Referendum on taxes

Districts roll the dice on $1.5 billion in tax increase measures

This story was updated on Oct. 15 to reflect final totals after the last deadline for putting measures on the ballot had passed. 

Will 2014 be the year that voters in Colorado school districts loosen up their wallets and approve well more than $1 billion in local tax increases for school construction and operations?

A year ago, voters were almost as skeptical of local proposals as they were of Amendment 66, the $1 billion K-12 statewide income tax hike that was defeated overwhelmingly. Hoping that voters are in a different mood this year, some two dozen Colorado school districts are seeking some $1.5 billion in property tax increases for construction projects and operating funds.

“On the bond side, it’s going to be the largest group of bonds that anybody’s ever seen,” said Tracie Rainey, executive director of the Colorado School Finance Project, which compiled the detailed list displayed at the bottom of this article.

This year’s ballot measures are interesting for several important reasons, including:

A big year – The total $1.4 billion request exceeds the nearly $1.2 billion districts proposed in 2012, although there were 38 measures on the ballot that year, compared to about 30 this year.

Boulder has biggest ask – The Boulder Valley School District is asking for a $576.4 million bond issue this year, exceeding the high set previously by the $515 million combined bond and override requested – and won – by Denver Public Schools in 2012.

Bond & Mill
  • Bond measures are voter-approved increases in property taxes for facilities needs. Districts sell bonds to raise the cash to pay for construction, then use the additional tax revenues to pay the bonds off.
  • Overrides are voter-approved hikes in a district’s general property tax rate that a district generally uses for operating expenses or special needs like technology purchases.

Five Adams districts asking – Most of the money – about $1.1 billion – is being requested from voters in just two counties, Adams and Boulder. Five districts in western Adams all are on the Nov. 4 ballot, an apparently unprecedented event.

Financial pressures – Despite a modest bump in school funding provided by the 2014 legislature, district leaders say that additional money is far from enough, and they have to ask voters for additional local revenues to cover building and program needs that can’t be put off.

A possible distraction – A statewide casino-expansion proposal, Amendment 68, is also on the ballot, and it promises more than $100 million in additional revenues for schools. District leaders are skeptical of A68’s promises and hope it doesn’t confuse voters about the need for local revenue. (Get details on A68 here.)

BEST off the ballot – For the first time in several years, 2014 ballots don’t include a long list of small districts seeking bond issues to raise local matching funds for Building Excellent Schools Today construction program grants. (There’s only one such local measure this year.) The state portion of that program has reached its ceiling for larger projects such as new schools and major renovations, so there’s no money for locals to match.

Chart

Voter mood – Finally, the 2014 election may provide an update on where some voters stand on school taxes. Voter attitudes have been on a roller coaster in this decade. District tax proposals received reasonable support in 2010, but 2011 was the worst year in memory for bonds and overrides. Voters were very supportive in 2012 but returned to their skeptical ways last year. Of course, voters rejected statewide proposals to increases taxes for schools in 2011 and 2013.

Boulder – the big ask

“This is a big ask, we understand that,” says Boulder Valley Superintendent Bruce Messinger when questioned about his district’s proposal for a $576.4 million bond issue. “It’s a hard choice.”

But, he added, “The facilities needs are not going to go away,” and if building systems begin to fail the 30,500-student district isn’t in a position to cover significant building costs from its general fund.

About half the money would be used to bring all district buildings “to acceptable standards,” he said, with the rest devoted to a variety of other needs. (See the district’s detailed facilities plan here.)

Boulder Valley Supt. Bruce Messinger / File photo
Boulder Valley Supt. Bruce Messinger / File photo

As is common with larger districts, Boulder went through a long planning and public consultation process before the board approved the ballot proposal in August.

Messinger said polling put the district’s overall approval rating is at “an all-time high” and that polling and focus groups indicate, “Taxpayers understand … schools are assets.”

While Messinger is feeling reasonably good about the proposal’s chances, he does note the possible of confusion with Amendment 68. “It’s a concern,” he said. “It’s on people’s minds.”

Boulder has had a history of success with its voters. It last lost an election in 2002, when voters rejected a $7.5 million override that would have funded technology improvements.

Adco’s “referendum” on school spending

Election history
  • Adams 12 – $9.9M override passed, $80M bond failed 2008
  • Adams 14 – $44M bond failed 2013
  • Adams 50 – $5.2M override failed 2013
  • Aurora – $15M override passed 2012
  • Boulder – $22.5M override passed 2010
  • Brighton – $4.8M override fail 2011
  • Cherry Creek – $125M bond, $25M override passed 2012
  • Colo. Springs 11 – $21.5M override failed 2008, $131.7M bond passed 2004
  • Dougco – $200M bond, $20M override failed 2011
  • Denver – $466M bond, $49M override passed 2012
  • Jeffco – $99M bond, $39M override passed 2012
  • Littleton – $80M bond passed 2013
  • Mapleton – $32M bond passed 2010
  • Poudre – $120M bond, $16M override passed 2010
  • St. Vrain – $14.8M override passed 2012

More information

While Denver, Douglas and Jefferson counties have but one school district each, Adams County is served by seven. Each district is considerably smaller than DPS or Jeffco, but combined the five largest districts in Adams had about the same enrollment as their neighboring counties did in 2013-14, about 85,000 students.

This year most Adams County voters have the rare opportunity to vote on school taxes at the same time. Those five districts – Adams 12-Five Star, Brighton, Commerce City (Adams 14), Mapleton and Westminster (Adams 50) – all have proposals on the ballot.

All but Brighton are seeking both bond issues and overrides for varying reasons. Each district is seeking bond money to upgrade existing buildings, while new schools would be built in growing parts of Adams 12, Brighton and Commerce City. Tax override revenues would be used to recruit and retain teachers, offset state budget cuts and cover a variety of needs. (See the spreadsheet at the bottom of this story for details on those district proposals and all tax measures statewide.)

Adams 12 Superintendent Chris Gdowski said the five sets of ballot measures weren’t coordinated but, “What’s driving it are common factors. We all have needs that haven’t been met.”

For Adams 12, he said, “The need is pressing, and we can’t wait any longer.”

Other county superintendent sounded the same note. “We decided to go this year because our needs just continue to mount,” said Mapleton Superintendent Charlotte Ciancio. “We have just been so far behind for so long … we just had to go.”

Westminster Superintendent Pamela Swanson said, “We’re trying to avoid any more cuts. We have some wonderful things happening, and we don’t want to take any steps backwards. We felt a moral obligation to go back out” to the voters, even though the district saw a $5.2 million override defeated last year.

Commerce City Superintendent Pat Sanchez had a bond issue defeated last year by about 300 votes. He called that a “hidden blessing” that forced the district “to be really crystal clear about what the voters are getting” this year. He and other Adams superintendents are hopeful that academic improvements in recent years will make voters more amendable to tax hikes.

Adams 12, Brighton and Mapleton are rated as “improvement” districts by the state accreditation system. Commerce City and Westminster are “priority improvement” districts but have moved up in recent years from “turnaround,” the lowest accreditation category.

Superintendents have varying answers about what happens if proposals are defeated. Gdowski said a loss could mean schedule changes in Adams 12. Sanchez said defeat “would change a five-year plan to a 10-year plan,” and Ciancio said, “If it doesn’t pass we’ll just have to keep going back to the ballot.”

Around the state

Two districts in El Paso County also have large measures on the ballot. Cheyenne Mountain is proposing a $45 million bond, and Falcon’s bond proposal totals $107.4 million.

Denver voters face a proposed sales tax increase and an extension for the Denver Preschool Program, which is separate from DPS. (Get more details here.)

There are no district proposals on the ballot this year in Denver, Douglas County, Jefferson County or in any of Arapahoe County’s seven districts.

State law bars school boards and districts from spending public funds on ballot measure campaigns.

The campaign load typically is carried by outside citizen campaign committees that raise money for brochures, yard signs and other materials. Such committees already have been formed in Boulder, in most of the Adams County districts and in Cheyenne Mountain and Falcon.

The bigger issue

Passage of bond issues and overrides in individual districts has the unwelcome side effect of increasing gaps between districts that have the political and financial capacity to pass them and those that don’t. (There’s a limit on district bond debt based on the value of property within a district, and there also are state ceilings on overrides.)

“The long range solution to this [school funding] is not doing this district by district,” Messinger said. “I worry that the gap [between districts] could widen over time,” said Gdowski.

But Sanchez, noting that there’s still a $900 million shortfall in state school funding, said it’s hard to districts to resist the pressure to raise their own money. “I think you’re going to see a trend of more bonds and mill levy overrides.”

This spreadsheet includes information gathered by the Colorado School Finance Project as of Oct. 6.

money matters

Why Gov. Hickenlooper wants to give some Colorado charter schools $5.5 million

Students at The New America School in Thornton during an English class. (Photo by Nic Garcia)

If Mike Epke, principal of the New America School in Thornton, had a larger budget, he would like to spend it on technical training and intervention programs for his students.

He would buy more grade-level and age appropriate books for the empty shelves in his school’s library, and provide his teachers with a modest raise. If he could really make the dollars stretch, he’d hire additional teacher aides to help students learning with disabilities.

“These are students who have not had all the opportunities other students have had,” the charter school principal said, describing his 400 high school students who are mostly Hispanic and come from low-income homes.

A $5.5 million budget request from Gov. John Hickenlooper, a Democrat, could help Epke make some of those dreams a reality.

The seven-figure ask is part of Hickenlooper’s proposed budget that he sent to lawmakers earlier this month. The money would go to state-approved charter schools in an effort to close a funding gap lawmakers tried to eliminate in a landmark funding bill passed in the waning days of the 2017 state legislative session.

Funding charter schools, which receive tax dollars but operate independently of the traditional school district system, is a contentious issue in many states. Charter schools in Colorado have enjoyed bipartisan support, but the 2017 debate over how to fund them hit on thorny issues, especially the state’s constitutional guarantee of local control of schools.

The legislation that ultimately passed, which had broad bipartisan support but faced fierce opposition from some Democrats, requires school districts by 2020 to equitably share voter-approved local tax increases — known as mill levy overrides — with the charter schools they approved.

The bill also created a system for lawmakers to send more money to charter schools, like New America in Thornton, that are governed by the state, rather than a local school district.

Unlike district-approved charter schools, which were always eligible to receive a portion of local tax increases, state-approved charter schools haven’t had access to that revenue.

Terry Croy Lewis, executive director of the Charter School Institute, or CSI, the state organization that approves charter schools, said it is critical lawmakers complete the work they started in 2017 by boosting funding to her schools.

“It’s a significant amount of money,” she said. “To not have that equity for our schools, it’s extremely concerning.”

CSI authorizes 41 different charters schools that enrolled nearly 17,000 students last school year. That’s comparable to both the Brighton and Thompson school districts, according to state data.

Hickenlooper’s request would be a small step toward closing the $18 million gap between state-approved charter schools and what district-run charter schools are projected to receive starting in 2020, CSI officials said.

“Gov. Hickenlooper believes that working to make school funding as fair as possible is important,” Jacque Montgomery, Hickenlooper’s spokeswoman, said in a statement. “This is the next step in making sure that is true for more children.”

If lawmakers approve Hickenlooper’s request, the New Legacy charter school in Aurora would receive about $580 more per student in the 2018-19 school year.

Jennifer Douglas, the school’s principal, said she would put that money toward teacher salaries and training — especially in the school’s early education center.

“As a small school, serving students with complex needs, it is challenging and we need to tap into every dollar we can,” she said.

The three-year old school in Aurora serves both teen mothers and their toddlers. Before the school opened, Douglas sent in her charter application to both the Aurora school board and CSI. Both approved her charter application, but because at the time her school would receive greater access to federal dollars through CSI, Douglas asked to be governed by the state.

Douglas said that her preferred solution to close the funding gap would be to see local tax increases follow students, regardless of school type or governance model. Until that day, she said, lawmakers must “ensure that schools have the resources they need to take care of the students in our state and give them the education they deserve.”

For Hickenlooper’s request to become a reality, it must first be approved by the legislature’s budget committee and then by both chambers. In a hyper-partisan election year, nothing is a guarantee, but it appears Hickenlooper’s proposal won’t face the same fight that the 2017 charter school funding bill encountered.

State Rep. Jovan Melton, an Aurora Democrat who helped lead the charge against the charter school funding bill, said he was likely going to support Hickenlooper’s proposal.

“You almost have to do it to be in alignment with the law,” Melton said. “I don’t think with a good conscious I could vote against it. I’m probably going to hold my nose and vote yes.”

Payment dispute

Fired testing company seeks $25.3 million for work on TNReady’s bumpy rollout

PHOTO: TN.gov

Tennessee officials won’t talk about the state’s ongoing dispute with the testing company it fired last year, but the company’s president is.

Henry Scherich

Henry Scherich says Tennessee owes Measurement Inc. $25.3 million for services associated with TNReady, the state’s new standardized test for its public schools. That’s nearly a quarter of the company’s five-year, $108 million contract with the state, which Tennessee officials canceled after technical problems roiled the test’s 2016 rollout.

So far, the state has paid the Durham, North Carolina-based company about $545,000 for its services, representing about 2 percent of the total bill, according to a claim recently obtained by Chalkbeat.

Measurement Inc. filed the claim with the state in February in an effort to get the rest of the money that it says it’s owed. Since then, lawyers for both sides have been in discussions, and the company filed a lawsuit in June with the Tennessee Claims Commission. The commission has directed the State Department of Education to respond to the complaint by Nov. 30.

“We’re moving forward,” Scherich told Chalkbeat when asked about the status of the talks. “… We’re simply asking to be paid for the services we provided.”

Education Commissioner Candice McQueen declined last week to discuss the dispute, which she called “an ongoing pending lawsuit.” A spokesman for the attorney general’s office also declined to comment on Monday.

Scherich said he and other company officials have not been called to Nashville for hearings or depositions.

“Our lawyers and the state’s lawyers are still skirmishing each other,” he said. “…They argue about lots of things. It’s kind of like we’re establishing the ground rules for how this process is going to proceed.”

PHOTO: Grace Tatter
Education Commissioner Candice McQueen announced the firing of Measurement Inc. and the suspensions of most testing in April 2016.

Tennessee’s dramatic testing failure started on Feb. 8, 2016, when students logged on during the first morning of testing and were unable to load TNReady off the new online platform developed by Measurement Inc. The fallout culminated several months later when McQueen fired the company and canceled testing altogether for grades 3-8. In between were months of delays after McQueen instructed districts to revert to paper-and-pencil materials that would be provided by Measurement Inc. under the terms of their contract. Many of those materials never arrived.

The company’s claim suggests that the state was hasty in its decision to cancel online testing and therefore shares blame for a year of incomplete testing.

The Tennessee Department of Education “unilaterally and unjustifiably ordered the cancellation of all statewide electronic testing that occurred on February 8, 2016, following a transitory slowdown of network services that morning,” the claim says.

(In an exclusive interview with Chalkbeat the day before his company was fired, Scherich said Measurement Inc.’s online platform did not have enough servers for the 48,000 students who logged on that first day — a problem that he said could have been fixed eventually.)

The claim also charges that McQueen’s subsequent order to substitute paper test materials was “unnecessary and irresponsible” and impossible to meet because of the logistical challenge of printing and distributing them statewide in a matter of weeks.

In her letter terminating the state’s contracts with Measurement Inc., McQueen describes daily problems with the company’s online platform in the months leading up to the botched launch. “This was not just a testing day hiccup; the online platform failed to function on day one of testing,” she wrote.

McQueen said those experiences contributed to her department’s conclusion that Measurement Inc. was unable to provide a reliable, consistent online platform and left her with no option but to order paper and pencil tests. She also cited the company’s failure to meet its own paper test delivery deadlines for her ultimate decision to terminate the contracts and suspend testing.

The last sentence of the four-page termination letter says the state would “work with (Measurement Inc.) to determine reconciliation for appropriate compensation due, if any, for services and deliverables that have been completed as of the termination date after liquidated damages have been assessed.”

In addition to its invoices for work under the contract, Scherich said his company is owed another $400,000 for delivering test-related materials to the state after its contract was ended.

“We didn’t want to be a company that stood in the way of the programs of the state of Tennessee, so we provided all the information they requested,” Scherich said. “We were told we would be paid, we provided the information, and then we’ve not been paid.”

Founded in 1980, Measurement Inc. had been doing testing-related work for Tennessee for more than a decade before being awarded the 2014 TNReady contract, its biggest job ever. The company had a fast deadline — only a year — to create the state’s test for grades 3-11 math and English language arts after a vote months earlier by the legislature prompted Tennessee to pull out of PARCC, a consortium of other states with a shared Common Core-aligned assessment.

Scherich said the loss of the TNReady contract was “a major hit” for his company, but that Measurement Inc. has paid every employee and subcontractor who worked on the project. “We have had to go into debt to keep ourselves viable while we wait for this situation with Tennessee to be resolved,” he said, adding that the company continues to do work in about 20 other states.

To pursue its claim, Measurement Inc. has hired the Tennessee law firm of Lewis, Thomason, King, Krieg & Waldrop, which has offices in Nashville and Knoxville.

“I’m sure we’ll work out something amicable with the state over time,” he said. “I’m an optimistic person. But I think our lawyers and their lawyers will have to have a lot of negotiations.”

Below are Measurement Inc.’s claim against the state, and the state’s letter terminating its contracts with the company.

Editor’s note: This story has been updated with details about the claim’s status.