Bill revives fight over mill-levy freeze

A late bill in the Legislature would frustrate school districts that try to boost the share of state money they take in if they lower their local property tax rates.

The measure, Senate Bill 291, revives a provision that had been included in the school-finance measure but was removed in negotiations.

The original provision was considered to be a direct response to the Mesa County Commission, which toyed in public with the idea of putting revenue limits back on School District 51. The commissioners were responding to a Colorado Supreme Court ruling that approved the so-called mill-levy freeze, which was signed into law in 2007.

Plantiffs in the original lawsuit said the mill-levy freeze amounted to a tax increase because it prevented school boards from reducing mill levies as a way to compensate for increased property values.

The intent of the mill-levy freeze had been for local taxpayers would pick up a heavier share of the cost of schools. The state’s general fund, meanwhile, would get a breather from the demands of funding education from kindergarten through 12th grade, allowing it to spend money elsewhere.

Senate Bill 291 would punish school districts where voters reinstate revenue limits in the Taxpayer’s Bill of Rights, or TABOR,  provision to the state constitution. Those districts would receive the same decreased amounts of state aid as they would have before deciding to curtail local tax revenue.

The bill’s sponsor, state Sen. Bob Bacon, D-Fort Collins, didn’t return phone calls.

Mesa County Commissioner Janet Rowland said introduction of the bill “underscores to me that they know good and well that the intentions of the voters were not to freeze the mill levy. My guess is that the voters will make it clear with them when a lot of them come up for election in 2010.”

Reviving the once-discarded provision is “an abuse of power,” said state Sen. Josh Penry, R-Grand Junction.

“Not content with controlling the House, the Senate, the governor’s mansion and the Supreme Court, now my Democratic friends want to dictate local property-tax policy, too,” Penry said. “It’s just one more example of the Democrats in Denver acting like the Republicans in Congress did earlier this decade.”

The high court said that voters in 174 of the state’s 178 school districts approved eliminating revenue limits of TABOR. When those voters acted, they lifted revenue limits for all purposes, the court reasoned.

That, said Colorado Attorney General John Suthers, was wrong. Although there are no legal issues to be raised with the new bill, Suthers said, “It’s just downright unfair and even bad public policy” to punish voters who might want to re-establish revenue limits.

If the TABOR revenue limits were to be reapplied to School District 51 and no additional money came from the state, the district would lose about $2 million, officials have said.

The district has a $158 million spending plan for 2008-09 and is now working on the 2009-10 budget.

Officials are monitoring the legislation, District 51 spokesman Jeff Kirtland said, noting board members have shown no interest in replacing the revenue limits.


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