Constitutional Amendment 73: Denver Decides Ballot Forum 10-13-18


hello I’m Tamra banks and welcome to
Denver decides this Community Partnership is dedicated to accessible
and transparent elections a partnership includes the League of Women Voters of
Denver in turn a bur hood cooperation and is presented by Denver atetv our
mission today is to present a ballot issue form in anticipation of the
general election coming up on Tuesday November 6th among the numerous
amendment in ordinance questions on this year’s ballot is constitutional
amendment 73 now if approved this measure would increase state taxes for
preschool through high school public education beginning at my right is
Kendall a from the Colorado Association of School Boards who will be speaking in
favor of amendment 73 and on my left is Linda Gorman from the independence
Institute who will be speaking against amendment 73 welcome to you we will
begin with one minute and 30 second opening statements from both speakers
Kendall a you’re up first speaking from for amendment 73 and you have one minute
and a half thank you Tamra Colorado has one of the
fastest growing economies in the country and has had that economy for some time
now nonetheless we spend about $2,800 per
kid less than the national average for our public schools we we lag behind such
states as Mississippi and Alabama in our per pupil funding and has led to teacher
shortages it’s made us less competitive with our wages particularly in the rural
areas where the average teacher salary is about $38,000 a year amendment 73
would permit Colorado to attract and retain highly qualified teachers build
better science vocational literacy and mental health programs in our schools
right now the Colorado tax code is upside down those who are high income
earners pay a lower percentage of their income
in state and local taxes then does the average middle-class household amendment
73 would put that tax code right side up and have our wealthier homeowners paying
a similar percentage of their income thank you and now an opening statement
from Linda Gorman speaking against amendment 73 well we’ve had extensive
research on student achievement over the last 25 years and how it relates to
spending and what we’ve seen is that there isn’t any relationship Colorado
pretty much spends on average for the state’s it pays its teachers about
average what matters with schools that you have to change what schools do not
what they spend at current levels of spending if you want student
opportunities to increase and what this amendment does is it simply locks
existing spending in place it throws more money at the schools but it doesn’t
change what the schools do Colorado school spending is currently the highest
it’s ever been and the rate of increase is faster than it was before the Great
Recession what this amendment does is tax productive activity we go from a
flat tax where everybody pays the same percentage of their earned income to one
with very progressive divisions the thing here is that it’s focused on small
businesses most of the businesses in Colorado file as individuals the reason
this is structured the way it is is so that it taxes the businesses but not the
voters that’s why it starts at 150,000 so what you get is you get more of let’s
see if you tax something you get less of that activity
this amendment taxes productive activity and then sends money that it’s taken
from that product of it activity to the schools
it also will increase your property taxes and so that harms homes that harms
families and that harms children now Linda you will have 30 seconds for a
rebuttal to Kendall A’s opening statement oh well I think that we can
argue about the numbers all day long we are publishing a paper that shows the
numbers Colorado school spending has been increasing just fine the question
is what schools do not what their spending
however we know for sure that tax increases are bad news for
businesses this will give Colorado the ninth highest marginal tax rate in the
country people who are taxed at this level are very mobile and they will
leave we have seen them leaving Washington and California and Illinois
and the reason that Colorado has such a strong economy is that it has had a
stable and low state tax rate for the last 30 years thank you and now can you
have 30 seconds for well I would encourage everybody to go to the tax
calculator on the Colorado school finance projects website I figure it out
for yourself a small business owner in Longmont Colorado
owning a four hundred thousand dollar home and a four hundred thousand dollar
business property and earning three hundred thousand dollars a year would
get a tax savings from this measure of somewhere between 500 and 800 dollars a
year by the time you factor in the property tax cut that he would or she
would enjoy actually funding does matter for our schools and there’s a lot of
research that says particularly for young students it matters a lot thank
you now for our cross-examination rounds
beginning with can delay you may ask Linda Gorman a question and Linda you
have one minute to reply miss Gorman I know that the independence Institute has
on the ballot a fix the damn roads proposal which would propose to fund
significant improvements to our transportation system without a tax
increase which means that the funds for to cover that debt will come out of
other parts of the state budget meaning k12 how do you intend to address
those additional cuts from k-12 it doesn’t cut anything we’ve already been
paying the transportation bonds I think what’s more interesting is that you
claim that property taxes won’t fall property taxes will fall property tax
rate for the state is scheduled to go down to six point one one percent next
year this amendment fixes it at seven so this amendment does in fact raise
property taxes now Linda you can ask can a question and can you’ll have one
minute to answer can you describe any way that Kerr
schools could spend less without harming student education is there any fat in
the system at all I think there is very little fat in the system but it depends
on the school district that you’re looking at some school districts are
much better off than others most of our smaller more rural districts
and most of our districts in not wealthy neighborhoods are operating very close
to the bone and could make very few cuts and have made many many cuts over the
last decade so no system-wide I don’t think there’s no waste in a school
system okay all right so let’s continue with a cross examination and now this
time is Gorman you can start with asking a question to mr. delay and mr. delay
you have one minute to reply amending 37 increases state funding for schools
fairly dramatically and what we’ve seen is that in 19 from 1987 to 2007 we’ve
shifted from local funding where local districts paid about 57% of total school
expenses to state spending where now local districts only control 36% of the
money that’s a big shift this is going to shift it to even more state control
of local districts do you think this has any implications for students I do think
it has some implications for students but I think the more interesting
question is why has that shift occurred Ms Gorman said a minute ago that
property taxes will go up if this passes that is flatly false the current
residential assessment rate is 7.2 percent it will fall to 7% more
importantly the assessment rate for businesses all businesses farmers and
ranchers will fall from 29% to 24% the reason we have a problem with local
funding is the operation of formulas in our Constitution namely Tabor and
Gallagher amendments and this amendment will take a run at fixing the Gallagher
problem as far as school funding is concerned and over time I would expect
the local share to begin the climb again as a result of growth all right now Ken
it’s your turn to ask Linda a question and Linda you have one minute to answer
the last time I checked the independence Institute believed that to the extent
there was any funding need in public education
it could come from cuts to our healthcare expenditures Medicaid and the
like is that still the position of the independence Institute and if not how
would you get more money into k-12 well the state just spent a fortune
attracting north face here so it basically has tax cuts to attract
businesses they paid Lufthansa airlines about three hundred thousand dollars so
that it would do a Denver to Frankfurt route so that state officials could go
Lobby Germans to come here and make businesses the state has an awful lot of
money that appropriates to things that it doesn’t need to do so you don’t have
to talk about cutting Medicaid or cutting the school budget in order to
shift funds around where they’re most needed the point of Tabor is that state
cannot waste a bunch of money and then go back to taxpayers and demand more
without asking you about it that’s a good thing because it controls this
growth of state government and state government growth is not always a good
thing for the productive people that live in the state next round can you get
to go first with your question and again Linda you’ll have 60 seconds in addition
to the if we if Colorado has one true tax group of people that pay more taxes
than they should it’s the business property tax payers right now a business
owner will pay owning a home and a business worth the same amount of money
will pay four times as much tax on his or her business property as on her home
I’m curious as to how the independence Institute would fix that problem and I’m
curious as to whether it believes this is a problem this doesn’t do anything to
fix that problem it simply fixes the state assessment rate and here we get
into the tax weeds so really fast let me see if I can give you an idea when
Gallagher was passed state rates on residential property were right the
amount of property tax and residential property was rising very very quickly
because houses were rising in value very very quickly and you paid a fixed
percentage of your house price if you were on a fixed income
this meant you might have to sell your house Gallagher was passed to ensure
that residential property and commercial property pay roughly the same amount of
total property or are exposed to roughly the same amount of total property taxes
so what that means is that as home prices have ballooned in Colorado in the
last four or five years the state assessment rate the amount of your
property that subject to tax by local districts has had to shrink in order to
keep this ratio of the same total property taxes paid have gone up because
as the value Rises you keep being more technically paying more taxes but what’s
happened is that you aren’t that’s limited
thank you for your exposure thank you that’s time now ms govern your next
question for mr. delay so we know that increasing taxes on small business and
business in general reduces productive activity and we also know that more
school spending has not improved student achievement over the last 25 years the
states that spend more get the same amount of achievement increases the
states that don’t so why do you think that it’s better to take this money from
productive businesses reduce their activity and give it to the school
bureaucracies so they can spend it what benefit are we going to get out of this
how do the children benefit this is a classic when did you stop beating your
wife question absolutely it’s no question it’s not true it’s not true
that money does not have an impact on student achievement particularly for
students from poverty or coming to school with disabilities and there are
plenty of studies today that show that to be the case and secondly it is the
case that we have taken out of our k12 system over the last ten years somewhere
around fifteen billion dollars we are still underfunding the state formula by
about 700 million dollars a year and there’s no prospect that we can get back
to where we were before the recession started a decade ago without some
additional funding in the system I also do not accept the proposition
that we are punishing small business owners as I said a few minutes ago with
the business property tax cut thrown in most of our small business owners are
actually going to have a tax cut if this passes that brings us to our final
cross-examination round in Linda Gorman you will start off with a question for
mr. Joe Lane you have one minute to answer sir as a policy matter best taxes
are ones that are low and on a broad basis and so why in this amendment do
you have such huge progressive tax increases that have been shown to be so
damaging when you could the people who wrote it could have just simply said
we’re going to increase taxes on everybody to five point six three
percent from four point six three percent so why the choice to a heavily
progressive tax increase that makes Colorado school funding more and more
dependent on a very small number of fairly wealthy people who are mobile and
likely to leave the state is that good policy well I would first concede that’s
a fair question I would second point out that if you’re going to think about tax
burden it’s important to think about not just income tax but sales tax and
property taxes as well and if you look at the percentage of income that goes to
pay taxes by a typical middle-class homeowner in Colorado it’s somewhere
around eight percent of their income and a millionaire it’s somewhere around five
percent this would begin to make those percentages about the same the second
thing I would say is we have to pass it and this is not something you can go to
legislature and argue about and have a good sound argument about what good
policy is and think about how to do it we have to go to the voters and get
their approval and there was a judgment made that this was a better approach
okay mr. delay your final question for MS Gorman and Lynn do have one minute to
answer thank you I think that my understanding is that as a general
proposition all ills in public education could be fixed in the minds of the
independence Institute if only we would go to a universal voucher system
if that’s true could you explain how that would work and how it would improve
public education in Colorado well this amendment is actually about
only increasing the funding for public education in Colorado Colorado already
has charter schools they’re some of the most effective schools in the state but
they’re underfunded compared to K through 12 public schools so I think
what happens with this amendment is that what you’re doing is you’re just
throwing more money at existing public schools that have been doing not as good
a job as certain other forms of Education the state that actually
decreased its spending on public education was Florida it is the state
with the largest increase in student achievement and that is because Florida
stopped doing things in the same way it’s always done them it realized that
what schools do are far more important than what schools spend and Colorado
school spending contrary to my opponents claim is now at the highest level it’s
ever been it’s more than recovered from the recession and it is doing quite well
we don’t need to spend any more money on the schools thank you our next a few
rounds will feature our speakers responding to questions submitted by our
forum organizers each speaker will answer each question and the responses
will be one minute we’ll begin with Kendall a who is here
speaking in support of amendment 73 mr. delay the first question is could and
should the issue of education funding be addressed at the Statue statute level
rather than amending the Constitution sure if we could we have in Colorado put
into our Constitution essentially our tax code Tabor and Gallagher are both in
the Constitution amendment 23 is in the Constitution if I had my druthers I take
all three out and then the legislature could address school funding however we
do have those things in our constitution and we cannot increase funding without
going into the Constitution itself to permit some change amendment 73 does
have the virtue that it changes the Constitution only where it needs to
and it puts the rest of the authority over to the legislature for example the
legislature has the authority and the power under amendment 73 to make
adjustments in these tax rates for inflation in the future it’s Gorman you
can answer that yes would you like me to repeat um I think it is bad policy to
put fiscal matters like this in the in the state constitution one of the good
things about the taxpayers Bill of Rights is the legislature has to ask you
before it takes more of your money if you’re a legislator in the Statehouse
you do not get legislature of the Year awards by saying no you can’t have any
more money when people come down and ask there’s a natural bias towards
increasing spending if things reside in the legislature and you need the
taxpayers as an outside check so the taxpayers bill of right provides a good
check on the legislature and this amendment blows a hole in the taxpayers
Bill of Rights and that is not a good thing in terms of fiscal policy this
requires the same amount or increasing amounts of spending on public schools
even if enrollment Falls even if technology improves and we don’t need to
spend as much on kids as education to get good results you still have to spend
the same amount mindlessly because these taxes can only be used for K or
preschool through 12 public school spending next question from organizers
for our guests and MS Gorman you will respond first you have one minute to
answer opponents of amendment 73 claim it will raise corporate taxes nearly 30
percent will 73 negatively affects small businesses and startups yes it will
negatively affect them the reason is that one thing people don’t understand
is most small businesses are passed through corporations and they file as
individuals let me give you a simple example I am supported by a small
business so one time we needed an extra air compressor for our shop those things
are very expensive on industrial scale thirty five to fifty thousand dollars
where does a small business get that money it gets it from its profits last
year so you have to save from whatever your income was last year in order to
find your air compressor next year this amendment would take that money from me
because I file as an individual and I would be able to save less to grow and
expand my small business so this is very damaging you have to think about low
broad tax rates not highly progressive rates on people who are very productive
and happened to be creating a lot of jobs if amendment 73 passes 92% of our
taxpayers would not pay more taxes we would have still the third lowest
property tax rates in the nation as a state we would have the ninth lowest
corporate tax rate in the nation and for those making $200,000 or less in taxable
income we would they would be paying the 10th lowest income tax rate in the
nation if you factor in as I suggested property tax cuts for business owners
most small business owners even when they flow that income through to
themselves will see a net tax savings if this passes the truth of the matter is
you cannot have more funding for public education without increasing taxes
somewhere this is an effort to make our tax system more equitable between income
classes and an effort to fund more schools let’s continue with a question
submitted by forum organizers can you will respond personally have one minute
to answer the question is what do you predict who will happen to education
funding in Colorado schools if 73 does not pass well as long as the economy
stays strong it will probably stay roughly where it is right now
incidentally if you adjust for inflation and caseload that is the number of
pupils we are not funding where we were ten years ago still I think that the
next time we have a recession we will see further cuts to our education system
it’s interesting that even though we’re funding
at the same level we were a decade ago we have passed much additional
legislation there is a there is a the obligations on the schools are much
heavier than they used to be I would just say Florida was brought up we do
better than Florida Florida spends a lot more money than we do on kids and if we
could get to where Florida is I’d feel pretty good now Linda your response well
I think what’s going on here is the claim that school spending has not
recovered from the recession is simply false we published the state data they
try to put this in the Blue Book we argue that you can’t do this because
state spending has not been reduced and in fact it hasn’t been reduced it’s
increased all the time you don’t need to increase tax rates to get more spending
if you keep low tax rates and people are growing the pie then a four point six
three percent slice of a bigger pie is more money for schools and that’s why at
Colorado school spending has continued to increase since the recession there
were two or three years when it cut back because the recession was so bad that
everybody’s spending had to cut back but now it’s recovered and it’s growing even
faster so before you monkey around with tax
rates you need to be very very careful about what they’re likely to do to the
businesses that are staying around because children do not do well when
their families are stressed and one of the ways you stress families is to make
it difficult for people to get jobs thank you and our final round of
submitted questions and miss Gorman you will be the first to answer if 73 is
passed will any of the newly raised money go to unfunded retirement benefits
for teachers and is that a reasonable use of new tax dollars well I the major
amount of this money simply goes to districts in an out rate per pupil size
grant so I would assume that a lot of the districts which are under stress
because pear has been unfunded for 20 years probably will use some of it to
you know fund their para obligations because money is fungible at the
district level and they can spend it on whatever they want is this a good use of
the funds I you know there are lots of reasons to
say that it isn’t I think if you want to put para on a stable basis the people
who are getting the benefits from the retirement should pay for it on the
other hand the state is systematically underfunded it for 25 years so I think
probably a legislative grant or something like that so the general
taxpayers bear the cost would be a good thing on the other hand if you just keep
doing what you’ve been doing it’s not clear that the money will be used to
defray para costs it could be spent on something else and we still would have
an unfunded pension system this amendment is very interesting in that it
has very few controls on how this money is spent and now your response mr. doing
well the money that’s raised by a minute seventy-three will go to our school
districts almost every school district in Colorado school districts
representing eighty six percent of our students has adopted a resolution
describing how they will use that money most of it will be to improve local
programs to make their salaries more competitive again I I just had a
conversation as recently as two weeks ago with a superintendent in rural
Colorado who just lost a crackerjack math teacher to the front range because
the Front Range district was going to pay twenty six thousand dollars more a
year then they could pay in that rural district that’s a problem that is not
amenable to be repaired without additional money in the system as far as
the pension issue we just had a major bill go through this last year that was
designed to fix that problem school districts do pay a percentage of salary
into that system as to employees and I have no reason to believe that that that
that will not continue in the way that it was designed thank you okay that
brings us to the end of the Q&A segment and we move on to closing statements
each speaker will have a minute for a closing statement and we will reverse
the order of the opening statements which means we’ll begin with Linda
Gorman you have one minute for your closing statement Colorado School
spending is an all time and the legislature can always provide
more money if it feels that it’s necessary there’s no reason to put this
in the Constitution we do not need to increase income taxes and progressive
fashion in the state because one of the reason the states has a good economy is
that it has a low widely based flat tax of 4.6 3% this amendment would change it
that’s not a good idea finally this amendment raises property
taxes on homes my opponent has said that it doesn’t that’s not true next year the
state assessment rate is slated to go down to 6 point 1 1% which people tend
to ignore in this debate by saying well it’s going to go down from 7.2 percent
to 7 percent so you’ll be better off well I would be a heck of a lot better
off if it went to 6.1 1% so what we see here is a lot of discussion about school
chat school spending hasn’t increased when in fact it has property taxes are
not going to increase when in fact they will small business won’t be affected
when in fact they will thank you and now a closing statement from kinder Lane the
one ticket we know that works for every child to have a productive life a
successful career is a great education we know that and this state set out 40
years ago to make sure that zip code didn’t matter in terms of the quality of
education that you got we are back to a system where the zip code matters
dramatically we have funding differentials between school districts
between 2,000 and 3,000 dollars per kid mm and $3,000 per kid and the districts
on the wrong side of that divide our rural have high percentage of their
students in poverty and those in equities can be addressed significantly
if amendment 73 passes and contrary to my opponent’s contention today the
property tax system in our tax system will remain some of the lowest in the
nation and will be more equitable when you look at it across districts and
across incomes thank you now it’s the audience’s turn
let’s show our appreciation to our guests for their participation thank you we hope we’ve given you a fair look at
the pro and con arguments for amendment 73 our thanks also to the Denver decides
partners which include internet’ burr hood cooperation and the League of Women
Voters of Denver Denver decides is presented by Denver eight TV remember
the election is Tuesday November 6th let your voice be heard be sure you are
registered to vote and make sure to vote for complete election information online
go to WWE as comm I’m Tamara banks thanks for joining us

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