Take an in-depth look at the latest study from the Colorado Futures Center at Colorado State University with a question and answer session with the study researchers, Charles Brown, Director, and Dr. Phyllis Resnick, Lead Economist at the Colorado Futures Center at CSU. Read more about the study, published by the Lincoln Institute of Land Policy, a nonpartisan think tank.
Q: Why did you do this study?
A: Our previous work on fiscal sustainability suggested that certain provisions of TABOR were distorting the distribution of school property tax burdens. We did this follow on research, supported by the Lincoln Institute of Land Policy, to further study those distributional effects.
Q: Did you find that provisions in TABOR are in fact causing distortions to school property taxes?
A: Yes. We found that property taxes for schools have become more unequal and regressive since the passage of TABOR. Additionally we found that Coloradans in 74 school districts (approximately 81% of the state’s population) are paying higher school property taxes because of the distortions caused by two of TABOR’s property tax provisions.
Q: How is it possible that TABOR could result in 81% of Coloradans paying more in school property tax?
A: The issue is one of distribution. To come to this conclusion we assumed that the amount of state aid going to school districts remained constant. Then we examined how that state aid would be redistributed differently if TABOR’s property tax provisions (particularly the property tax revenue and mill levy limits) had not significantly and permanently driven down mill levies in certain districts.
It turns out that many of the districts most significantly affected by TABOR’s property tax revenue limit also, over time, received increasing amounts of state general fund support for their schools. If TABOR had not driven down the mill levies in those districts, more state aid would be available for the remaining districts, thus allowing them to have lower school property taxes. In total, this applies to 74 of the state’s school districts (containing 81% of the state’s population) which face property tax rates that are higher than they would be if TABOR’s provisions had not driven down rates in select districts elsewhere in the state.
Q: Does this report mean that you think TABOR should be repealed?
A: No. TABOR has many different limits that apply to the state, local governments, and school districts. Our report focuses on the combined impact of two of TABOR’s limits on school district property taxes. We believe these limits should be changed in order to address the distortions in property taxes for schools. In this research, we did not study any of the other limits contained in TABOR and thus are not saying all of TABOR in its entirety should be repealed.
Q: Did your study look at school funding from all sources, including fees and federal aid?
A: No. We primarily looked at the property tax levies and the state aid used to pay for school funding under the state’s school finance act. These two sources comprise the vast majority of operating funds for schools and are the funding sources subject to the distortionary forces we were studying.
Q: Does your study examine the impact of school finance property tax limits on the growing burdens on the state General Fund and State Education Fund?
A: No. This study examined only on the distribution of school district property taxes; total funding levels and the implications of the growth of state aid for schools were not the focus. However, in our on-going research into state fiscal sustainability, we do study the impact of changes in school property taxes on the state budget.
Q: Isn’t it true that without TABOR, much more state aid would have been spent on schools?
A: Not generally. During our 25 year study period, TABOR limited state spending only 5 times — for each of the fiscal years from 1996-97 through 2000-01. During the other 20 years of the study period, state General Fund and State Education Fund revenue growth were limited by the availability of state revenue. Weak revenue growth or revenue declines resulting from the two recessions occurring during the early and late years of the last decade had a far greater impact on limiting state funding for schools than did TABOR.
Q: So then what was TABOR’s effect on overall school funding during your study period?
A: More than anything else, TABOR served to distort the distribution of school district property tax burdens statewide.
Q: Does TABOR mean something different in each district?
A: No and yes. First, the provisions of TABOR apply uniformly to all districts, so in a sense TABOR means the same thing to every district. On the other hand, each district embodies a unique set of circumstances regarding their tax base changes, enrollment fluctuations, local economic dynamics, and the manner in which they have received voter approval to “de-Bruce.” So, while TABOR means the same thing to all districts, it affects them very differently.
