Re-Bruce, Part II

By The Daily Sentinel
Wednesday, April 01, 2009

The Mesa County commissioners apparently spooked Democrats in the Legislature when they talked of school districts “re-Brucing” to make up for the mill-levy freeze.

The Mesa County commissioners alerted us to the fact that they had a plan to get taxpayers in the rest of the state to subsidize their schools. We're not spooked, in fact we expect politicians from Mesa County to look for new ways of getting the rest of the state to subsidize them.

The School Finance Act, introduced in the Legislature this week, includes a provision to penalize school districts that re-Bruce in an attempt to reduce their property taxes. The legislation also includes new student-monitoring requirements for school districts that approve changes related to the mill-levy freeze.

It doesn't penalize the school districts, it just says we won't make everybody else in the state pay more to make up the difference. If people in Grand Junction want to pay less for their schools why should everyone else in the state have to pay more for their schools? If we reward that kind of thing, they'll decide not to pay anything for their schools and we'll have to pay all of it.

It was Colorado Attorney General John Suthers who noticed the measures, buried within the lengthy school finance bill, and alerted the public and GOP lawmakers to them.

Interesting. Colorado's Attorney General sees his jobs as supporting Republican legislators rather than upholding the laws of the state.

Now, Senate Minority Leader Josh Penry is hoping he can strike a compromise with Democrats about the provision.

We hope he’s successful. Voters in school districts around the state should have the option — without penalizing their school districts — of making it clear they never intended to raise property taxes when they approved overrides to TABOR revenue limits.

And there's nothing in the school finance act that would increase their property taxes. This is about what happens when they lower their property taxes. If people in the school district lower the property taxes they pay for their schools, does everyone else in the state have to pay more to make up the difference.

That was the case for years, until the Legislature passed the mill-levy freeze in 2007. It prevented school districts’ mill levies from dropping as their assessed valuations increased. That effectively raised taxes in 174 school districts statewide. The Supreme Court ruled last month that the mill-levy freeze didn’t violate TABOR.

The reasoning here is that not letting people in Grand Junction lower their property tax rates is actually a property tax increase. They say it's an increase because if the value of a person's home goes up, the amount of tax they pay goes up.

Oddly, the Mesa County Commissioners think that's just fine when it comes to paying property taxes to support their county. They just don't like it when it applies to paying property taxes to support their schools. What's the difference? A subsidy. If the Mesa County Commissioners cut their own property taxes, they lose money.

But they were hoping that if they cut their property taxes for schools, we'd force taxpayers in the rest of the state to increase their subsidy of the Grand Junction schools to make up the difference.

In response, the Mesa County commissioners suggested School District 51 should “re-Bruce” — reinstate the provisions that allow the mill levy to drop as the district’s assessed valuation increases.

We argued last week that putting such a question to voters should be a decision of the District 51 School Board, not the county commissioners. And, even though members of the School Board don’t seem inclined to push such an approach, we believe they ought to have the option.

But with language included in the School Finance Act, they would be penalized for doing so.

School funding comes from both local property taxes and the state general fund. The school-finace language says if school districts vote to re-Bruce, they won’t get any additional state funding. Whatever money they cut in local property taxes will be deducted from the school district’s budget.

Is that a radical concept. You cut the taxes you pay so your school district has less money to spend?

Additionally, any school district that votes to re-Bruce would face new requirements for reporting to the state and for boosting student achievement, mandates that other school districts wouldn’t have to meet.

This is something the Senate put into the bill and it does seem unfair. We might take it out in the House.

We’re all for doing things to improve student achievement, but these requirements are clearly punitive, designed to treat school districts differently if they try to overcome the mill-levy freeze.

We don’t think many school districts will try to do that in the current economic crisis. But, with the School Finance Act, the Legislature is telling voters in 174 school districts, “We raised your property taxes without your permission, and we’re going to do everything we can to prevent you from reducing them.”

Not really. The provision they're talking about said that if the voters in a school district voted to let the district keep the money it gets from the existing property tax rate, the district can keep it.

The provision in this year's bill just says that if you lower your property taxes we won't force everyone else in the state to pay more to make up the difference.

That’s not exactly the way to promote trust in government.

Actually, it's exactly the way to promote trust in government.

Bill would keep extra state money from re-Bruced districts

By GARY HARMON/The Grand Junction Daily Sentinel
Tuesday, March 31, 2009

A new school-finance measure before the Legislature would prevent school districts from getting more state dollars by reinstating revenue limits.

Mesa County commissioners discussed the idea of reinstating revenue limits for School District 51 in the wake of a court decision upholding the so-called mill-levy freeze, a legislative device intended to put more weight on local taxpayers in most school districts and freeing up state general-fund money for other purposes.

Since when to county commissioners set revenue limits for school districts. In most places school boards run school districts and county commissioners run counties.

“It’s disappointing that this provision got snuck in,” said state Sen. Josh Penry, R-Grand Junction.

"Snuck in?" The provision was in the bill when it was introduced. How does that quality as sneaking it in?

It’s possible, though, disagreements about the provision can be resolved, Penry said.

The school-finance measure, S.B. 256, includes provisions that will reward schools for improving the test performance of at-risk children and would discourage dropouts by requiring every ninth grader in the state to establish an account with College in Colorado to help them plan for education after high school.

Attorney General John Suthers said he was troubled by the punitive nature of the provision.

“Now that the voters have a chance to cast an informed vote about whether they want to see their property taxes increase, the Legislature wants to punish them if they vote in favor of lower taxes,” Suthers said.

Suthers' legal opinions are truly bizarre -- and get rejected regularly by both the Colorado Supreme Court and the U.S. Supreme Court. His comments on the budget are equally strange.

Here he's saying that if people in Mesa County decide to pay less for their schools, everyone else in the state has to pay more to make up the difference for the schools in Mesa. If we don't, the legislature is "punishing" the people in Mesa for just wanting to reduce their own taxes.

A severance tax retreat

Editorial

By The Daily Sentinel

Monday, March 30, 2009

It seems like only yesterday that state and local elected officials of both parties were trying to determine how best to divide up the embarrassment of riches that was coming from the state’s severance tax which was projected to grow enormously over the coming decade.

That game, too, has changed.

According to financial analysts for the state Legislature, severance taxes on oil and gas production will plummet 80 percent in the fiscal year that begins July 1. Instead of the $250 million collected this year, only $40 million is predicted for next year.

A significant reduction in severance taxes was anticipated, given the dramatic decrease in gas prices nationwide. But few people expected such a precipitous decline.

And, because the severance tax is shared with local governments that are effected by energy development, it won’t be just the state budget that feels the brunt of the tax drop. Communities in Mesa, Garfield and Rio Blanco counties will see a significant drop in revenue from the tax.

Additionally, half of the revenue from severance taxes goes to the Colorado Department of Natural Resources for water conservation and wildlife programs. They, also, will be hurt by the steep drop in revenue.

Severance taxes are paid as oil and gas are produced from wells, so a reduction in the number of drill rigs operating isn’t responsible for an immediate drop in severance taxes. But as fewer wells are drilled, it means less production for the future. That, combined with the steep drop in oil and gas prices, spell long-term problems for Colorado’s severance tax revenues.

There has been considerable debate about the reasons for the drop in drilling in Colorado. We won’t reiterate those arguments here.

But the substantial drop in revenue, the communities and state programs that will be affected by it, show how important the oil and gas industry have become to Colorado.

Hospital fee draws some GOP support

But one Republican calls it "immoral," saying if Dems want it, they must raise taxes.

By Lynn Bartels
The Denver Post

State Rep. Spencer Swalm hammered a bill Wednesday that expands health coverage by imposing a fee on hospitals, calling it "irresponsible and immoral" and a "house of cards."

"We're shifting the costs of our health care problems onto our children, grandchildren and great-grandchildren because we're not willing to man up and raise the taxes that are required to do a pay-as-you-go kind of system," Swalm, R-Centennial, said.

OK, so I know it's wimpy to oppose war. Last year we learned from the Senate that real men cut school funding to pay for more highways (that's when I first heard the term "man up", but this is new: tough guys, and gals I guess, raise taxes?

Several Democrats looked at one another, stunned. Did a Republican just say the "t" word?

"He didn't just say 'taxes'; he said 'man up and raise taxes,' " said Rep. Jack Pommer, D-Boulder.

"I vowed to spend the weekend pumping iron and come in on Monday with a tax increase."

Both Pommer and Rep. Mark Ferrandino, D-Denver, said they were shocked to hear Swalm mention taxes.

"I'm not advocating increased taxes. But if we want a program, we need to pay for it now instead of doing deficit spending," Swalm said afterward, noting that the bill relies on matching funds from the federal government, which is running a deficit.

Apparently there's a distinction here. It's manly to borrow money and run a deficit to pay for war, but girly-manish to use federal deficit spending to pay for health care.

House Bill 1293 would generate an estimated $600 million from hospital fees. The money would draw an equal amount in federal matching funds, and the $1.2 billion total could be used to expand the reach of Medicaid, the Child Health Plan Plus, or CHP+, and indigent-care programs to at least 100,000 more Coloradans.

Not exactly. $600 million of the total goes back to the hospitals to reimburse them for the fee. (You didn't think they were doing this out of compassion, di you?). Another $200 million goes back to hospitals by increasing the amount Medicaid pays them for treating people. The last $300 million will expand the number of people eligible for Medicaid.

The bill passed on a 40-23 vote, with three Republicans — Laura Bradford of Collbran, Don Marostica of Loveland and Tom Massey of Pagosa Springs — joining with Democrats in passing the measure.

The bill now goes to the Senate.