WOODLAND PARK - Tourists and other shoppers could be the ticket to helping Woodland Park School District RE-2 offset shortfalls in state funding.
The Woodland Park City Council will decide Thursday whether to keep working to get a sales tax increase measure on the April 5 municipal ballot or scrap the idea for now.
After consulting with the city attorney in a closed executive session, the seven-member board will vote "whether to move forward," during Thursday's city council meeting, City Clerk Suzanne Leclercq said Monday.
If members agree to continue the process of placing a question on the ballot, the council will hold a public hearing on the issue on Feb. 18 and vote to grant or deny the school district's request for a ballot initiative.
Public school districts cannot levy sales taxes but can petition city council or present a citizen's initiative to place a tax increase measure on the ballot.
RE-2 officials want voters to approve a 1.09 percent city sales tax boost to the existing 3 percent tax, with the estimated $2 million in annual revenue earmarked for the school district.
The city of 8,000 residents had 4,720 active registered voters as of Monday, according to the Teller County Clerk and Recorder's Office.
With state and county sales tax added to the city tax, purchases in the city of Woodland Park currently carry a 6.9 percent sales tax. An approved increase would bump the city tax rate to 7.99 percent. The city of Colorado Springs' sales and use tax rate is 8.25 percent.
While in the fledgling stages, the potential proposal would include reducing property taxes by using some of the new revenue to pay off existing bond debt, said Brian Gustafson, director of business services for RE-2.
"That would be the key - a sales tax increase would carry an accompanying reduction in property taxes," he said.
Using half of the $2 million in additional yearly revenue would enable RE-2 to eliminate a 6.75 mill levy, reducing taxes by about $160 a year on a $300,000 home, Gustafson estimates.
RE-2 officials nixed the traditional method of increasing revenue for schools, through a voter-approved mill levy override, because property taxes in Woodland Park and surrounding areas are higher than other parts of the Pikes Peak region, Gustafson said. Multiple taxing authorities - ambulance, fire, water, library and school districts, along with municipalities - mean "our property owners are already taxed highly."
Only about 35 mills go to the school district, but some residents in Woodland Park are taxed at 88 mills. One mill equals $1 of property tax for every $1,000 of assessed value. A few other school districts in the Pikes Peak region receive less property tax revenue, yet residents in those districts with higher collections pay less in property taxes.
The recession led to severe state cuts for public education. At last month's annual meeting of the Colorado Association of School Boards Gov. John Hickenlooper said funding for public education will not improve anytime soon, and he urged district leaders to find local funding sources.
RE-2 estimates it has been shortchanged nearly $15 million in per-pupil state funding since fiscal year 2008, Gustafson said. In response, the district reduced its budget, cut staff and programs, started charging parents for transportation and other services, and got "very lean."
"We've reduced expenses and have been working on ways to increase revenues with new programs to attract and retain students," Gustafson said, "but we're still battling reduced funding."
Sales tax revenue would support school district programs, employee recruitment and retention, maintenance, building upgrades and other operational expenses, he said.
A longtime trend of declining enrollment in RE-2 seems to be flattening and stabilizing, he added. The district has about the same number of students this school year as last year, just under 2,500.
While it's unusual for city sales tax to help support public schools, it's not unheard of. The Montrose and Olathe School District on the Western Slope used city sales tax to fund a building initiative in the early 2000s.
Black Hawk residents approved a 1.5 percent sales tax increase on food, lodging and beverages in 2008 to pay for classroom expenses in Gilpin County. The school district has collected more than $4.7 million under the "Educational Enhancement Tax."
The last attempted ballot initiative for the Woodland Park school district was in November 2011, when voters rejected a $950,000 annual mill levy override. The district's last successful ballot initiative was in November 2003, when voters approved a $1.1 million annual mill levy override and a $14.6 million bond issue.