Senate Democrats Address Inequities in School Funding Formula, Bolster K-12 Education

Bill would fix long-standing property tax issues and strengthen Colorado schools in every community

DENVER, CO - This afternoon, the Senate Education Committee gave bipartisan approval for HB21-1164, a bill sponsored by Education Committee Chair, Senator Rachel Zenzinger and Majority Leader Steve Fenberg, with the goal of securing adequate funding for K-12 education.

“Education funding in our state has long been an issue, and has been complicated by the entanglement of numerous property tax provisions,” said Senator Rachel Zenzinger (D-Arvada). “This bill moves us significantly closer to resolving the structural inequity in Colorado’s property tax system that must be fixed to ensure our schools have the funding they desperately need.”

“All Colorado students and taxpayers deserve a fair share of our public education budget,” said Majority Leader Steve Fenberg (D-Boulder). “Funding our K-12 schools is no easy task, but it’s critical that we find equitable revenue solutions to make sure every student has access to the quality of education they deserve.”

In Colorado, K-12 education funding is largely dictated by the School Finance Act, which in 1988 set a uniform school district mill levy -- a property tax applied based on the assessed value of the property -- so that theoretically, each resident would contribute the same proportion of local property taxes to school funding. 

However, the Taxpayer’s Bill of Rights imposes a cap on school district tax revenue. So between 1994 and 2002, voters in 174 of 178 school districts in Colorado chose to permanently waive TABOR’s revenue limitations (“De-Bruce”) in order to fill in the gaps caused by its arbitrary restrictions on public school funding. Despite those votes, the Colorado Dept. of Education continued to require school districts to reduce their tax rates (total program mill levy) to remain under TABOR’s revenue limits – even though they were legally no longer subject to those limits. There is strong reason to believe that these forced reductions were illegitimate and the source of serious structural inequity.

Due to this error, some property owners pay tax rates that are 16 times higher than that of taxpayers in neighboring school districts on properties of the same value, which forces the state to send disproportionately high state funding to our wealthiest districts, subtracting from what would otherwise be distributed to all districts.

Following the bill’s passage on second reading in the Senate, an accompanying Supreme Court interrogatory resolution will be introduced. The Colorado Supreme Court will then review the state’s authority to align our property tax system with original voter intent, without requiring additional local elections. 

HB21-1164 now heads to the Senate Appropriations Committee for consideration, and should it pass, a full debate by the Senate will take place.