The Optimist: Easy fixes to school funding

This is the second column in a series that looks at the financial plight of our school district, a challenge created by the State of Colorado. The first column provided background on the issue and can be found here.

When Colorado changed its funding formula to pull funds from districts with high property values and to reallocate those funds to struggling districts, the state set us up to lose $11 million in annual funding over several years. Aspen School District has lost $6 million in annual state funding through this school year. We expect to lose another $5 million annually as the formula kicks in fully. Out of 178 districts in the state, our community is one of the few that must fully fund its own schools — Colorado’s version of Taxation without Education.

The district’s $41 million operating budget pays the annual costs of running all schools – salaries and benefits for school employees, transportation, food service, and other recurring expenses. For context, if we add this amount to the total operating budgets of Aspen, Pitkin County, and Snowmass Village, the school district comprises only 6% of total annual public operating spend in our community. School funding has always drawn from a multitude of sources, not just the state. Sources include local property taxes via a mill levy, Aspen Public Education Fund (funded by a small sales tax in Aspen), Snowmass Village Public Education Fund (funded by a small property tax in Snowmass Village), Aspen Education Foundation, and variable federal grants that comprise about 4% of total funding.

Property taxes account for a majority of the district’s funding — and now generate the vast majority with the state stepping back. Property taxes provided $35.5 million in 2023/24, up just enough to cover a $4 million loss in state funding that hit that year. 2023/24 was the year we all experienced significant increases in property values, with Pitkin County’s total assessed value increasing by 54%. However, the property tax dollars generated for our schools increased only 17%. Why? The state caps the per pupil amount we can generate in property taxes for education.

Did you catch that? The state left us on our own, but then capped what we could raise in property taxes. And what the state allows in property taxes per pupil barely covers the instructional costs for education. To have buses, food service, utilities, after-school activities like sports and theater, college and mental health counselors, and other valuable programs, our district depends on incremental funding from other sources. Fortunately, the state has shown some awareness of this dynamic. We currently have a window to pass a mill levy override to cover the lost state funding.

The incremental dollars from APEF, AEF, and SVPEF fill the gaps so we can have great schools for our kids. In recent years, annual funding from APEF, AEF, and SVPEF has averaged $4 million, $1.5 million, and $500,000 respectively. To have schools that meet our community’s goals, these funding sources play key roles. There is talk that the state will, for incomprehensible reasons, block mill levy overrides that would fill the hole it has left us. This risk amplifies the importance of strengthening all funding sources for the schools. With cuts to the U.S. Department of Education, we should also prepare for the potential loss of federal funding too.

How do we prepare our district for the loss of state and federal funds, while repairing our reserves and handling normal annual inflation in salaries and operating expenses, such as skyrocketing health care costs?

No-brainers

1. Aspen voters can extend the small Aspen sales tax (0.3%) for APEF this November. This sales tax sunsets in 2026. Extending this tax only funds the schools at the current level.
2. Snowmass voters can extend the small property tax in Snowmass Village ($500K) this November. This small property tax sunsets in 2026. Extending this tax only funds the schools at the current level.
3. The School Board should ask school district voters to support a mill levy override to cover the upcoming loss of state funds. Though it might feel like property taxes went up significantly, the school district did not benefit proportionately from the increase in assessed value. The last time we authorized a mill levy override was 2015. The state might take this power away in the future, so our community should use it now.

Easy wins

1. Increase the small Aspen sales tax. Currently, the city of Aspen’s sales tax for APEF is 0.3%. For comparison, the Aspen sales tax for open space is 1.5% — five times the amount for our schools. Visitors pay much of the sales tax. When renewing this tax in November, the city could ask voters to approve an increase to 0.6%. We would double the annual funding for APEF, while the total Aspen sales tax would go from 2.4% to 2.7%. In two to three years, this additional annual funding of ~$4 million would allow the school district to fully repair its capital reserves and return to strong health.
2. Snowmass could follow suit in considering a small increase when it asks voters to renew the tax that funds SVPEF.
3. Everyone can support AEF with as much generosity as possible. While high-profile fundraising is wonderful, every donation of any size matters.

Creative additions without cost

1. The best use of Aspen’s Arts & Culture Fund. In 2021, Aspen voters expanded the allowable grants for local arts and culture from the 0.5% real estate transfer tax (RETT). As a result, the Arts fund balance that exceeds the Wheeler’s needs has grown rapidly, from $13.9 million at the end of 2023 to $22.8 million expected at the end of 2025. The premier arts organization that benefits our residents entirely is the programming at our schools. Annually, approximately $1 million of the district’s operating budget goes to arts programs. The Arts & Culture fund could painlessly support the district’s arts budget out of its ever-growing balance.
2. Opportunities to engage Open Space funds. Each of our three local governments has open space funds. Often, these funds go to purchase beautiful properties, like the Snowmass Falls Ranch for $34 million and a property in Missouri Heights, where Pitkin County will contribute $7.7 million. While open space is a prized community asset, to make it more than empty land we need future adults who appreciate our Valley’s nature. Across the three governments, could we find $1 million annually from existing Open Space funds to support Ex Ed programs?

As you likely noticed, there are two wonderful aspects of these solutions. First, the dollars are small in a community whose public operating spend will reach nearly $700 million in 2025. We are not talking about a $200 million bridge or $700 million Lumberyard. Single digit millions that grow with inflation will put our schools in a terrific place. Second, we can source the incremental dollars from many places, so no one feels noticeable pain in standing up for our schools. 

Hopefully, new and existing leaders at the School Board and all three governments can put energy into these solutions now. These solutions are each small, but together, they would buffer our community for the coming fiscal storm. They would protect education as the heart of our community.

Greg Goldfarb lives in Aspen.