Littleton Public Schools will ask voters to approve a property tax increase this fall, hoping to stave off what district officials call “catastrophic” cuts to the district as a result of budget shortfalls caused by the novel coronavirus pandemic.
The district will ask voters in November to approve a mill levy override that aims to raise $12 million in its first year, hoping to offset slashed state funding and increased expenses related to the pandemic.
If the measure doesn't pass, district officials say, LPS could face cuts beginning in 2021 including laying off more than 180 employees, increasing class sizes, slashing funding for mental health and security services, cutting teacher pay, and eliminating programs including Options High School, Village Preschool, and career and technical education programs.
“We can't fix this by reducing a few budget items,” Superintendent Brian Ewert told the school board on Aug. 13. “We would have to drastically alter how we operate. It would reduce the opportunities we offer students of all ages.”
The district, which serves about 15,000 students, is facing reduced state funding of about $18.5 million in the 2020-2021 school year, part of ongoing statewide cuts stretching back to the Great Recession called the “negative factor” — a policy of withholding funds otherwise due to schools under the terms of Amendment 23.
The $18.5 million shortfall is $9.4 million larger than the "negative factor" imposed on Littleton in the 2019-2020 school year. The district has been shortchanged to the tune of nearly $157 million in state funding since 2009, according to district data.
The Colorado legislature approved $3.3 billion in statewide cuts in May as coronavirus wreaked havoc on state tax revenue collection.
The gap between the state cuts and the federal funds this year will be exacerbated by a further $4.2 million in cuts already approved by the LPS school board last fall, caused by rising costs and stagnant state funding, spurring the district to eliminate 17 positions.
The cuts will be offset by $6.6 million in one-time federal funds earmarked for coronavirus-related expenses such as complying with state and local health orders, planning and implementing remote learning options and purchasing sanitation supplies.
The district's total general fund budget for the 2020-2021 school year is $177.8 million.
The total financial impact of the pandemic on the 2020-2021 school year isn't yet known, said Donna Villamor, the district's finance director.
The cost of the TOPS program, an online alternative to in-person learning, could wind up reaching $5 million this year, Villamor said. Paying for coronavirus testing and sick leave for teachers could also prove expensive.
Reserves likely to take hit
Ewert anticipates the school board will dig deeply into its reserves in the coming year, and if the ballot measure doesn't pass, the district could come close to exhausting all but the reserves mandated by the Taxpayer's Bill of Rights, or TABOR.
While Ewert said the district anticipates being able to weather the coming school year without severe cutbacks, funding for the 2021-2022 school year and beyond looks bleak.
A statewide income tax measure that would have raised money for education and other programs failed to gain enough signatures to make it onto the ballot this fall. Other statewide ballot measures aimed at increasing school funding have also failed in recent years. Statewide revenue collection is constrained by TABOR, and the Gallagher amendment, which constrains property taxes.
Marijuana tax revenue is no panacea, Ewert said.
“Proponents of Amendment 64 (which legalized recreational marijuana in Colorado) acted like it would just soak schools with money,” Ewert said. “It was a heck of a marketing gimmick.”
Since Amendment 64 was passed in 2012, the district has received just enough marijuana tax revenue to hire one substance abuse counselor, Ewert said.
State won't be rescuer
“The state will not or cannot help,” Ewert said. “School districts are completely on their own to solve financial problems.”
Currently, district residents pay a mill levy rate of 59.266 toward LPS, or $423.75 per year per $100,000 of home value.
If approved, the district's mill levy override ballot measure would raise the mill levy on homes in the district by 6 mills in its first year, with the option to increase by one mill per year, up to a maximum of 11. The 6-mill increase would be $42.58 per year per $100,000 of home value.
That means on a home valued at $500,000, the measure would increase the annual taxes paid toward LPS from $2,118.75 to $2,331.65.
The amount a homeowner would pay if the mill levy was increased by 11 over five years is difficult to estimate, Villamor said, because mill levy payments are based on the property tax rate, which is subject to fluctuation. If the rate remained steady at 7.15%, a full 11-mill increase would result in an increase of roughly $78 per year per $100,000 of home value.
Mill levy hike would aid capital fund
If approved, the money raised by the mill levy override would not be deposited into the district's general fund, which covers operating and personnel costs, but would go instead into the district's capital fund, and would be earmarked for maintenance costs, technology upgrades and capital construction.
Ewert said the idea is to backfill the capital fund and minimize transfers from the general fund, saying while the district would prefer to simply bring money directly into the general fund, statutory limitations mean they could only go for a set percentage of the general fund, raising at most around $7 million per year, which he called inadequate to cover the district's need.
Littleton Public Schools boasts a long track record of public support for fundraising measures. Voters have approved every local bond and mill levy the district has put before them in recent memory, including a $12 million mill levy passed in 2010 and a $298 million bond measure approved in 2018 and earmarked for rebuilding and overhauling schools districtwide.
The ballot measure is not entirely a response to the pandemic — district officials began discussing the idea late last year, around the time the school board approved a round of budget cuts.
A poll of district residents in January and February — before the novel coronavirus pandemic impacted American schools — found 58% supported the idea of a mill levy override, said district spokesperson Diane Leiker. A followup poll in July found support had dropped to about 50%.
Still, Leiker said, a majority of survey respondents said they would prefer school funding problems to be solved at the local level rather than waiting for the state to help.
School board members acknowledged that asking voters to increase their taxes during a pandemic that has resulted in widespread unemployment and hardship could be a harder sell than previous ballot measures, but said they felt compelled to ask.
“The idea of cutting $12 million makes me sick to my stomach,” said board member Lindley McCrary at the Aug. 13 meeting. “We owe it to students, teachers and schools to at least ask the question.”
Kelly Perez was the only board member to vote against referring the ballot measure to voters at the Aug. 13 meeting, saying constituents have told her it's a bad year to talk tax hikes.
Board president Jack Reutzel said the board wouldn't be doing its duty if it didn't ask voters.
“We never take the largesse of this community for granted,” Reutzel said. “We are humbled by their support. Even in the best of times it's risky, but we have developed a partnership between the district and the community that makes this one of the more attractive places to raise your children … Our function as a board is to find the resources we need to make LPS the place we want it to be. It's a public school district, so we should ask the public what they think. I don't like to lose, but I'd like to ask the question.”
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