Colorado flag money spending financing

The Colorado legislature on Friday finished its work on the annual state budget and sent it on to Gov. Jared Polis.

Final action came after the General Assembly's Joint Budget Committee, working as a conference committee on the 2019-20 spending plan, worked to resolve differences between the House and Senate versions.

The biggest issue: How to find $70 million to pay for the agreement made last week between House and Senate Democrats and Republicans on funding transportation. That brings the total funding targeted for transportation at $300 million, although it's one-time only money.

RELATED: Colorado lawmakers reach agreement transportation funding

Where they found it: $10 million from money set aside for House Bill 1262, which fully funds all-day kindergarten. The bill's original cost was pegged at $185 million, but later estimates dropped it down to $175 million.

The JBC also tapped $30 million from the state's unclaimed property tax fund, and $10 million in vacancy savings held in a state reserve fund.

According to Democratic Sen. Rachel Zenzinger of Arvada, who sits on the JBC, another $10 million came from technical amendments that tightened up the budget. The last $10 million was found when the JBC finally finished balancing the budget. 

The JBC's actions mean that general fund dollars allotted to the House and Senate appropriations committees, about $20 million each, are still available to pay for some of the nearly 100 bills awaiting the General Assembly's final decisions on the budget. 

Just how that $20 million will be spent means something of a tug-of-war in the coming weeks.

Friday morning, Senate Democratic leaders met with reporters to look at some of the issues that will take up the last three weeks of the session.

Colorado Politics asked if funding for House Bill 1032, the comprehensive sex education bill, is a high enough priority for that funding. The Democratic caucus is committed to that bill, replied Senate Majority Leader Steve Fenberg of Boulder, although he didn't say how high that bill sits on the caucus's priorities.

Lawmakers are now looking for ways to cut costs on their measures in order to ensure their bills make it all the way to the governor's desk. 

> RELATED: Colorado's sex education bill may fall victim to lack of funding

Both the House and Senate approved the conference committee's report and readopted the budget on Friday. Senate Bill 207 and related bills in the budget package now head to the governor for signing.

During the JBC's work on the budget bill Thursday, Republican Sen. Bob Rankin of Carbondale tried to find the $30 million requested by rural schools that would close the gap between what they are slated to receive and the higher per-pupil funding slated to go to large school districts. That motion failed on a 3-3 vote.

But Rankin told Colorado Politics Friday that another funding source has surfaced that is likely to make that boost a reality.

On Wednesday, the Department of Local Affairs, which includes the state's assessor, released its recommendation for residential assessment rates for 2019-20. It's a report that lawmakers and school districts have been watching for with some trepidation, because early estimates said the residential assessment rate could drop precipitously -- to about 6.11 percent -- and that would cause a reduction in property tax collections that would hit school districts hard, particularly in rural Colorado.

The news on Wednesday was better than anticipated. The residential rate is being reduced to 7.15 percent, down from the rate of 8.24 percent in the previous two years. But not down to the 6.11 percent lawmakers had feared.

What that means: the assessment rate is re-evaluated every two years, a requirement of the 1982 Gallagher Amendment that requires a division of property tax rates between residential and commercial properties. Gallagher requires commercial properties to pay 55 percent of the state's property taxes and residential at 45 percent. 

No one needs be told that home property values have skyrocketed, particularly in the past seven years. In order to maintain that 55/45 ratio, property tax rates for residential properties have actually gone down.

That's meant trouble for school districts that rely on residential property taxes for school funding, and rural communities claim they've been hit harder than those in the Front Range, where those property tax values have increased the most.

But the news that the residential rate wouldn't go down as much as expected has meant that there's a little more in the bank for school finance.

Rankin told Colorado Politics that about $100 million more will be available. About $10 million will go to cover senior and veteran homestead exemptions. That leaves $90 million more for the School Finance Act, which is expected to be introduced next week.

Rankin said he intends to advocate for that $30 million boost for rural schools, stating that until there is a major restructuring of the School Finance Act formula, rural schools will continue to need those extra dollars.

An interim committee that started work in the 2017 session won another summer to continue its work on figuring out just how to restructure the School Finance Act formula. 

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