Higher property taxes don’t provide extra funding for public education

As homeowners in our community see their property values and tax bills increase, many may assume the additional funds are flowing into our public schools. They’re not wrong – but increases in local property taxes don’t equate to increases in funding for the Boulder Valley School District. The reality of how school funding works is more complex.

What is the School Finance Act?

While Colorado recently passed a new school funding formula, for the past 30 years the Public School Finance Act of 1994 determined the total amount of funding each school district received. 

This calculation considered several factors – including per pupil amounts, funded pupil count, district and student characteristics, and a budget stabilization – to determine the “total program” funding for the school district. For the 2023-24 school year the district received $292,817,683 in “total program” funding.

BVSD received $10,489 for each full-time student – $3,858 less than the national average – in the 2023-24 school year. 

– U.S. Census Bureau

In this article BVSD shares details about how declining enrollment and changes at the state level will affect schools, students and educators across the District.

How school funding is calculated today

School funding is a blend of local sources – property taxes and vehicle registrations – and state sources (state equalization). Local sources are considered “first in,” meaning they are used first to fund the “Total Program” amount set by the School Finance Act. State equalization funds then make up the remainder.

Although the state determines individual school district funding levels, the amount contributed from the three different sources varies according to local assessed property valuation.

As property taxes increase, due to a fixed mill levy (27.0 mills for BVSD) and rising assessed property values, the amount provided by the state decreases.

Because of higher assessed valuation, BVSD receives a larger portion of its revenue from local property taxes. You can see in the 2023-24 budget chart below that the state contribution for BVSD is less than peer districts.

Source: 2023-24 Proposed BVSD Budget

These mechanisms ensure that the “Total Program” funding remains constant, adhering to the balance intended by the School Finance Act, regardless of fluctuations in local property tax revenues. And the state’s contribution helps bridge the gap between wealthier and less affluent districts, so every student has access to an adequate education regardless of their district’s property tax base.

We need partners like Impact on Education, whose support addresses the funding gaps and enhances the educational experiences of BVSD students.

– Dr. Rob Anderson, BVSD Superintendent

By the numbers

Recent increases in funding for BVSD are due to changes in the School Finance Act formula, not changes in property taxes. Over the past few years, the state stabilization factor has decreased and inflation has increased, driving up the amount of “Total Program” funding for BVSD. 

• Local property tax revenue increased from $209.6M in the 2022-23 school year to a projected $282.1M for the 2024-25 school year. 
• Concurrently, state equalization funding decreased from $51.4M in the 2022-23 school year to a projected $13.3M for the 2024-25 school year.

BVSD also receives additional operating revenue through three mill levy overrides, which are property tax increases approved by voters. An additional property tax levy provides resources for capital debt payments for construction programs.

Why this is important

School district budgets are complex and there are many funding mechanisms – including legislation and ballot measures – that influence the resources provided to BVSD. And this complexity is why Impact on Education was founded in 1983 – to protect BVSD from the uncertainties of local and state funding. 

While BVSD navigates these challenges, Impact on Education is here to help. 

Your support for Impact on Education helps ensure we’re able to continue providing supplemental funding and resources to support the needs of students in our community, which prevail regardless of state and local funding. 

You can help by making a gift to support our work and sharing this post with someone in our community.

BEFORE YOU GO

Impact on Education is an independent non-profit supporting the Boulder Valley School District. We depend on the generosity of our community to put our mission into action.

Will you help us provide opportunities and resources to local students?