Statewide Funding Ballot Initiative Amendment 73 Gilpin County Re-1 - - PowerPoint PPT Presentation

Statewide Funding Ballot Initiative Amendment 73

Gilpin County Re-1

Background

• Diverse and inclusive coalition of education-focused
• rganizations began meeting in July 2016 to focus on the

Colorado school funding crisis

Goals

• Raise additional revenue for education

○ Distribute new revenue adequately and equitably ○ Ensure local benefit and local control over how revenue is spent

• Provide a structural fix to the declining local revenue source

A73 creates the Quality Public Education Fund

• Supports and enhances the quality of preschool through twelfth

grade (P-12) public education beginning in FY 2019-20

• Contains revenue from a proposed income tax increase
• Is exempt from the TABOR revenue limit
• Must be used to supplement General Fund appropriations for

P-12 public education

• Adjusted each year for inflation up to 5 percent

Raises $1.6 billion through income tax and corporate tax changes

Starts at federal taxable income above $150,000

Current With Amendment 73

Corporate tax on C Corporations will increase by 1.37% to 6%

Addresses the structural problem in the property tax system for education by permanently setting the residential assessment rate, currently third lowest in the nation.

Stabilizes the local share that continues to decrease as a percent of total school funding

Raises $1.6 billion to address local needs and ensures decisions are made at local level

Source: Legislative Council Staff

• Increases base funding for all students
• Provides funding for full-day kindergarten and increases revenue

going to early childhood education funding

• Expands the definition of “at-risk” students to count free and

reduced lunch kids

• Significantly increases the amount of funds passing from the state to

local districts for: Special Education, English Language Learners, and Gifted & Talented students

Local Impact and Various Scenarios

Gilpin County Re-1

Funding Shortfall Since 2009-2010

• $4.2 million

Funding Shortfall 2018-2019

• $0.4 million

New Revenue from Amendment 73 $0.8 million Funding Shortfall 2018-2019 B.S. Factor

• $893

Increase in Per Pupil Revenue through A73 $1,718 MLOs Required to Raise this Revenue Locally* 2.5 District Capacity to Raise Per Mill $316,539 *Amendment 73 is a statewide effort to address school funding shortfalls. Local districts are permitted to raise additional revenue through local MLO elections, but there are limits to how much is allowed. Not all districts have the capacity to raise money locally to backfill the recent state funding shortfalls. The range for what 1 mill can raise is $5,000 to $16.5M in each of the 178 school districts.

Source: Income data is based on US Census Bureau

Based on average income in Gilpin county

Source: Income data is based on US Census Bureau

97% of Gilpin tax filers have income below $200,000

Business scenario (not a C Corporation)

Farmer / Rancher scenario

Visit www.cosfp.org/impactcalculator to access the calculator

Impact on: C-Corporations

$7,000 savings $70,000 savings $280,000 savings Federal Tax Change $685 increase $6,850 increase $27,400 increase State Tax Change for Public Schools

Corporate Profits

$50,000 $500,000 $2,000,000

Additional Information on C Corporations

• Businesses that pay corporate income tax are typically large

businesses that operate across multiple states or countries.

• The change is expected to generate $229.4 million in budget year

2019-20.

• On average, the approximately 15,000 corporate income taxpayers

with an income tax liability are expected to pay an additional $14,139 per year under the measure.

Arguments For and Against

• The state needs a sustainable source of

revenue to adequately and equitably fund public education.

• The measure provides property tax relief for

business property owners, farmers, and ranchers who have paid an increasingly higher proportion of property taxes compared to residential property owners.

• One of government's most important functions

is to provide children with a high-quality education.

• Stabilizing the local share of required school

formula funding and creating a dedicated source of state revenue for education provide additional flexibility for the state to use more of its general operating budget on other core programs, such as transportation, public safety, and health care.

• The measure imposes a tax increase without any

guarantee of increased academic achievement.

• Increasing the state income tax rate could

negatively impact the state’s economy. Businesses will have less money to invest in their workers and individuals will have less money to spend, save, and invest.

• The measure complicates an already complicated

property tax system. By creating one assessed value for school districts and another assessed value for all other local taxing entities, the measure will lead to confusion among taxpayers and further complicate tax administration for state and local governments.

• The measure does not allow the state legislature

to adjust the income tax thresholds to account for inflation.

For Against

CASB Resources

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