Income tax rates would go from flat to “slightly progressive” — for those making more than $150,000 a year — to fund education, under a proposed amendment on Colorado’s ballot.
The local League of Women Voters on Wednesday familiarized Forum attendees with provisions of the “anxiety-inducing” Amendment 73, as well as other measures awaiting their vote in November.
As explained in the nonpartisan League’s literature, Amendment 73 would increase per-pupil funding by 7.8 percent from this fiscal year to fully fund kindergarten and increase funding for special education, gifted and talented programs, English language proficiency, low-income students and schools, and preschools.
“Currently, Montrose schools provide free half-day kindergarten. Tuition is charged for a full day of kindergarten. So that would be the major change to our school district,” LWV member Cheryl Gibson said.
“Also, unfunded mandates for special education are constantly disrupting the funding of education. This (amendment) would provide funds for unfunded mandates.”
The League in its presentation of current ballot measures did not offer a position on any of them. Voters were urged to read the Colorado blue book, or the briefer Colorado LWV’s ballot issues pamphlet for full information, including pro and con statements.
Amendment 73’s provisions would supplement current funding; it would not replace it, although the Legislature can adjust how such funds are spent in the future, in accordance with need.
“Unneeded monies, must, however, remain in a reserve pool for education. So, why have supporters of 73 seen the need for funding in education?” Gibson said.
“Over past 20 years, funding has not kept pace due to recession. … Amendment 23 sought to protect state funds for education. However, the reduction in revenue was so severe that education could not meet funding requirements outlined in Amendment 23.”
As a result, spending for primary and secondary education lags behind the requirements under that amendment.
Education funding under the proposed Amendment 73 would come from changing the state income tax rate of 4.63 percent of federally adjusted gross income by gradually increasing taxes for those making more than $150,000, and from lifting the corporate tax rate from 4.63 percent to 6 percent.
Amendment 73 also reduces non-residential property tax assessments from 29 percent to 24 percent, and changes the rate for residential rate from 7.2 percent to 7 percent.
Per the League, it’s anticipated the statewide residential assessment rate is going to fall to 6.1 percent, due to provisions of the existing Gallagher Amendment.
If Amendment 73 passes, the assessment rate for property taxes for school districts would nonetheless be 7 percent. The amendment also exempts the revenues from the Taxpayers Bill of Rights, or TABOR, a revenue-capping amendment.
The proposed property tax changes would, however, apply only to the assessment rates for local schools; Amendment 73 does not affect the rates for other special taxing districts, such as fire districts and recreation districts.
The measure, if passed, would sunset after 20 years.
A different, local provision, 7A, asks voters to help the Montrose Fire Protection District stave off the ratchet-down effect of the Gallagher Amendment, which is dropping residential assessment rates to 6.1 percent next year.
This local measure has nothing to do with Amendment 73; only with Gallagher, MFPD Chief Tad Rowan said, in response to questions.
Issue 7A asks voters in the district to approve a mill levy increase of 0.429 mills to help the MFPD weather looming revenue loss when the assessment rates under Gallagher drop. The residential assessment rates have plunged from 21 percent, when the amendment went into effect, to 7.2 percent last year, with the 6.1-percent decrease on tap for next year.
The MFPD stands to lose about $270,00 in revenue, even as it calls for service go up.
The fire district received its current mill levy in 2006, which allowed it to build two substations and increase response times and service. It used a 30-year plan, based on historic data that projected a 5-percent annual increase in revenue growth.
Despite cutting back to weather the last recession and despite increased net assessed values last year, the district is still below the 5-percent projection.
The mill levy increase would function as a “neutral tax impact,” because MFPD only wants a method of retaining previously approved revenue. The measure would allow the district revenues to be based on increases or decreases within the district, rather than on such fluctuations on residential assessed value statewide.
Forum attendee Jim Elder asked what 7A would do “when we get our 30 to 40 percent increase in assessment from the county,” what the district is doing to trim its budget and how its reserve funds are used.
“The assessed values increased because property values are increasing. Our long-term financial plan is absolutely based on an increase in assessed values. That’s how we look to see if our budgets are sustainable from year-to-year,” Rowan said.
“You’re right. Sometimes, spikes in assessed value do occur,” he told Elder.
“We saw a 16 percent increase in 2017. That equated to a 3.5-percent increase in revenue for the district because of the Gallagher Amendment, because of the decreased assessment (rate).
“The big thing is that the residential assessment rate is going to fall even further, from 7.2 percent, to 6.1 percent in 2019. … That’s why we’ve got the question on the ballot.”
The MFPD re-established its operational model as the result of the past recession, freezing hires and wage increases, as well as implementing new staffing models.
“We also trimmed operational costs to the bare minimum to keep afloat at that level of service,” Rowan said.
Several chunks of the district’s $2.2 million reserve are spoken for: the amount covers a mandatory TABOR reserve; debt service and reserve operation costs for the first three months of the year, Rowan said.
League presenters during their discussion also summarized hot-button issues on the state ballot this year, including Proposition 112, which would increase the distance of setbacks for new oil and gas developments, in relation to occupied structures.
If Prop 112 passes, any such developments must be at least 2,500 feet away from such structures. “That means places where people live and work,” LWV member Caroline Evans said.
The same setback applies to “vulnerable areas,” which include water sources, schools, playgrounds and public parks, she said.
The re-entry of an old oil or gas well would be considered new development for the purposes of the proposition.
“The pro (statements) say the setback will protect the public health and safety of water sources, our neighborhoods and other high-occupancy areas. The con (statements) say that currently, the 1,000-foot setback from schools is adequate and the 500-foot setback from our homes is also adequate distance,” Evans said, summarizing League information.
Opponents have also characterized Prop 112 as a job-killer beyond the oil and gas industry, and “extreme.” Multiple associations and elected officials have come out against Prop 112, as have both gubernatorial candidates, Walker Stapleton and Jared Polis.
But proponents cite peer-reviewed studies showing elevated cancer risk, respiratory problems, birth defects and low birth weight as being among the negative health impacts associated with being within a quarter-mile of active oil and gas extraction.
They say the proposition will serve to update regulations in a way that addresses new technologies.
Katharhynn Heidelberg is an award-winning journalist and the senior writer for the Montrose Daily Press. Follow her on Twitter @kathMDP.
The League of Women Voters presents information on Colorado ballot measures at noon today, Montrose Regional Library (community room), 320 S. Second St. The presentation repeats at 6 p.m. Oct. 23, at 2 Rascals Brewing, 147 N. First St.
Voters should receive the “blue book” explaining state and local measures in the mail.
Copies of the League’s pamphlet should be available at the meeting, or view www.VOTE411.org for the League’s voters’ guide.
Check your voter registration at govotecolorado.com.
Election Day is Nov. 6.