A fix to a factory tax that is expected to generate more funding for schools, but raise property taxes without voter approval will impact people living in the Boulder Valley and St. Vrain Valley school districts. .
The St. Vrain Valley School District sent a letter to homeowners earlier this month explaining the increase, which is due to the passage of Bill 21-1164 in June. The law comes into effect this year and will be reflected in property taxes due in 2022.
According to the letter, the factory tax correction will correct a Colorado Department of Education error made about 20 years ago. The letter stated that the Colorado Department of Education had “wrongly” asked certain school districts to lower the total rates of the Mile Levy program under the Taxpayer Bill of Rights, also known as the Taxpayer Bill of Rights. TABOR. This notice was given despite voters’ approval of an exemption from the TABOR limitations in these districts.
In a Colorado Supreme Court opinion on the case, the justices said that “based on misguided advice from the Colorado Department of Education, school districts have not implemented these waivers.” And, “due to the aforementioned TABOR income limits, school districts have found themselves unable to keep any income that would otherwise be owed to them,” the opinion says. Out of 178 districts, 174 have decided to waive the income limit imposed by TABOR and allow districts to keep the excess income, according to the opinion.
The letter from the St. Vrain Valley School District noted that “neither the district nor our school board has the discretion to implement this change” and that the district “was not in favor of this bill” and shared his concerns with lawmakers.
“One of the main reasons our district lobbied against this bill is that our community has always been very supportive of investments in our schools,” the letter said. “This legislation is a requirement imposed on Saint-Vrain taxpayers by the Colorado Department of Education and the state legislature.”
Districts could be penalized for not complying. Kerri McDermid, spokesperson for the St. Vrain Valley School District, said the Colorado Department of Education will reduce total program funding by the equivalent of local property taxes that have not been collected and a proportional amount of state equalization funding, if there is no compliance.
Bill Sutter, financial director for the Boulder Valley School District, also noted that districts “are required to implement the factory tax correction.”
“The CDE will regulate the mills, which the department had badly regulated since 1999, when BVSD received voter approval to maintain the current tax rate,” Sutter wrote in an email. âThis change that will be implemented is a delayed implementation of this 1999 approval, which is why it’s called a ‘factory pick correction.’ “
Asked how landowners in the Boulder Valley District were notified of the change, Sutter said landowners received a temporary tax credit applied to their 2020 bill, which was “likely the first indication of the change apart from various reports “.
Story behind the correction
In the letter to the owners, the St. Vrain Valley School said voters in 1998 approved a voting measure that exempted schools from TABOR requirements to reduce mill royalty rates as property values ââincreased. . The district mill tax at that time was 35,552 mills.
But, an error by the Colorado Department of Education asked the district to reduce the total levy rate for its program until it was frozen in 2007 at 24,995 miles, according to the letter.
TABOR, which was adopted in 1992, says: “The maximum annual percentage change in property tax revenue for each district is equal to the inflation of the previous calendar year plus annual local growth, adjusted for changes in tax revenue. lands approved by voters after 1991 and (some reductions not relevant here). “
What this means for schools
The current mill tax for the Boulder Valley School District is 25.032. Sutter said it would take two years to reach 27 vintages, with an increase of 1 vintage in 2021 and collected in 2022 and an increase of 0.977 mills in 2022, collected in 2023.
A factory in the Boulder Valley school district generates about $ 8 million in revenue, Sutter said. Once the change is “fully implemented,” Sutter said the change is expected to generate around $ 16 million, however, that doesn’t mean the district will see that total amount.
“We will be raising around $ 16 million locally, which will reduce the state funding we get, which in turn will reduce the burden on the state and free up resources that will be redistributed to districts, but this distribution methodology exact is subject to legislative implementation, “Sutter wrote.
Landowners in the St. Vrain Valley School District will see their rates increase from 24.995 to 27 mills, with the mill increasing by one this year and in 2022 and by 0.005 mills in 2023. The increase will generate approximately $ 4.1 million. in 2022 and $ 8.2 million. every year thereafter, McDermid said. But, like Sutter, she noted that the revenues go to the state, not directly to the district. McDermid said that at this time it is not known how much funding would be increased for the district.
The Denver Post reported that the change is expected to create an estimated $ 91 million more for the next fiscal year for school districts.
The St. Vrain Valley and Boulder Valley school districts are among 127 districts in the state that will be affected by the law.