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Lawmakers not hopping aboard Ritter ed plan

Committee to debate legality, feasibility of property tax proposal

Published March 15, 2007 at midnight

Gov. Bill Ritter's proposal to curtail property tax reductions to fund public schools met with skepticism Wednesday from some lawmakers who wonder how they'll explain it to voters.

Even a member of Ritter's Democratic Party questioned the legality - and political feasibility - of mandating higher taxes without going to the voters.

"Explain to me how this is not a constitutional problem - because taxes will go up for somebody, whether it's the homeowner or the business or whomever," said Sen. Ron Tupa, D-Boulder. "How do we get by that?"

Tupa added, "We're going to have to talk to our constituents in a way that's going to be explainable."

Tupa's comments came as the Senate Education Committee heard testimony on Ritter's proposal. The proposal is being offered as an amendment to an annual school finance measure, Senate Bill 199, by Sen. Sue Windels, D-Arvada, the Education Committee chairwoman.

The measure is scheduled for a committee vote at 1 p.m. today.

Tupa - potentially a swing vote if Republican panel members reject the proposal - said he still doesn't have enough information to know if the idea is legal.

Colorado schools are supported by a combination of local property taxes and state aid.

Local revenue is declining under a 1994 school finance law, which reduces the rate at which property is taxed.

The declines have been offset in school budgets by more state dollars.

That can't continue, Ritter said Tuesday.

By 2011-12, the portion of the state budget that supports schools will be $100 million in the red, he said.

Under his proposal, property tax rates - which vary widely among the 178 school districts - will be frozen at current levels. Eliminating the rate reduction would yield an estimated $65 million per year of additional revenue for schools.

Although the tax rate would be frozen, the dollar amount homeowners pay would go up as the assessed value of their property increases.

A 1992 state constitutional amendment, called the Taxpayer's Bill of Rights, or TABOR, forbids tax increases without a vote.

That amendment doesn't apply if taxes go up because of higher property values, Ritter contends.

Sen. Josh Penry, R-Fruita, said, "The truth is, people will pay more taxes if this passes."

Windels noted in response to concerns by Tupa and Penry that voters in most school districts have already approved resolutions suspending key portions of TABOR. The Ritter proposal alters only the 1994 school finance law, not TABOR.

Example

If current law stays the same, the school property tax rate in Denver will be reduced to 23.688 mills. Under Gov. Ritter's proposal, the rate would be frozen at its current level, 25.541 mills.

The frozen rate produces a tax that's $14.75 higher per $100,000 of assessed valuation than if the rate were reduced.

On a $300,000 house, the difference would come to $44.25 annually. The tax could go up more if the house was assessed at a higher value.Source: Legislative Council Staff

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