District won’t see windfall from higher taxes
Complicated school funding apparatus means that as local funding increases, state support falls
Larimer County, like much of the rest of the state, has seen spiking property assessments, attributed by officials to a booming housing market and changing legislation.
The beneficiaries, it stands to reason, are the large taxing districts that fund their operations through collected property taxes, and among the largest taxing districts in most parts of the state are school districts.
But because of the way schools are funded in the state of Colorado, that often doesn’t turn out to be the case.
The state of Colorado uses a complicated formula to determine how much funding each school district needs, based on factors including the number of students, with adjustments made for the number of at-risk students, cost of living, and the current state of Colorado’s total budget, and if local property taxes don’t provide that level of funding, the state will step in and fill the gap.
The Public School Finance Act, passed in 1994, is, according to the Thompson School District’s Chief Financial Officer Gordon Jones, a means of funding school districts more equitably by introducing a state funding component to district’s budgets, rather than simply a local one that can vary widely based on the affluence of nearby neighborhoods.
Some school districts, particularly in ski towns like Vail or wealthy oil communities that have extremely expensive properties, cover most or all of their funding needs with property taxes, and don’t require any state funding from the School Finance Act.
Loveland typically covers just under half of its funding needs locally, and the state makes up the rest, Jones said.
But in situations where the local share increases, the state share goes down, so the district always stays at the number determined by the state’s formula.
“The analogy I always use is that the bucket never overflows,” Jones said. “If one level of funding goes up, the other goes down, but it stays at the same level.”
That means that the Thompson School District won’t see any major windfall from the rising property valuation spike, which locally reached 37% over the last two years.