By MIKE SACCONE The Daily Sentinel

Wednesday, May 02, 2007

      A plan to freeze property tax rates across Colorado will head to the governor’s desk after a debate Tuesday in which Republican lawmakers excoriated the measure as a “massive,” unconstitutional tax increase.

      “Without this bill, without this stabilization, we are going to see our state education fund insolvent by 2010 or 2011,” Sen. Sue Windels, D-Arvada, told her colleagues.

      Once that fund dips into the red, Windels said, constitutionally mandated education funding increases will slowly consume the entirety of Colorado’s budget.

      Windels said Senate Bill 199, which passed in a 19-15 vote largely along party lines, represented a step toward averting a budget crisis.

      Sen. Chris Romer, D-Denver, said without freezing mill levies and, in turn, increasing the property tax revenues school districts collect, lawmakers would allow a decline in the quality of Colorado schools.

      “The inconvenient truth is the public wants good schools,” Romer said, citing the passage of Amendment 23 in 2000.

      Republicans, however, were not convinced of the bill’s merit.

      Sen. Shawn Mitchell, R-Broomfield, said Senate Bill 199’s mill-levy freeze was less about helping public schools than keeping “legislators from having to make tough choices” about the budget.

      Mitchell said because Senate Bill 199 will raise tax revenues across the state, it has to go to a vote of the people, as required by 1992’s Taxpayer’s Bill of Rights.

      “The issue is so simple, it’s hard to be very complicated (discussing) it,” Mitchell said.

      “This changes tax policy. It brings in more dollars. The Taxpayer’s Bill of Rights requires that it goes to a vote of the people.”

      Sen. Josh Penry, R-Fruita, said freezing property tax rates would force property owners in Mesa County and other growing areas to pay substantially higher taxes.

      Under current law, mill levies, which are used to calculate property taxes, ratchet down as property values rise, because of an interaction between the 1994 School Finance Act and various constitutional provisions, including TABOR.

      By freezing mill levies, Senate Bill 199 would prevent the state budget from shouldering more of local education costs every year when property-tax receipts would either level out or decrease under the ratchet-effect.

      Preventing a decline in mill levies, however, could mean a significant increase in property taxes for Mesa County residents.

      The median value for a single-family home in Mesa County rose 29.8 percent, from $151,000 two years ago to $196,000 this year, according to figures released Tuesday by the Mesa County Assessor’s office.

      “When you strip it all back,” Penry said, “this is a huge tax increase on small business and senior citizens … and does nothing to address the state education fund.”

      Over these concerns, Senate Democrats blocked Republicans’ attempts to delay and kill the bill.

      Gov. Bill Ritter signaled his intent to sign Senate Bill 199 when he announced shortly after its passage that he was pleased with lawmakers’ “vital step toward halting the growing inequity between the state and local share of education financing.”

      Ritter made the mill-levy freeze one of his office’s major policy pushes this year, alongside reforming the Colorado Oil and Gas Conservation Commission and doubling the state’s renewable energy standard.

      Both of those reforms cleared the Legislature earlier this year.

      Senate Bill 199 could become law as early as this week.