Last budget cut is largest of all: $577M from K-12 education

The legislature’s Joint Budget Committee wrapped up its efforts to balance the 2020-21 budget in the face of a $3.3 billion shortfall on May 22, with the last cut the largest of all: $577 million from K-12 education.

The committee’s members said they held off on making cuts to education until the bitter end, and it was a bitter pill to swallow.

Said Sen. Bob Rankin, a Carbondale Republican and the committee’s senior member, that both parties’ priority during the budget-cutting process has been to maintain funding “for our kids.”

The cut comes in the form of a funding recommendation for K-12 in the School Finance Act, which will be sponsored by the chairs of the House and Senate education committees.

What is yet to be decided: whether that amount gets added to the budget stabilization factor, the debt to K-12 that has been on the books since 2010.

That debt, currently at $572.4 million, is a remainder from the Great Recession, when lawmakers concluded that they could not afford to fully fund education as required by Amendment 23. That is the 2000 voter-approved initiative that requires the state to fund education at the rate of inflation.

Should lawmakers decide to add the $577 million to the BS factor, that would put it at $1.149 billion, just $1 million less than its peak in 2012.

The second problem that worries lawmakers: property taxes. Because of the pandemic, the state property tax administrator, JoAnn Groff, recently told lawmakers that the state may have to pick up more of the cost of education. That’s due to an expected decline in property taxes for both residential and commercial properties in the coming year, and tied to the Gallagher Amendment, a 1982-voter approved amendment designed to provide relief from rising home property taxes.

Under Gallagher, 55% of the state’s property tax base must come from commercial properties and 45% from residential properties. Over the years, rising home values have caused the property tax rates for homes to drop to maintain that ratio. It’s a statewide ratio but has been especially hard on rural Colorado, where lower taxes on homes have meant less revenue for schools and other services paid for by those taxes.

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