Officials defend sales tax
Decision on legality of Steamboat's half-cent tax expected Monday
March 10, 2004
State Rep. Al White believes he has the votes to fend off proposed legislation that would make illegal Steamboat Springs’ half-cent sales tax for education.
White, who represents Steamboat and is a member of the House Education Committee, plans to propose an amendment to the legislation early next week and said he has enough commitments from fellow committee members for that amendment to pass.
“I have a high level of confidence,” White, R-Winter Park, said Wednesday. But there are no guarantees in politics, he added.
The amendment comes in response to a school finance bill proposed Tuesday by Rep. Keith King, R-Colorado Springs.
The 19-page bill includes a one-sentence provision that would outlaw school districts from accepting money generated or donated by another governmental entity, such as a city or county.
The provision is aimed at Steamboat’s half-cent sales tax, which generates about $1.8 million every year for Steamboat Springs School District programs. A small portion of the revenue generated from the tax goes to educational programs outside the district.
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King, who said he learned of the sales tax last summer during a visit to Steamboat, is concerned it violates provisions of the state’s Public School Finance Act and a constitutional decree that the General Assembly provides a “thorough and uniform” system of free public schools throughout the state.
While school districts are allowed to accept donations, gifts and grants and to use property taxes and mill levy overrides to generate revenue, Steamboat’s half-cent sales tax is an ongoing source of revenue for the district, King said. Districts are prohibited by law from instituting sales taxes for revenue.
“This is totally different than anything else we have in the state,” King told the committee during a hearing Wednesday.
Superintendent Donna Howell and attorney Richard Lyons defended the legality of the sales tax at the committee hearing.
The community, not the school district, initiated the sales tax ballot measure, Howell told committee members.
Lyons said the district’s right to accept revenue in the form of donations from the nonprofit Education Fund Board is legal. He said the district’s position is supported by Colorado Supreme Court decisions.
Lyons also argued the language in the bill would have unintended ramifications statewide, such as a district’s ability to accept D.A.R.E. funding or police funds for crossing guards at busy intersections near schools.
Christy Chase, a staff attorney for the General Assembly’s Office of Legislative Legal Services, gave a differing opinion in her testimony.
“It appears a court may rule that the sales tax the city of Steamboat Springs is levying may violate the (Public) School Finance Act and the (state) constitution,” Chase testified. She also said the language of the provision wouldn’t exclude districts from entering shared facility agreements.
Rep. Lynn Hefley, R-Colorado Springs, questioned whether the sales tax issue would have surfaced had the school district not been involved in a charter school controversy.
King, the House majority leader, has been critical of Steamboat’s refusal to accept a Montessori charter school application and is the sponsor of a bill that would create an alternative chartering authority.
But King called “ludicrous” any suggestion the provision in his bill was connected to Steamboat’s stance on charter schools.
Howell said she asked King during a meeting Tuesday whether the provision was retaliation against the district.
“It’s a fair question because some people make that connection,” Howell said. “I posed that to him, and I felt I had to. He assured me there was no connection.”
King appeared to soften his stance on the provision after the hearing. He said he will spend the next couple of days considering the issue and drafting an amendment of his own. King would not specify what that amendment might include, but said it would be less sweeping than the current language.
As currently written, the legislation, if passed, would force the district to make considerable program changes.
“We’d be looking at significant reductions in programs and increasing class sizes,” Howell said. Implementing a Montessori program at Strawberry Park Elementary School — the result of the years-long dispute between the district and the charter applicants — also would have to be reconsidered if the sales tax revenue is lost.
“We’d have an obligation to put everything on the table,” Howell said. “I don’t want to do that. I think (the Montessori strand) is an appropriate solution to a conflict within our community.”
The House Education Committee is scheduled to meet again Monday, when amendments to the school finance bill can be proposed and the bill can be put to a vote. Howell and Lyons said they may attend that meeting, though testimony won’t be taken.
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