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School funding plan: Easy money? 

Legislators say they can allocate a billion dollars without consequences

click to enlarge Edison Superintendent David Grosche  shows books shelved in - the librarys bathroom.
  • Edison Superintendent David Grosche shows books shelved in the librarys bathroom.

The kitchen at rural Edison School smells like propane and old grease.

This school building in southern El Paso County features occasional flooding, a teeny cafeteria, two restrooms for 130 students and a library so small there are bookshelves in the bathroom.

Andrew Romanoff's take: "This is not the worst of the places we've visited."

This comment from Colorado's Speaker of the House is not so much callous as it is realistic.

In a recent press conference, Romanoff, State Treasurer Cary Kennedy, state Sen. John Morse and state Reps. Michael Merrifield and Marsha Looper were discussing deplorable conditions in some Colorado schools, especially those in poor, rural areas. They're districts whose cash-strapped residents won't pass bond issues end up trying to patch problems. In the meantime, students suffer. In one El Paso County school trailer, a rotted floor gave way under a student's desk while the child was sitting at it.

But wait, there's good news.

These leaders say they've found a way to fund as much as a billion dollars in capital projects at public K-12 schools. And the proposed bill won't cut anything or raise taxes.

"Sound too good to be true?" Kennedy asks.

Well, yeah. To understand this idea (and whether it's as cool as it seems), you need to travel back to 1876, to a time when the federal government used a now-rare tool called foresight.

When Colorado became a state, the federal government grabbed a huge chunk of the state's land and created the School Trust Lands.

The Colorado State Land Board's job was to steward those lands, lease them out, make money and use it to help fund school needs.

If any of the land was sold, proceeds were to be dumped in a permanent fund or used to buy replacement property. Royalties from mineral leases also have been dumped in the permanent fund, which has remained untouched.

Schools have received millions annually from interest off the permanent fund, and by getting money directly from money the land earned through renting (think commercial properties and grazing). And so it was for ages.

But a few years ago, a recession was blunting the fund, so the general assembly decided to cap the amount of money that schools received each year $19 million in interest and $12 million from rentals. Any extra went into the ailing fund.

The cap remains, but the lean times are gone. The land board owns 3 million acres of land and 4 million acres of subsurface rights. The permanent fund contains nearly $500 million and it's growing. Kennedy estimates the lands could earn $90 million in 2008 (compared to $57 million in 2004).

The new bill would keep the old caps in place for operating costs at schools, but would put an extra $30 or $40 million annually about a third of earnings toward capital projects.

"We need to give districts the money to make capital improvements that make sense," Kennedy says.

The treasurer believes funds can be leveraged to create about $500 million in 2008. With local matching grants, the money could balloon to nearly a billion, to fix or replace dilapidated schools, then to build new schools in overcrowded districts.

There could be catches. While the land board does not take a position on pending legislation, director Britt Weygandt says market-based royalties on minerals a large contributor to the current wealth could drop. Plus, the gas, oil and coal won't last forever.

Kennedy says she believes that the program is conservative enough. Besides, she says, if the economy tanks, the state Legislature will be able to adjust.

"Our commitment," she says, "is to maintain the integrity of the permanent fund."

stanley@csindy.com

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