The next round won't be “fat” — it'll be into the bone.
There are another couple of big wrinkles to this picture beyond the mill levy override (which essentially increases the amount of spending per pupil from 20 percent to 25 percent above the state-mandated figure.) That comes in the form of proposed statewide Amendment 61, which will also be on the ballot. If voters approve this, it will prohibit governments in Colorado (including school districts) from borrowing money without voter approval. Currently, Summit School District is one of a handful in the state that gets nearly all of its revenue via property tax with no additional state funding. But since property tax revenues only come in once a year in spring, the district takes advantage of an interest-free loan program run by the State of Colorado to keep the books balanced. As soon as those property tax revenues start to flow in March, the district pays the state back. This system has worked well for many years at no additional cost to taxpayers.
According to Amendment 61, however, if a government borrows money one year and then pays it back, it must then reduce the next year's budget by the amount of what was paid back. This is one aspect of 61 that almost makes sense: If a government borrows money to, say, build a highway and taxes people more to pay off the debt incurred, then this provision prevents governments from continuing to collect that extra tax after the debt is retired. In the case of our school district, however, this provision means the interest-free mechanism by which we balanced our books will be taken away, resulting in two presumably unintended consequences:
1. The district will have to borrow money on the open market and pay interest, at whatever additional cost to taxpayers;
2. The amount they borrow every year to float the books from one property-tax collection period to the next will be deducted from the following school year's budget.
Got all that? The upshot here is that the school board, rather than rolling the dice and hoping 61 fails , placed language in 3B that asks voters to allow the district to retain that borrowed amount in the budget. In practice, this doesn't represent any additional cost, but because of existing TABOR laws, the district must present it as a potential tax increase. That's why, in addition to the $2.1 million mill levy override, the $3.5 million cash-flow amount must also be included in the overall figure. If Amendment 61 fails, then that whole second part of the ballot question becomes moot.
But wait, that's not all: If two other measures pass in November — Amendment 60 and Proposition 101 — the pictures gets even grimmer for schools. Amendment 60 would, over the next four years, reduce property tax revenues to the schools by 50 percent, including $1.1 million in this school year. Supposedly, these losses are to be “backfilled” by the state, but last we checked, Colorado wasn't exactly swimming in extra cash. Also in 60, any previously approved mill levies — such as the one that provides the district with transportation services and full-day kindergarten — would have mandatory expiration dates after four years. In other words, the schools would have to keep coming back to voters to keep those funds in place.
Proposition 101 has the least direct impacts on the schools, but since this reduction in car registration fees would result in less revenue to the state, we can assume that will impact all school districts as well. Prop. 101 will also result in a direct loss of $1.6 million annually to the district when its cuts are fully implanted after four years.
In the best-case scenario, where 3B passes and 60, 61 and 101 fail, the district's budget will remain nearly flat, requiring no immediate additional cuts. In the worst-case scenario, where 3B fails and the other three pass, our school district will be looking at a 16 percent budget reduction - or some $4.3 million annually phased in over the next four years. That's roughly what it costs to run Summit Middle School. That kind of hit will likely mean school closings and/or consolidations, elimination of entire programs, significant layoffs and other extremely painful measures we're sure most Summit County residents don't want to see visited upon our schools.
It's complicated, yes, but the solution is relatively simple: Vote yes on 3B and no on 60, 61 and 101.
-The Summit Daily Editorial Board consists of Matt Sandberg, Alex Miller, Ryan Wondercheck, Maggie Butler, Jim Ernst and Miles Porter.
• Plummeting state budget numbers have reduced the district's budget for this school year by about $1.4 million. The district has responded by freezing salaries, cutting some programs and other cost-savings measures to make up for that amount.
• Even after all those cuts, the district is looking at losing another $500,000 in the 2011-12 school year.
• There's a current portion of our property taxes voters approved in 2007 for school improvements that's about to sunset. What the district is asking for is a retention of about a third of that existing mill levy. In other words, if 3B passes, property taxes will still go down relative to 2010 levels, just not by as much (so it is still, in fact, a tax increase and must be presented as such). Here's the breakout on a $400,000 home:
2010 taxes: $667
2011 taxes if 3B is approved: $587
2011 taxes if 3B fails: $551
• We believe the district is managing this crisis wisely, with a host of budget cuts enacted over the past few years. True, it's not an ideal time to ask voters for more money in these difficult times, but nor did our district create this situation. Summit County voters have long supported our schools when needs have arisen, and this appears to be a legitimate, reasonable request to keep our schools from having to endure more cuts. And make no mistake: The next round won't be “fat” — it'll be into the bone.
There are another couple of big wrinkles to this picture beyond the mill levy override (which essentially increases the amount of spending per pupil from 20 percent to 25 percent above the state-mandated figure.) That comes in the form of proposed statewide Amendment 61, which will also be on the ballot. If voters approve this, it will prohibit governments in Colorado (including school districts) from borrowing money without voter approval. Currently, Summit School District is one of a handful in the state that gets nearly all of its revenue via property tax with no additional state funding. But since property tax revenues only come in once a year in spring, the district takes advantage of an interest-free loan program run by the State of Colorado to keep the books balanced. As soon as those property tax revenues start to flow in March, the district pays the state back. This system has worked well for many years at no additional cost to taxpayers.
According to Amendment 61, however, if a government borrows money one year and then pays it back, it must then reduce the next year's budget by the amount of what was paid back. This is one aspect of 61 that almost makes sense: If a government borrows money to, say, build a highway and taxes people more to pay off the debt incurred, then this provision prevents governments from continuing to collect that extra tax after the debt is retired. In the case of our school district, however, this provision means the interest-free mechanism by which we balanced our books will be taken away, resulting in two presumably unintended consequences:
1. The district will have to borrow money on the open market and pay interest, at whatever additional cost to taxpayers;
2. The amount they borrow every year to float the books from one property-tax collection period to the next will be deducted from the following school year's budget.
Got all that? The upshot here is that the school board, rather than rolling the dice and hoping 61 fails , placed language in 3B that asks voters to allow the district to retain that borrowed amount in the budget. In practice, this doesn't represent any additional cost, but because of existing TABOR laws, the district must present it as a potential tax increase. That's why, in addition to the $2.1 million mill levy override, the $3.5 million cash-flow amount must also be included in the overall figure. If Amendment 61 fails, then that whole second part of the ballot question becomes moot.
But wait, that's not all: If two other measures pass in November — Amendment 60 and Proposition 101 — the pictures gets even grimmer for schools. Amendment 60 would, over the next four years, reduce property tax revenues to the schools by 50 percent, including $1.1 million in this school year. Supposedly, these losses are to be “backfilled” by the state, but last we checked, Colorado wasn't exactly swimming in extra cash. Also in 60, any previously approved mill levies — such as the one that provides the district with transportation services and full-day kindergarten — would have mandatory expiration dates after four years. In other words, the schools would have to keep coming back to voters to keep those funds in place.
Proposition 101 has the least direct impacts on the schools, but since this reduction in car registration fees would result in less revenue to the state, we can assume that will impact all school districts as well. Prop. 101 will also result in a direct loss of $1.6 million annually to the district when its cuts are fully implanted after four years.
In the best-case scenario, where 3B passes and 60, 61 and 101 fail, the district's budget will remain nearly flat, requiring no immediate additional cuts. In the worst-case scenario, where 3B fails and the other three pass, our school district will be looking at a 16 percent budget reduction - or some $4.3 million annually phased in over the next four years. That's roughly what it costs to run Summit Middle School. That kind of hit will likely mean school closings and/or consolidations, elimination of entire programs, significant layoffs and other extremely painful measures we're sure most Summit County residents don't want to see visited upon our schools.
It's complicated, yes, but the solution is relatively simple: Vote yes on 3B and no on 60, 61 and 101.
-The Summit Daily Editorial Board consists of Matt Sandberg, Alex Miller, Ryan Wondercheck, Maggie Butler, Jim Ernst and Miles Porter.
