RE-2 District Representatives Warn of Future Impacts for Eliminating Levy
Ever since the school board election took place in November 2021, actions of the elected RE-2 District panel have received public scrutiny like never before.
And now this review has extended into the subject of tax dollars allocated by the city.
Last week, the Woodland Park City Council discussed options of what they could do with a sales tax hike that was approved by the voters seven years ago to help the school district with capital needs.
Recently council members have raised concerns about how the money allocated to the school district was being used. Some elected leaders want to see a sunset put on the previous tax initiative, and others would like to see it repealed altogether.
During last week’s regular council meeting, talk focused on bringing the intergovernmental agreement (IGA) for the sales tax increase up for review. There was no discussion of repealing the sales tax, but some council members said that the city had the authority to do so, if desired.
Back in 2016, a group of citizens put together a ballot initiative to raise sales taxes in Woodland Park by 1.09 percent. At the time, the school district was struggling with decreasing enrollment numbers and there were needed projects to repair school district buildings.
The citizens voted in favor of the ballot measure by a large margin. But along with a sales tax increase in the city, the ballot measure also called for a decrease in property taxes that the school district normally would receive.
But since this tax was implemented seven years ago, the state of the school district has changed. Last year, the Merit Academy was chartered into the district, following much support from the current school board.
As part of their application, the charter school asked for a per pupil distribution of the sales tax allotment.
The sales tax increase is collected by the city and given to the school district through the IGA. The agreement would then be reviewed every few years.
According to Councilmember Carrol Harvey who was on council in 2016, it was not clear as to how often the IGA would be reviewed by the city to make sure the school district was spending the money on items in which the tax was intended for. She said that the original agreement called for the IGA to be reviewed in 2021.
“The landscape has changed and the charter school has been authorized to receive per pupil distribution of this tax,” Harvey said. “This at least requires the charter school and school district in their budget to justify how they are spending the money.”
The point of bringing up the topic last week was to change the agreement to enable the council to review it every year. But as part of the original package, Harvey noted the council could choose to end the sales tax increase.
“As a point of information for the community and the council is that we could decide tonight in this forum to end the tax, right now we could do that,” Harvey explained. “The council also could recommend a phasing out of the tax. Or we could put a sunset on the tax. But this idea does not do that it just clarifies some of the loose ends in the original IGA. Our recommendation to the city attorney and city manager is to clean up this IGA and then engage the appropriate representatives from the district.”
The council also outlined concerns with the $4,500 the city charges the school district to process and distribute the sales tax. According to the city’s Finance Director Aaron Vassalotti, the city spends closer to $30,000 each year to distribute the taxes to the district.
When the IGA gets reviewed every year, the city could have the option of raising the amount the city charges.
During public comment on this issue, Gwynne Pekron the Headmaster of Merit Academy, explain the ballot measure in more detail, since she served on the school board when it was passed by the voters. She said that at the time of this sales tax proposal, school officials realized that increasing property taxes was not the answer to the financial difficulties they were experiencing.
This point was stressed by board representatives at last week’s discussion, who warned of financial repercussions for the community if this tax goes away.
School Board Vice President David Illingworth II addressed the council and said, “I do think that it’s absolutely accurate that if the sales tax were to go away, that the entire community would see property taxes rise. “That is chiefly the way the state requires local funding for the school district.”
He said again that the council needs to keep in mind that an elimination could lead to property taxes going up. “I am hearing and seeing some appetite from the council for revisiting the sales tax to sunset it or repurpose it,” Illingworth said. “I think everyone should keep in mind that that would lead to an increase in sales tax almost certainly. And it would fall hard on a lot of people.”
But Harvey, a veteran council member, stated that this explanation is not totally accurate.
She explained that the city could eliminate the sales tax increase or repurpose it without raising the property tax rate. Through the Taxpayer Bill of Rights, the city council can lower taxes, but they cannot raise them without a vote from the citizens, noted Harvey.
But if the sales tax increase was eliminated, the district or the state could ask voters to raise the property taxes to make up for the revenue generated from the sales tax increase, according to the council member.