The new school finance act is preparing for its first test of public support, with petitions headed to the streets for a $950 million ballot initiative.
Tuesday, a coalition of civic, business and community leaders, known as “Colorado Commits to Kids” announced the launch of a petition drive for a November vote on funding P-12 education.
But still unknown to ballot supporters is whether they’ll be able to count on the full fledged endorsement of Colorado’s governor, despite the fact that he signed Senate Bill 213, the school finance act, into law on May 21, and was presumed to support it fully. One of his senior advisors, Andrew Freedman, even signed up this week as director of the campaign to pass the initative. But Gov. John Hickenlooper told The Denver Post last week he was undecided about whether he would support the measure. The law states that if a ballot measure is not approved by November 2017, the new school finance act is repealed. The state then stays with its current funding system.
“We’re focused on building support with a wide variety of leaders,” said Curtis Hubbard, spokesperson for Colorado Commits to Kids. “We hope to earn the governor’s support.”
Hickenlooper spokesperson Eric Brown said in a statement this week that Colorado “has approved some of the most robust education reforms in the country. These are reforms the governor fully supports. Now, it appears voters will get a chance to endorse the changes and set a new course for Colorado kids. We look forward to following the petition process and continuing to talk to the business community and other stakeholders about these reforms.”
SB 213 co-sponsor Sen. Michael Johnston, D-Denver, said the governor has been “very engaged and thoughtful about it,” adding he is not stressed about the governor’s support and that he expects to have a broad statewide coalition backing the ballot measure, currently known as Initiative 22.
The measure would increase the income tax rate for taxable income of $75,000 or less from 4.63 percent to 5 percent. Earnings of more than $75,000 would be taxed at 5 percent up to the first $75,000, and 5.9 percent for income above that.
The money would be put into a School Accountability Fund as directed by the new school finance act.
The ballot measure was filed by the Colorado Forum in March, one of 16, with another nine filed by other groups. The Forum’s Gail Klapper told The Colorado Statesman that Initiative 22 had the components that they believed were the best.
“It includes a fix to Amendment 23 that will make sure the state has some flexibility in bad economic times,” she explained this week. “The two-tiered tax structure was the fairest way to go; it protects those at $75,000 and under from a huge tax increase,” and overall keeps Colorado at the lowest quartile in the nation in terms of overall taxes.
“Because we remain a low-taxing state, this is not going to be a dramatic problem for anybody… and it’s a game changer for education. It allows us to create an education system for Colorado that will be the best in the country,” Klapper said.
The two-year process of the ballot measure involved hundreds of discussions and meetings with civic and business leaders, as well as conducting polling and focus groups.
“We have a good sense on where this community stands on the issues. This compromise, this grand bargain, is where everyone gives a little. It’s the best solution.”
Some business leaders, such as Kelly Brough, president and CEO of the Denver Metro Chamber of Commerce, have raised concerns that the ballot measure will unfairly burden small business. Brough said her board will take an official position in August. However, she is concerned that the measure may unfairly impact small business and is in conflict with one of the principles the board had laid out to guide them in initiative approval. She explained that 90 percent of Colorado businesses are “S corporations,” where income taxes on the company’s earnings are paid by the individual owner or shareholder. Brough fears the tiered structure will negatively impact those businesses.
“Our job growth comes from these kinds of companies,” Brough said. “We don’t want to see a slowdown in our economic recovery.”
The concept of changing Amendment 23 came from Henry Sobanet, director of the governor’s Office of State Planning and Budgeting. Sobanet told The Statesman this week that if approved, the ballot measure would suspend the Amendment 23 language that requires the education fund to grow at enrollment plus inflation. The repeal will provide “flexibility in the form of not having an automatic growth requirement,” Sobanet explained. “When revenues in the state drop, all the budgets share in the ups and downs.”
“It’s up to lawmakers to understand the will of the voters” when they make budget decisions, according to Colorado Commits to Kids’ spokesman Hubbard. He explained that the ballot measure puts the new dollars into the School Accountability Fund, but the measure also requires a “floor funding” of 43 percent of the state’s general fund budget. The new money would be in addition to the 43 percent of the general fund budget, Hubbard explained, but if there isn’t enough money in the accountability fund during an economic downturn, general fund dollars would have to be used to reach the 43 percent floor.
“We wanted to leave the flexibility in there for when times get tough and [lawmakers] can go back to that floor,” Hubbard added. But they won’t be making the huge cuts in K-12 funding that have taken place in the last four years, or prior to the passage of Amendment 23.
The repeal language also restores a little bit of control by the General Assembly over the budget, according to Jane Urschel of the Colorado Association of School Boards. Urschel said CASB will support the ballot proposal, but they were not entirely comfortable with the Amendment 23 language and Urschel said it was part of the compromise.
With the Colorado Supreme Court decision on Lobato last month, “there is no other remedy to underfunding of K-12 education,” Urschel said. “It’s now in the hands of citizens, not the perfect way to make tax policy.” However, the ballot measure does restore a bit of the tax policy decision-making to the General Assembly, Urschel said, a policy decision that OSPB believed was in the best interests of the state.
Amendment 23 author Cary Kennedy, now Denver deputy mayor, is supportive of the ballot measure, and pointed out that the state has not adhered to Amendment 23 for the past five years.
“This is a royally important opportunity for Colorado voters,” Kennedy said this week. “Colorado’s schools shouldn’t be at the bottom in funding; we should lead the nation in our support for teachers, providing resources in classroom, expanded learning opportunities for students and technology.”
She called the ballot measure “an important step” that will direct dollars into proven programs, such as pre- and full-day kindergarten.
Co-sponsor Johnston told The Statesman that the funding contained in Initiative 22 will help create a “new and stronger floor for K-12 funding than what we had with Amendment 23.” He said Amendment 23 was brilliant and its sponsors passionate about education, but the General Assembly’s decisions on “negative factors,” which reduced the K-12 budget in the last few years, gutted the protections of Amendment 23.
“We’re trying to continue the spirit of Amendment 23, but building a floor to protect K-12 spending and give us some long-term stability,” he said.
Johnston also pointed out that SB 213 requires the creation of a reserve fund that will help the state ride out any future recessions.
“So there’s a better upside in the good years, and in the down years, there’s additional protection from the reserves,” he explained.
Those who don’t support the ballot measure claim the state has the money to fund K-12 without it, or warn that a tax increase could hurt the state’s economic recovery.
That includes the Colorado GOP; Chairman Ryan Call said Tuesday that Coloradans “would be shocked that Governor Hickenlooper and radical Democrats in the statehouse would fight to raise taxes on every Coloradan just as we are trying to emerge from one of the worst recessions in history.”
Sen. Kent Lambert, R-Colorado Springs, the senior member of the Joint Budget Committee, told The Statesman that recent revenue forecasts have shown that in 2013 the state can expect about $1.1 billion in revenue above earlier forecasts. In addition, Lambert is concerned that the money in Initiative 22 might not go to P-12 education, since general fund dollars are “fungible” and can be used for any purpose, an issue raised by Republicans during the debate on SB213.
Lambert pointed out that the 2004 ballot measures Referenda C & D promised money would go to certain areas, and it didn’t exactly happen in the way it was sold to voters.
“They cannot guarantee this will go to K-12,” Lambert said. A tax increase is “deceptive and unnecessary… we do have the money and could be [providing for] K-12 a lot better than we are right now, and with less money.”
On Thursday, Colorado Commits to Kids announced that Andrew Freedman, chief of staff for Colorado Lt. Gov. Joe Garcia and a senior advisor to Hickenlooper, will become campaign director of the ballot initiative.
Freedman, a Harvard grad who worked on Hickenlooper’s gubernatorial campaign in 2010, will work with political veterans Mike Melanson and Ben Davis of OnSight Public Affairs.
The Colorado Commit to Kids committee is registered with the Secretary of State, with campaign finance reports being handled by Tracie Moore of Tightline Strategies of St. Louis. Tightline partners come from the Missouri political scene but have strong ties to Colorado Democrats. They list among their clients the state Democratic Party, and they also worked on the 2010 campaign of U.S. Sen. Michael Bennet, D-Colo. and last year’s successful Amendment S ballot measure on state personnel system reform.
Colorado Commits to Kids’ first campaign finance report, which may show some of the early financial support for Initiative 22, is due July 1. The organization needs to get 86,105 valid signatures in order to qualify for the November ballot; petitions are due August 5. The group’s website, coloradocommits.com is in development and currently shows only a way to get on their email list.