Consumers will pay more to cover business costs of TABOR override
Facts are funny things, when you only have a few of them you often make a different decision on an issue than you would if more were available. Nowhere is this more obvious than in School District 51’s attempt at a mill levy override.
For instance, the figure bandied about by proponents of increasing taxes is that it will only cost about two dollars a week for a $200,000 home. A little thought, however, tells us that every business is going to pass along their tax increase to customers, which brings us to another interesting, but unconsidered fact called the Gallagher Amendment.
I’m not talking about the comedian who smashes watermelons with a big hammer, although that is strangely appropriate. I’m talking about the 1982 amendment to the Colorado Constitution that requires a disproportionate share of property taxes be paid by nonresidential property, especially commercial property.
Under Gallagher, 55 percent of property taxes in Colorado must be paid by owners of nonresidential property such as businesses. You may have noticed that there aren’t nearly as many businesses as there are residences, so to make this calculation work we must set the percentage of the properties’ valuations, on which taxes are paid, at disproportionate levels. Currently in Colorado, that assessment rate is 7.96 percent of actual value for residential property. For non-residential or commercial property the assessment rate is 29 percent of actual value, or nearly four times as much.
So, while it is narrowly true that a homeowner will pay a smaller amount on his home, there seems little doubt that the same consumer will pay all or a portion of the commercial property increase with every loaf of bread, sandwich or stack of pancakes he buys. The onerous part of the Gallagher Amendment is that it makes business the tax collector, so government can avoid showing its real cost on your tax notice and instead have the consumer complain about the high prices of goods and services — blaming the greedy businessman, not the bureaucrat.
The predicted benefits from this increase are not, surprisingly, murky. This is because much of what the education lobby asks for doesn’t do what the public wants, such as turn out better educated, competent graduates. This may be because much of their modeling for educational success has been disproved, but gives school administrators what they want, instead of what works.
As an example, let’s take one of the major places funding from this proposed tax increase is to go, the panacea of more computers. Coincidentally, The New York Times last Saturday ran a story where it examined a school district in Arizona that had passed a ballot initiative in 2005, stuffing classrooms with laptops and software to the tune of $33 million in tax money.
The result, “since 2005, scores in reading and math have stagnated ... even as statewide scores have risen.” This is a surprising result, especially when technology enables the children to do such valuable learning exercises as building a Facebook page for Shakespearean characters. The propensity for children to spend time fooling around on the Internet, as opposed to studying, should come as no surprise to anyone not seeking technological grandeur over everyday competence.
What about per-pupil spending? Maybe that’s the ticket. Not really, because it seems that past a certain point, per-pupil spending does not equate to educational achievement. School District 51 points to its $6,100 per student spending as in need of repair, but students in Washington, D.C. received more than $15,000 per student, with poor result. Students in post-apocalyptic Detroit had $13,000 each spent on their education and in May, 47 percent of them were declared to be functionally illiterate.
The hard reality is that the school district is less in need of an override than it is of rehab. There is a long-standing addiction to spending money and time on nonproductive endeavors. This lean time could provoke a fundamental re-examination of the system of delivery for education in Mesa County, which voters might embrace and financially support. The easy answer of the familiar is strong, but putting more money into local education will be helpful only if presented as part of a bold new plan, with meaningful and measurable benchmarks.
Rick Wagner offers more thoughts on politics at his blog, The War on Wrong.