With a Jeffco Schools mill levy override, bond issue and the statewide Amendment 73 on the ballot this November, you may wonder why schools are asking for more money while property taxes continue to rise. The answer has to do with how Colorado school districts are funded and how far those dollars stretch to educate students.
Colorado public school funding is mandated and limited by Colorado’s 1994 Public School Finance Act. For Jeffco Schools, approximately 65 percent of its funding is controlled in this way. The act requires the state to set a fixed amount of funding per enrolled student to all Colorado school districts each year. That amount is adjusted annually based on each school district’s:
- Cost of living
- Personnel costs
- At-risk student population
Funding is also impacted by the Taxpayer Bill of Rights (TABOR), which strictly limits the legislature’s ability to effectively respond to school districts’ financial challenges and requirements.
In addition, since 2010, the Colorado state legislature has used the “budget stabilization factor,” formerly known as the “negative factor,” to further lower per-pupil funding in response to state budget constraints. The legislature has imposed the budget stabilization factor on the state school budget each year, underfunding Jeffco Schools by an estimated $642 million in the past eight years.
The end result of these adjustments is that per pupil funding for Jeffco Schools is $7,945 for 2018-19. This translates to Total Program funding of $643.4 million.
When property taxes rise, it doesn’t mean Jeffco Schools gets more money
The two largest components of Jeffco’s Total Program funding include local property taxes and state funding. Ownership tax is a third component that represents about 3 percent of Jeffco’s funding.
- Local Property Taxes — Local residential property owners pay taxes based on the assessed value of their property. Currently, the assessed value is defined as 7.2 percent of the property’s actual value as determined by the county. To calculate each property owner’s contribution to Jeffco Schools, assessed residential real estate value is multiplied by a fixed mill levy amount and divided by 1000.
- State Funding — The state is required to fund the difference between the Total Program amount and the combined amount of local property and ownership tax. As Jeffco property tax revenues rise, the state contributes proportionately less to the Total Program over time.
The portion of Jeffco property taxes used to fund the district has increased by more than 30 percent in the last decade — from $193 million in 2009-2010 to $252.4 million in 2018-19.
Meanwhile, the state’s contribution to Jeffco’s Total Program funding has remained flat. In 2010-11, the state contributed $367.6 million toward Jeffco’s Total Program. In 2018-19, the state is paying about $371.1 million — about a 1 percent increase in 10 years.
The combined effect of TABOR, the negative (or budget stabilization) factor and reductions in the state proportion of Total Program funding is the primary reason that Jeffco Schools funding has grown minimally over the last 10 years even though property taxes have increased substantially.
Jeffco Schools funding has not kept up with inflation
The chart below presents Jeffco’s actual per-pupil Total Program funding for 2009-10 through 2018-19 and the projection of per-pupil funding if it had simply been tied to the consumer price index (CPI) for the Colorado Front Range. This chart makes clear that Jeffco per-pupil funding has not kept up with inflation. In fact, 2018-19 funding represents more than a 13 percent deficit when compared to inflation.
Increasing district funding through mill levy overrides and bond issues
Each school district’s funding may be increased above the Total Program funding through voter approved mill levy overrides and bond issues. These ballot measures address different components of school funding and impact property taxes differently.
Mill levy overrides provide additional ongoing funding for operating expenses
Mill levy overrides (MLOs) provide additional ongoing funding for operating expenses. MLOs are not part of the Total Program budget and are a way that local taxpayers can increase school funding above the level set by the state.
Typically, mill levy override amounts are not tied to inflation. The dollar value of the override remains constant in the face of ever increasing costs.
In Jeffco, voters approved mill levy overrides in 1999, 2004 and 2012. These overrides account for $113.3 million of additional school funding each year. Mill levy override funding is shared equally with charter schools on a per-pupil basis. In 2018-19, approximately $12.7 million goes to charter schools and $101.3 million goes to neighborhood and option schools.
Bonds provide borrowed funds for capital improvement
Bonds provide borrowed funds that can be used only for capital improvement. Those include items like new school construction, additions, renovations, and new roofs. Jeffco’s bonds are typically paid off over a 20 year period, after which taxpayers are no longer billed for that expense.
The most recent bond was approved by voters in 2012 to fund basic facilities maintenance to keep students warm, safe and dry. It included items such as replacement of leaking roofs and windows, and the replacement of failing heating and ventilation systems.
The 2004 bond provided funding to build new schools and additions and to do major renovations. It included:
- Second phase of the Arvada West High School replacement
- First phase of the Sierra Elementary School replacement
- Two new schools: Bear Creek High School in Lakewood and Meiklejohn Elementary in Arvada
- Renovation of the Brady Exploration School and major HVAC replacements and renovations at other schools
- Replacement of Dunstan Middle School, Golden High School, Lakewood High School and the Jeffco Open School
- Additions to Chatfield High School, Creighton Middle School, Dakota Ridge High School, Ralston Valley High School, Evergreen Middle School, Fairmount Elementary, Hackberry Hill Elementary and Alameda International Jr/Sr High School.
Approximately $42 million collected from property taxes are allocated to service the district’s bond debt in 2018-19.
The 2004 bond will be fully paid off in 2026. The 2012 bond will be fully paid off in 2032.
Total Jeffco Schools 2018-19 funding, including charter schools**
- School Finance Act Total Program Funding – $643.4 million
- Mill Levy Override Funding – $113.3 million
- Bond Redemption Funding – $41.8 million
- Local Ownership Tax – $10.7 million
- Tuition, Fees, Interest, and other – $159.7 million
Total Jeffco Funding – $ 968.6 million
How are Jeffco Schools tax items displayed on my county property tax statement?
On your tax bill, the portion of the total program budget paid by local property taxes is added together with the mill levy override. Those are listed as “R1 School General Fund” on your tax bill.
The Bond Redemption Fund is listed as a separate line item on the bill.
How Jeffco Schools funding compares to districts of similar size
When compared to districts with similar student populations ranging from 79,000 to 95,000, Jeffco’s budget is the smallest. This chart compares Jeffco’s budget nationally to the five districts just larger than Jeffco Schools and the five that immediately trail Jeffco in student numbers.
|Fulton County, GA||$1,546,845,944||95,460|
|Lee County, FL||$1,508,771,993||89,364|
|Prince William, VA||$1,669,914,920||86,641|
|Fort Worth, TX||$1,191,226,447||85,795|
|Baltimore City, MD||$1,455,496,000||84,796|
|Davidson County, TN||$1,292,397,700||84,069|
|Long Beach, CA||$1,182,020,001||79,709|
Of the 11 districts listed, all have budgets that are notably larger than Jeffco Schools, including Jeffco’s neighbor, Denver Public Schools.
State and school funding are constrained by TABOR limits, making it extremely difficult to attain funding levels equivalent to other similarly-sized school districts, or to try to keep pace with inflation. As a result, schools continue going back to voters to request additional revenue streams like Jeffco Schools 5A and 5B and Amendment 73.
* Note that Colorado voters also approved Amendment 23 in 2000. Amendment 23 requires the state to increase annual funding by inflation plus 1 percent from 2001 to 2011, and then by inflation in all the following years. However, the legislature introduced a new factor for the 2009-10 year that reduced funding after a budget shortfall. The “Budget Stabilization Factor” was introduced in 2010-11 to reduce per-pupil funding below the required levels set by Amendment 23. For 2018-19, it resulted in a shortage $75 million that otherwise would have gone to Jeffco Schools.
** These numbers include funding for charter schools, but district financials do not include the charter school budgets. Each charter school determines and reports its own budget.