Toe to Toe with the Treasurer on a Touted Tax Increase

In yesterday’s Pueblo Chieftain, my opinion piece arguing the case against Governor Bill Ritter’s property tax hike to subsidize state preschool and kindergarten programs ran as “counterpoint” to the argument for the Governor’s proposal by State Treasurer Cary Kennedy. Kennedy skillfully avoided discussion of the back-door tax hike while plugging the benefits of the plan for Pueblo.

How? Under the Governor’s revised plan, 33 school districts will receive a tax cut while most districts will receive a tax increase. Pueblo happens to fall in the latter category. But that doesn’t take into account the plight of taxpayers in Grand Junction, Englewood, Pagosa Springs, Wray, or nearby Alamosa, among others.

But two points are worth repeating from my op-ed. First, the new version of the tax increase will raise an estimated $55 million to offset an $84 million increase to early childhood programs while somehow simultaneously saving the state budget:

The remaining $29 million would have to come from the current state budget. If the money isn’t available in the general treasury, lawmakers would have to raid the State Education Fund. Amendment 23 created the fund as a means to provide additional dollars to kindergarten-through-12th grade public schools.

However, the governor’s office has said the plan is necessary to save the State Education Fund from bankruptcy in four years. Paying out $29 million of state money on new programs wouldn’t solve the alleged problem. Even so, the bankruptcy projection is based on a worst-case scenario. A nonpartisan legislative staff report shows that Amendment 23’s school spending mandates are not expected to drain the fund.

And while the Taxpayer’s Bill of Rights has effectively cut property tax rates in many Colorado school districts, property tax revenues for education have continued to climb:

Real property tax dollars per Colorado student grew 8.5 percent from 2001 to 2005. During the same four years, state school funding increased 15.6 percent per pupil.

Meanwhile, Phil at Clear Commentary makes an articulate philosophical and logical case against the tax increase – his arguments may be roundly ignored by liberal statists, but they are strong and compelling.

The Governor and his team – including Treasurer Kennedy – are trying to cool off the political hot potato of a property tax hike. But I’ll do my part to keep telling you the rest of the story they would rather you not hear.

Update: Read also the Colorado Springs Gazette‘s Sunday editorial with stinging criticism of Ritter’s plan.