Senate ponders the meaning of 're-Brucing'

By Jason Kosena

School districts that choose to “re-Bruce” — lower their property taxes by reinstating the limits in the Taxpayers Bill of Rights — could see less state funding if a bill introduced at the tail end of the legislative session this week gains approval.

The intent of Senate Bill 291 is to punish school districts where voters choose to reinstate the TABOR taxation limits they had previously voted to ignore. As a result, less property tax revenue would go to the school district and, under current state law, the state’s General Fund would backfill the difference. If SB 291 passes, the state will no longer backfill the difference for districts that choose to “re-Bruce,” or adhere to TABOR taxation limits.

The re-Brucing provision became an issue earlier this year when Colorado State Supreme Court ruled on a 2007 law signed by Gov. Bill Ritter allowing the state to “freeze” the mill-levy rate. Ritter’s action stopped property taxes from dropping and did not require a vote of the people because 174 of the state’s 178 school districts already had voted to de-Bruce, or ignore TABOR’s taxation limits.

The intent of the mill-levy freeze was for local taxpayers to pay a larger share of the cost of schools while easing education’s draw on the state’s General Fund.

After the Supreme Court ruling, fiscal conservatives and policy groups began strategizing a countermove, talking of a statewide effort to get school districts to re-Bruce, shifting the burden of school funding back to the General Fund.

SB 291’s Democratic sponsor, Sen. Bob Bacon, D-Fort Collins, said the bill —which started as a controversial provision in the state’s pending School Finance Act before being pulled two weeks ago to ensure bipartisan support — is needed in order to protect the state’s budget.

“I think we need to watch the General Fund as much as possible, and we should not reward those school districts that choose to re-Bruce,” Bacon said. “If all of the school districts that have de-Bruced over the years re-Bruced, it would have a grave impact on school (funding) and the state’s budget.”

The Joint Budget Committee bears that out.

If all 174 school districts that have voted in previous years to ignore TABOR’s taxation limits chose instead to abide by them again, the state’s General Fund would be responsible to backfill $134 million in the 2009-2010 school year and $157 million in the 2010-2011 school year, according to Joint Budget Committee projections.

But not everyone believes the measure is good policy. One doubter is Sen. Keith King, R-Colorado Springs.

Legislative veteran King said, after the Supreme Court ruling, voters in many school districts may choose to re-Bruce in order to decrease their property tax, and the result would be an unequal education for their students.

“I think there will be school districts that will go back and re-Bruce, especially with the pressure that the mill-levy freeze will put on property taxes,” King said. “Local school districts are going to get pressure to re-Bruce, and then the school (funding) will begin to diminish.

“And then the state will not backfill the process. So there would be a gap that would be created between the local portion and the state portion, and we would be throwing out the School Finance Act. I understand the financial aspects of this bill, but I don’t think this is the right way to go about this,” he said.

Republican Attorney General John Suthers agreed with King that the legislation was not, in his opinion, good policy, but said he doesn’t believe it would be illegal if passed by the Legislature.

“I think there is no question that it would be a legal move,” Suthers said Tuesday afternoon. “But, I do believe that it’s bad policy. Now that the state’s voters have a chance to know what they are voting for, the state shouldn’t come back and punish them for their choice.”

The bill, which has 18 co-sponsors in the Senate, all Democrats, passed the Senate Education Committee Wednesday morning on a 5-3 party line vote and will now go to the full body on Second Reading before heading to the House.