'Freezing' mill levies is an education fix state can do without

Rocky Mountain News Editorial 

3/16/07

      According to our copy of the Taxpayer's Bill of Rights - and we're pretty sure it's the same one used over at the state Capitol - voters must approve "any new tax, tax rate increase, mill levy above that for the prior year . . . or a tax policy change directly causing a net tax revenue gain to any district."

      Take another look at that last phrase: "a tax policy change directly causing a net tax revenue gain to any district." Isn't that what Gov. Bill Ritter proposed early this week as a means of shoring up the state education fund?

      He said the state would correct a "technical flaw," dating back to 1994, in the School Finance Act that forces school districts to lower their mill levy rates even if they have lifted TABOR's spending limits.

      Since the state wouldn't have to compensate the local districts for the lost funds, as it's been doing, the state would find itself with millions in additional revenue.

      Administration officials disagree that this violates TABOR. They argue that voters already approved the change, at least indirectly, when most school districts lifted TABOR spending caps. It's an interesting argument, and maybe the courts will even buy it. But the mechanism advocated by the governor still has the appearance of a too-clever technical trick.

      Some in the governor's Democratic Party seem to have doubts about the idea, too. An amendment containing the plan was pulled from the school finance bill Thursday before a Senate Education Committee vote. But supporters may still try to insert it onto the bill when it reaches the Senate floor.

      Ritter is no doubt right that the state education fund established by Amendment 23 will be in deep financial trouble in just a few years, and that means trouble for everything else in the state's budget. But the problem shouldn't be solved through technical schemes that impact property taxes.

      We have other concerns about this proposal, too - most especially the long-term effects of leaving mill levy rates unchanged if home prices begin to appreciate again at a rapid clip. The forced lowering of the rates has protected homeowners from sharply higher property taxes based on the increases in the assessed value of their homes. It's great if your house is worth more, but not so great if you can't afford to live in it because you don't have cash to pay your property tax bill.

      Property taxes are one of the most resented of taxes, and for good reason.

      We hope this measure doesn't get through the General Assembly and become law. But if it does, and if property taxes begin an alarming climb in the next few years, voters will know where to place the blame.