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Shift in Colorado's School-Aid Formula Weighed

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Colorado legislators are considering several bills that would alter the way the state collects and distributes aid to public-school districts. But some observers believe any changes will be deferred so that a study group can be appointed to examine school finance in detail.

The Colorado Supreme Court ruled in 1982 that the state's 1973 school-finance statute, while seriously flawed, does not violate the state constitution. (See Education Week, June 2, 1982.)

State leaders have acknowledged that the formula does not go far enough to narrow the gap between wealthy and poor districts and have been discussing ways to achieve that goal without taking money away from wealthier districts or imposing new taxes.

Two pieces of reform legislation have already cleared the House Finance Committee this session. One of the bills, sponsored by Representative Chris Paulson, would earmark a portion of the state's sales-tax revenue for schools; aid to education now comes out of the state general fund, which is made up of receipts from sales, income, and miscellaneous small taxes.

Earmarking the sales tax would yield about $730 million this year--about the same amount the state is now spending on aid to school districts, according to Dan Stewart, supervisor in the school-finance division of the state department of education. "This would not be a windfall for the public schools," he added, noting that the bill places a 7-percent cap on annual growth in sales-tax revenue. "If there is not enough money from the sales tax, there would not be as large an appropriation for the schools. And districts would still rely on the property tax."

The second bill to pass the finance committee, sponsored by Representative Paul Schauer, would provide voters in low-spending districts with an added incentive to increase local property taxes. Current law provides state funds for "power equalization," or a partial state subsidy of property-tax increases approved by voters in poor school districts. But the current statute requires local taxpayers to pay the entire cost of any increase for the first year. The Schauer bill would make state equalization aid effective immediately upon local adoption of an increase, in theory increasing the options available to taxpayers in poor districts who now reject levies because they cannot afford the first-year cost.

The state board of education, Mr. Stewart said, does not take positions on specific bills but in principle supports finance-reform efforts.--pc

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