Its passage, they say, could significantly erode public education funding at a time when schools -- asked by the public to do more than ever before, and in the midst of far-reaching reforms -- are in desperate need of increased funding.
Amendment 21 would mandate a $25 reduction in every citizen's property, income, vehicle and utility tax bill, thus gutting traditional school funding.
This prospect has educators climbing the panic pole because approximately 43 percent of public education funding is supplied by local property tax revenues, and another significant chunk (varying from district to district) comes from local vehicle taxes.
Amendment 21 would radically erode, if not eventually eliminate, both revenue streams.
Doug Bruce, the anti-government/anti-tax crusader and Colorado Springs landlord who authored Amendment 21, insists that his measure poses no threat to education funding.
"Amendment 21," he said in an interview last week, "wouldn't reduce school funding by a single penny, and anybody who says it would is lying."
Bruce stakes his argument on the fact that the School Finance Act, as presently written, obligates the state to reimburse school districts for funding losses incurred by reductions in property tax revenues.
"It's the law," he emphatically noted. "It's not even open to question. The schools wouldn't lose a thing."
Educators, however, say Bruce's argument is misleading and simplistic.
"Amendment 21 will create a tangle of unforeseeable consequences," said District 11 Chief Finance Officer Glen Gustafson. "As 21 shrinks the state's General Fund, a number of issues will require litigation in the courts. Much of how things ultimately fall out would depend on decisions the state legislature would have to make down the road in light of all that.
"It is reasonable to say, though," he added, "that Amendment 21 would result in less funding for public schools. How much less is impossible to say at this point, but it could be disastrous."
The threat to education funding
We contacted the business directors of Districts 11, 12 and 20 to see how each calculates Amendment 21 could impact their funding futures.
"One of the things Bruce isn't saying," said Larry Peifer of District 12, "is that there's a state law (the Arveschoug-Bird Amendment) that caps budget increases to six percent any given year. No matter what the School Finance Act says, there's no way once Amendment 21 kicks in that the state can stay within that six percent limit and still reimburse all 176 of the state's school districts for their loss of property tax revenues.
"They might be able to do it for a year or two, but not indefinitely."
Byron Pendley, the Director of School Finance for the Colorado Department of Education, agrees with Peifer and adds that even the School Finance Act does not guarantee that school districts will be reimbursed for property tax losses created by 21.
"The School Finance Act is superceded by a section of state law that says the state can't pay out more than it has cash to draw on," he explained. "The School Finance Act may say that the state is required to refund lost revenues 100 cents on the dollar, but if the state has only 80 cents on the dollar to give, then money rules. It's somewhat of a theory- versus-reality thing."
Gustafson observes that Amendment 21 language prohibits the state from dipping into its annual surplus to fund any reimbursements. "Which means," he said, "that they have to rely on the base budget while prisons, highways, school districts and all kinds of line items will be competing for a pool of funds made smaller by Amendment 21 in general, and even smaller by school district reimbursements.
"I question whether the state can come up with the revenue to do that. The combined effects of 21 for schools alone would cost $125 million the first year, double the next year, and increase incrementally after that. Keep in mind, meanwhile, that the state is subject to TABOR as well.
"So, something will have to give. When things start getting tight a year or two from now," he continued, "the state would have no recourse but to remove the requirement for property tax reimbursement from the School Finance Act and/or significantly lower the per-pupil funding level. The state did that six out of ten years in the 1980s when things were tight, and if that happens again, public education will have to make radical cuts in programs and services.
"This would happen," he added, "right at the time when we're desperately struggling to raise test scores, reduce class sizes and hire more teachers. There's no more room to reduce expenditures other than closing schools and cutting teachers and programs. And keep in mind that Colorado is already at the bottom of the stack in terms of K-12 funding -- anywhere from 32nd to 49th in the country, depending on which factors are emphasized."
Will Hatcher of District 20 observed that the only way the schools could make up for reduced funding is through mill levy override elections. To put this another way, tax cuts on one end would have to be funded by tax increases on the other, and school districts would have to keep asking voters for more as the reductions of 21 accumulate annually.
"And that wouldn't solve the problem, even if the voters would go along with that," Hatcher added. "Preliminary indications are that the state will say that any override funding we're getting compensates for property tax revenues lost to Amendment 21, which means they'd pay that much less in their reimbursements -- assuming that the state even continues to reimburse."
21 according to Bruce
Bruce dismisses such assessments as "doom-saying" and "silly hysteria."
"The doomsayers rolled out the very same scare tactics back in 1992 when TABOR came up for a vote," he said. "To listen to them, TABOR meant the end of the world. It meant no more police, no more fire, no more schools, roads, jobs, parks, no more anything. But all those things are still here, aren't they? And the schools will be, too, if Amendment 21 passes.
Bruce describes Amendment 21 as "round two of TABOR."
"You've known since you were eight years old that people will deceive you to get your money," he explained. "That's exactly what's happening here with big government and the people who support it. I'm not the one who's trying to get your money. There's no reason for me to lie about this because 21 isn't going to benefit me financially."
(Actually, as a major property holder in Colorado Springs, Denver and Pueblo, Bruce would benefit handsomely from 21, as he did from TABOR. Bruce points out, though, that he's in the process of selling all his properties. "I'm not about to hold on to them in order to save $25 in property taxes," he said, though leaving out the fact that Amendment 21 tax cuts would make his properties more attractive to potential buyers.)
Amendment 21, Bruce insists, champions the working-class little guy. "This will mean the most to those who have the least," he said.
Bruce insists that 21 would barely put a dent in the state's coffers, and it wouldn't reduce a single public service. In support of this point, he evokes the big-picture scenario, pointing out how much money the state has.
"The state," he notes, "will gross $14.7 billion in revenue next year. There are approximately 2.4 million property parcels in this state, each of which produces a property tax that supports a school district. Multiply 2.4 million properties times $25 and you get a reduction of $60 million. What is $60 million compared to $14.7 billion? It's less than half of one percent! You tell me the government can't afford that?"
Opponents insist, however, that cumulative Amendment 21 cuts would cripple the government's ability to pay for essential or highly desirable services. Most Colorado Springs residents, they note, contribute, via their property taxes, to the support of at least five local taxing entities that provide citizen services, including the city, the county, the Pikes Peak Library District, the local school district, and the Southeast Water Conservancy District.
In some outlying communities, property taxes fund fire protection and ambulance districts, and in downtown Colorado Springs there's the Business Improvement District.
Most of this state's 1,500 special districts operate on a shoestring budget. A study by the University of Colorado School of Public Affairs projected that Amendment 21 tax cuts would wipe out 116 special districts the first year alone.
The Pikes Peak Library District, which has an annual budget of around $15 million, would find its funding cut by $3.8 million the first year, and $7.4 million by the fifth year. The district would be forced to close all nine branch libraries, leaving only the downtown Penrose Library and the East Library Information Center open.
Bruce insists that the state will reimburse all these districts for their lost revenues, but opponents insist that there is nothing in the text of Amendment 21 requiring the state to do so.
But it doesn't matter whether 21 requires reimbursement, Bruce argues, because the state will do so anyway. "You don't really believe the state legislature is going to let 1,500 special districts die over the next five to seven years, do you?," he asks.
"Say a district gets $100,000 property tax revenue and it loses $28,000 the first year due to Amendment 21. That sounds like a big dent in its budget, but the state spends $28,000 each minute of operation! That's such a trivial amount of money!"
In the meantime, debate over Amendment 21 rages while Colorado is drowning in a tidal wave of growth that is swelling public school enrollments by an average of 10,000 to15,000 additional students a year -- an amount the equivalent of a school district the size of Littleton or Greeley. K-12 enrollments have increased by 20 percent in the past eight years.
Schools are bursting at the seams, the student/teacher ratios are ballooning and teacher shortages are at emergency levels in some schools. At the same time, facilities are aging. Eighty-one percent of the state's school buildings are at least 20 years old and many of them are inadequate for the growing emphasis on computer-related and high-tech instruction the job market is demanding.
This November, Colorado school districts are asking voters to approve $666 million in construction bonds and $58 million in property tax raises to pay for emergency needs their annual budgets won't meet. Douglas County wants to build ten new schools, and Northglenn wants to build five new schools and renovate 40 others.
Financially-beleaguered District 11 is asking voters for $27 million in a mill levy override.
Even without 21, schools have had to cope with these problems with bare-minimum financial support from the state legislature.
Had schools been funded to keep up with growth and inflation since 1988, they'd be getting $314 million more a year than they are at present. For the first time in ten years, Colorado schools were funded in 1999 and 2000 at a level that kept them even with growth and inflation.
"Amendment 21, though, could eventually cripple public education," said Peifer. "But to tell you the truth, I don't think it'll happen. All these other districts would be devastated so badly and so quickly that people would be left without services and the state would have to do something to change it."
"The analysts I'm reading are saying that this thing would be the death knell of K-12 education," said Hatcher.
"The upside to Amendment 21," said Gustafson, "is that the average taxpayer will save anywhere from $375 to $800 per year. The downside is that it will virtually destroy government services as we know them, one of which is quality education for our kids."
Bruce counters defiantly, "There won't be any reduction in services, including in education. Anybody who says there will is trying to deceive you."
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