Amendment 66: Who’s paying and what does it buy?
October 29, 2013
What it is
Amendment 66 is a funding mechanism for Senate Bill 2013 213, a package of changes to Colorado’s education funding formula. It would raise an estimated $950 million the first year and more in ensuing years, assuming Colorado’s economy continues to improve.
What it costs
Amendment 66 asks for a two-tiered state income tax rate:
A 5 percent flat rate for income up to $75,000 annually and,
A 5.9 percent rate for all earnings above $75,000.
To determine your tax increase, go to http://coloradocommits.com/calculator .
What it does
Senate Bill 213 requires that 43 cents of every Colorado state tax dollars be dedicated to the state’s K-12 schools.
The package funnels more money toward disadvantaged districts, and would fund full-day kindergarten and increase support for at-risk students. At-risk students are defined as qualifying for the federal free and reduced lunch program.
However, all those plans will die from lack of funding unless Colorado voters approve the proposed income tax increase.
According to the Colorado Legislative Council, those plans will actually cost $1.12 billion. Lawmakers would have to figure out how to fund the rest during the 2014 state legislative session.
EAGLE COUNTY — An additional $4.3 million would be pumped into local schools if Colorado voters approve a package to overhaul the state's education funding formula.
But opponents of Amendment 66 said it'll hammer small businesses just as Colorado's economy is finding solid footing.
Amendment 66 is a $1 billion state income tax increase earmarked for K-12 education.
Supporters say it means smaller classes and more tools for teachers.
Opponents say the money would be devoured by administration and retirement accounts for public employees.
The reforms require that 43 percent of the state's budget be spent on education. The reforms would also reallocate money based more on need than on student enrollment.
Among the new criteria would be the number of English language learners in a school district, as well as the number of at-risk kids in a school district, based on kids eligible for free and reduced lunch.
Facts about funding
Right now in Colorado, education funding is generated largely through local property taxes and excise taxes.
Those local property and specific ownership taxes account for 70 percent of the funding for Eagle County schools. The other 30 percent comes from the state, according to the Colorado Department of Education.
Under Amendment 66 and SB 213, the total funding for Eagle County's schools would be $46,675,111, according to calculations by the Colorado Department of Education.
Of that, $3,350,957, would be allocated to support at-risk students and $3,498,699 allocated to support English language learners, about 7 percent for each group.
At 36.3 percent, Eagle County has one of the highest percentages of English language learners in Colorado. The state average is 14 percent. Plugging that into the new funding formula is part of what would generate an additional $4.3 million for local schools.
The political cry that these kids (at-risk and English language learners) will get more is not accurate; the more accurate statement is that it equalizes resources more fairly for all students, said Dan Dougherty, the school district's communications director.
Currently, the state requires districts to meet the unique needs of all students without extra allocation for those who need extra services.
"Therefore, the current funding formula arguably reduces supports for all students," Dougherty said. "The adjustment in Amendment 66, by accounting for the extra cost, balances resources for all."
Even without the additional funding, we're meeting the needs of at-risk and English language learner students anyway, Dougherty said.
"With the funding, it helps offset those direct costs already being spent, and thus frees up resources," Dougherty said.
The at-risk factor is the most manipulative in the funding formula, said Ben DeGrow, senior education policy analyst for the Independence Institute.
Under Amendment 66, students are considered at-risk if they qualify for the federal free or reduced lunch program.
The program is income-based, and families with income at or below 130 percent of the poverty level can qualify for free lunches. Families between 130 and 185 percent of the poverty level are eligible for reduced-price meals.
The federal poverty level is $23,550 for a family of four.
In Eagle County, 45 percent of the student population qualifies for the free-and-reduced lunch program. In three local schools, more than 70 percent of the students qualify, according to the USDA, which oversees the program.
DeGrow said the formula begins with a 20 percent premium for an at-risk student, and the percentage goes higher for districts that have a higher percentage of at-risk students. So, the more at-risk kids you have, the more you get per kid, DeGrow said.
"Districts used to get funding for either/or — English language learners or free/reduced lunch qualifiers," DeGrow explained. "Now it's both, which is where opponents justify saying these kids are being double counted."
Business of education
State Sen. Mike Johnston is a Vail native representing a Denver district in the state senate. He wrote SB 213.
He says the education improvements that increase funding will help recruit businesses to Colorado.
Opponents disagree, saying it'll hammer businesses already here.
"This creates the country's most competitive K-12 education system, one that people will want to put their kids in, and that will help attract businesses to Colorado," Johnston said.
Colorado competes against about 12 states to attract industries, Johnston said.
"The Colorado paradox is that we have one of the country's most educated workforces, but we have some of the lowest performing schools," Johnston said. "When we lose a business to another state, what we most often hear is, 'If you can't give me a pipeline of great employees, why would I come here?'"
The nonpartisan Tax Foundation is opposing the package, saying small businesses, the poor and the middle class will be hit hardest. The Tax Foundation has monitored local, state and federal fiscal policy at the federal, state and local levels since 1937.
"A majority of new jobs created in the U.S. between 1993 and 2011 came from small firms," said Elizabeth Malm, a Tax Foundation economist. "Although this amendment will raise money for education, it could have a negative impact on the economy. There is very good evidence that taxes and economic growth are negatively related, and this shouldn't be ignored."
If Amendment 66 passes, then the majority of Coloradans are in for a tax increase, Johnston said.
"It's not great for polling, but people cannot come back and say, 'We need more money so let's just raise the rate on the top bracket.' That's us," Johnston said.
Johnston said he pays $87 in state income taxes for every $1,000 he earns. If Amendment 66 passes, then it will go up to $89 in taxes.
Supporters are expected to spend about $7 million getting their message out. But not everyone is convinced.
The Douglas County school board unanimously opposed Amendment 66, arguing that the county's taxpayers would pay $90 million to $100 million for a return to Douglas County schools of about $50 million.
Eagle County's school board voted unanimously to support it, citing the $4.3 million in new money.
Kaarl Hoopes, of Coloradans Against Unions Using Kids as Pawns, said Democratic lawmakers did not have a single Republican vote when they passed the package.
"It's the biggest tax increase in state history. Wouldn't you think they'd like to have bipartisan support?" Hoopes said.
Staff Writer Randy Wyrick can be reached at 970-748-2935 and firstname.lastname@example.org.