If you are a property owner like I am, perhaps you recently opened a letter from the county assessor’s office. Chances are that it contained a notice that the assessed value on your property had increased in the latest assessment process and, as a result, you may see a bump in your taxes beginning in 2018.
Property taxation, of course, is a double-edged sword. On one hand, nobody likes paying more taxes than they have to and it isn’t fun getting a notification that you will be paying more in the coming months. Yet, on the other hand, higher taxation is often due to the fact that your property is now worth more – which is great news if you decide to sell your property someday.
One of the common misconceptions about taxation for school districts revolves around the belief that when taxes go up, that automatically means the district gets to collect that extra tax money. And that is not true. Here in Colorado, our educational financial system is built upon a concept called “equalization.” The system is designed to help ensure that smaller districts and communities can receive the taxpayer support they need to fund their educational efforts and compete with other communities on a more equal footing. A small district with 1,000 students spread out across 350 square miles simply cannot operate as efficiently as a district that has 20,000 students in an area of only 30 square miles. So, for example, while a city district may receive $7,500 per student each year in state funding, for a rural school district that total may be closer to $16,000 per student.
In Colorado, the state sets a funding level for each school district based on a state constitutional funding formula. The funding amount set by the state is generated from property and vehicle registration taxes, with the remaining amount coming from the state’s general fund. Property and vehicle registration taxes are collected locally and remitted to the school districts. Through a process called “equalization,” the state contributes the remaining amount needed to meet a school district’s total funding amount, as determined by the state’s formula. When Thompson’s local property assessments increase, which results in higher property taxes, that increased amount simply reduces the amount that the state is required to contribute in order to meet the allocated formula amount. Our per-pupil amount scheduled for the 2017-2018 school year is $7,279, which does not go up.
This is why the solution to fixing funding problems at school districts around the state boils down to two alternatives: receiving more funding from the state’s formula through a higher per-pupil revenue amount or passing a mill levy override measure that directly benefits that school district. At this time, there is no indication that the state will step up to provide the increased funding support that our students need. This is why so many school districts, including Thompson, have begun asking their communities for more local support through mill levy overrides, as those dollars go directly to that local district as a supplement to help overcome the lack of funding from the state. The extra dollars raised through these measures remain in the community as a supplement.
While Thompson has eleven different fund categories, the primary operations of the district are conducted through the general fund, due to the restrictive nature of the other funds. The ten other fund categories are restricted in use by revenue and expenditures. As an example, Nutrition Services is designated as a “special fund” that receives its revenue in the form of federal subsidies and student meal fees. Expenditures associated with the student meal program are restricted to only the activities of the food service program. The same is true of the bond redemption fund, where revenues collected are distributed solely to the retirement of bonded debt. The total available in all funds is $185 million. This is a lot of money. But when you calculate the support per student per day based on approximately 16,000 students in 33 school buildings pre-K through 12th grade, the dollar amount is surprisingly small.
Allow me to explain: $185 million divided by approximately 16,000 students pre-K through 12th grade and then divided by 169 school days equals $68.41 per day per student for a full fiscal year. This total covers all of the support that students receive such as staffing, busing, building maintenance, technology, athletics and extracurricular activities, summer school programs and all restricted uses in all funds.
Thompson’s total educational mill levy rate has decreased from 43.47 mills in 2007 to 38.349 mills today due to an increase in assessed property valuation. As compared to other districts in the area, TSD’s mill levy rate is approximately 16 mills (30%) below our neighboring school districts to the north and south. These communities have supplemented their budgets with mill levy override measures while also experiencing comparable growth in their assessed valuation.
Thompson has one of the lowest school tax rates in the region, and that has not changed with the recent increase in property valuation. We will continue to serve our students while continuing to look for new avenues to garner the resources that are needed to educate our community’s youth.
Thank you for your support,
Dr. Stan Scheer
Thompson School District