If you’ve been tracking today’s election, you may not think there’s a measure to increase education spending on the ballot.
But education funding could eventually take a big hit if Proposition HH, the statewide property-tax relief measure, is defeated, according to some analysts.
In the HH Fiscal Impact Statement, the nonpartisan Colorado Legislative Council Staff reports that “an estimated $152.3 million will be transferred to the fund in FY 2024-25, and $269 million will be transferred in FY 2025-26, with increasing amounts expected in future years.”
This is separate from the approximately $800 million council staff expects the state will be obligated to send to local school districts to make up for their lowered property tax revenue.
Other analysts and advocates see the measure as providing much-needed money to shore up funding for education that would be lost by reducing property taxes. And in the long run, they say, it could provide billions of state budget dollars to education.
“Colorado has been underfunding public education for over three decades,” says Lisa Weil, the director of Great Education Colorado, which advocates for sustainable education funding. “Prop HH is designed to give property tax relief without making that underfunding even worse. If Prop HH doesn’t pass, the danger to schools is that the legislature or the voters will respond to recent spikes in property values by passing property tax cuts that won’t protect school funding.”
In fact, both Democrats and Republicans are advocating for property tax reductions, but conservative opponents of Proposition HH argue that the Legislature should simply reduce property taxes, which help fund education, rather than tie property tax reductions to TABOR spending cap adjustments — as mandated by Proposition HH.
Proponents of HH argue that the measure’s TABOR adjustments, which are rooted in raising the cap on state spending by 1% annually, are needed to replace property-tax money (lost due to property tax cuts) that funds education.
“Any measure that tries to reduce property tax revenue has to account for what happens to school funding,” Scott Wasserman of the Bell Policy Center told Chalkbeat Colorado. “Opponents try to act like a bait and switch. It’s not a bait and switch.”
If Proposition HH passes, schools would get $125 million next year and over $2 billion by 2031, according to state estimates.
Proposition HH may do more than keep schools from losing money when property taxes are reduced.
“Prop HH also has a potential upside for schools: in the long run, it may allow the state to start paying back the $10 billion debt to students that Colorado racked up over the past 13 years,” says Weil. “For once, students could receive the benefits of a strong economy.”
The amount of money that would be available for schools — beyond replacing lost property-tax revenues — depends on economic conditions.
Predictions about those future conditions vary widely. The Common Sense Institute, a conservative think tank, estimates that under Proposition HH, state education funding would increase by $9.6 billion over the next decade, as the need to backfill lost revenue from property taxes decreases and as the rental-assistance funds required by the measure are provided.
But, as the Common Sense Institute study projects, it’s possible that significant funds could be added to the state education fund, which is currently below its voter-mandated level.
In fact, Common Sense Institute Director Kelly Caufield told Chalkbeat she’s surprised the measure provides so much money for education without enough “guardrails.”
