(Spring 2009) The School Finance Act is funded by both local and state funding. This slide illustrates the revenue sources of the School Finance Act and the flow of money into K–12 education. It is divided by state funding on the top and local funding on the bottom. The state now pays over 60 percent of the cost.
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On the local side, property taxes are limited by the Gallagher Amendment, which maintains the balance of tax collections between commercial and residential properties. It has "ratcheted down" the residential property assessment rate from 29 percent at one time to 8 percent currently. This means less funding for K–12 education. The second local source is Specific Ownership Taxes that are paid through your car registration. As car sales decline and more older cars are on the road, the amount of tax is reduced.
The Colorado general fund provides most state-level funding for K–12 education. Referendum C, which was passed in 2005, has allowed the state’s general fund to have a "time out" from TABOR’s revenue limits. But, the current downturn in the economy has resulted in no additional revenue. Referendum C will sunset in 2010, creating a new funding base. All of these ratcheting impacts, limits, and the sunset of Referendum C are concerns to K–12 and will limit our ability to recover when economic times are better.
How does Colorado's per-pupil spending compare to that in other states?