Funding public schools with local sales taxes is highly unusual in Colorado, but after a year and a half, it’s working very well for the Aspen School District.
In 2013-14, the district received $1.42 million — roughly 7 percent of its annual net revenue — from a 0.3 percent sales tax levied in the city of Aspen. The cash infusion was necessary for the district to avoid cutting staff or programs amid a gradual loss of state funding that began in 2008.
“That money goes across and touches lots of different areas,” said Kate Fuentes, chief financial officer for the school district. “The dollars allow us to maintain the programming and high-quality instruction that people in the district expect.”
City of Aspen voters approved the sales tax for schools in November 2012, and collections began in January 2013. Every month, the city’s Finance Department transfers the schools’ portion of local sales tax collections into an account held by the nonprofit Aspen Public Education Fund, which then disburses money to the school district through a grant-application process.
In the just-finished 2013-14 school year, the fund granted $1.42 million, which was distributed across five general functions:
• Recruit, train and retain (employees).
• Special education.
• Professional development.
Next year, the district has requested $1.6 million for the same five areas in roughly similar proportions. The Aspen Public Education Fund approved the full request on May 30, and the money will flow to the district in two installments, in September and February.
The grant-funding procedure is somewhat cumbersome because the tax money doesn’t flow automatically to the schools. Supporters of the 2012 ballot measure felt strongly that a nonprofit board to administer the tax money would bring transparency and accountability to the process.
Laura Kornasiewicz, chairwoman of the Aspen Public Education Fund’s board of directors, describes the dialogue between the board and the district as “thoughtful — certainly not a rubber stamp.” The board members, several of whom have served on the school district’s governing board and financial advisory board, are well-versed in school policies and operations.
“We’re not in a position to say, ‘We don’t think you need money for that,’ but it is within our job to say, ‘What do you plan to do with the money, and what results do you expect to see?’” Kornasiewicz said.
Alice Hackney, controller for the city of Aspen’s Finance Department, said revenues to the fund through April have totaled $687,683. That’s roughly 9.5 percent above the same point in 2013, which bodes well for the schools.
“It has really been one heck of a Band-Aid,” Kornasiewicz said.
The Aspen Public Education Fund (not to be confused with the Aspen Education Fund, which raises money for the schools through charitable donations) was modeled after a similar sales tax system in Steamboat Springs that was created in 1993 and has been extended three subsequent times.
Currently, Steamboat and Aspen are the only places in Colorado to support their schools using a dedicated, local sales tax.
“There were very few options (for the schools), and this was an elegant one,” said Robin Hamill, one of the Aspen measure’s main architects. “The money would stay in town and would be governed by people with a strong history of handling other people’s money.”
The current Aspen Public Education Fund board includes Kornasiewicz, Hamill, attorney Jeanne Doremus, real estate executive Ernie Fyrwald, landscape architect Sarah Chase Shaw, financial consultant Peter Van Domelen and former school board member Elizabeth Parker.
School districts across the state are struggling with the multi-year decline in state funding. This year, thanks to a recovering economy, state legislators were able to craft their first significant financial infusion for K-12 schools in years, but school officials are still playing catch-up.
Since 2009, 40 of Colorado’s 178 districts, including Aspen and Roaring Fork, have passed mill-levy overrides to offset the loss of revenue from the state. So why haven’t more districts attempted to use local sales taxes, as Steamboat and Aspen have?
The answer, according to Traci Rainey, of the Colorado School Finance Project, is that few districts want to further burden their own taxpayers. In resort towns like Steamboat and Aspen, however, tourists help carry the burden.
“The local portion of sales tax doesn’t go to (schools) unless they have a levy that specifically indicates it,” Rainey said. “It’s suited to districts that have a high volume of tourists.”
Aspen’s sales tax for schools is set to expire at the end of 2016. Between now and then, officials with the school district and the Aspen Public Education Fund will have to decide whether the tax is still needed. To a large degree, that depends on the Colorado General Assembly and whether and how it decides to invest in public schools.
“If state funding stays where it is, then that will lead us in one direction,” Fuentes said. “If state funding increases or decreases, then that will lead us in another direction.”