Colorado Education-Funding Case Highlights Failures Of Tax-Constraint Laws

Students in Colorado’s Center schools share textbooks and learn their geography from globes that still depict the Soviet Union, Center Superintendent George Welsh testified Monday in the opening day of a landmark case over the state’s flagging support for K-12 education.

Ranked 40th in the amount spent per student for 2008-09 school year, Colorado is coping with a structural gap in its education budget of between $1.4 and $3.6 billion per year. But plaintiffs in the Lobato v Colorado case are not asking the court for additional funds, but instead to mandate the state change its school-funding model.

That model has underfunded public schools for decades, thanks to the “constitutionally impermissible” shortfall created in large part by the state’s Taxpayer’s Bill of Rights. TABOR–a state constitutional amendment that forces residents to vote on all new tax hikes–limits taxpayer revenue and thus “pits state programs and services against each other for survival each year,” according to a Center for Budget and Policy Priorities report:

“TABOR worsened this [education funding] situation in two ways. First, it placed further restrictions on local governments’ control over their own revenue: TABOR limits the annual growth in local property tax revenue to the sum of inflation and a growth factor (such as the change in student enrollment), and it prevents local governments from raising property tax rates without voter approval. Second, by limiting the amount of revenues the state could keep, TABOR made it impossible for the state to maintain its own funding commitment to education — much less to continue making up for the loss of local funding.”

Since TABOR passed in 1992, Colorado’s education budget has failed to keep up with its needs, sending average per-student funding plunging more than $600 in relation to the national average by 2006. In 2007, teachers made nearly 11 percent less than the national average. At the same time, TABOR forced cutbacks that doubled the rate of low-income children without health insurance in 12 years and drove higher-education spending per student to a 15-year low in 2009.

Coloradans shouldn’t have to choose between textbooks and health insurance when it comes to its children. While the Lobato trial process will drag on for months, it demonstrates that TABOR is a failing policy that should serve as a warning for anyone looking to pass further laws mandating tax caps.

And yet GOP lawmakers are pushing for a balanced budget amendment that would pose a similar threat. Sen. Mitch McConnell (R-KY), who criticized elections as “not working” on the Senate floor last month, wants an amendment that would force a two-thirds supermajority to approve each new tax increase, effectively capping government revenue.

Sarah Bufkin