Cherry Creek schools says local tax-hike cap will limit teacher pay, new programs

A tiny house is lifted onto the back of a flatbed tractor trailer truck, Aug. 31, 2020, at the Cherry Creek Innovation Campus. In partnership with Colorado Village Collaborative, Cherry Creek students assisted in building these homes, which will be delivered to the Women’s Village at Clara Brown Commons. School officials say new programs like this in the district could be limited by a local tax-cap imposed on school districts by the state.
File photo by PHILIP B. POSTON/Sentinel Colorado

AURORA | Cherry Creek schools officials warn that as the district reaches a limit on local property tax hikes to boost operating costs, it will be reliant on per-pupil funding limits set by the state.

That was the takeaway from a presentation Cherry Creek School District Chief Financial Officer Scott Smith gave to the school board at its June 13 meeting, where the board voted unanimously to approve the 2022-2023 budget.

“At the end of the day, the revenue from the state is what we get,” Smith said. “We have to have a balanced budget.”

Historically, Smith said Cherry Creek had a philosophy of living outside its state-contributed means financially, and made up deficits by periodically going to voters for mill-levy overrides, essentially property tax increases. The 52,000-student district has now hit the state-mandated cap for the amount of money it is allowed to collect through mill levies — which means for all intents and purposes the district is dependent on increases to per pupil revenue from the state, he said.

State lawmakers cap revenue from mill levy overrides at 25% of total district funding, which Cherry Creek has now reached, along with Aurora Public Schools, Denver Public Schools and the Boulder Valley School District.

The district will still be able to ask for bond issues, Smith said. Those are property tax increases dedicated to building and capital improvements, not operating expenses. The district plans to stick with its schedule of asking voters for bond increases every four years for those purchases. The most recent bond-issue increase was approved in 2020 and will be used for projects including security upgrades, the construction of a new elementary school and the creation of a mental health day treatment facility.

Smith told The Sentinel that while having reached the cap is frustrating, the real problem is that the state funds public education so poorly. The mill levy has been essentially used by districts to backfill millions of dollars in education needs that the state couldn’t provide, he said. Now that the cap has been reached, that’s no longer an option.

Going forward, Smith said Cherry Creek “can’t give the kind of raises we’ve done in the past or open the new types of programs we’ve done in the past unless the state really starts to step up and finally fund K-12 in an adequate fashion.”

This fiscal year the district’s per-pupil funding will increase by $546, or 6.1%, to a total of $9,548. The increase is usually about 3% or 4% Smith said and will likely revert to that in the future. This year was higher due to an influx of federal money into the state budget.

Per-pupil spending set by the state is based on a complex formula linked to state revenues, student demographics, the district’s size and even urban or rural nature.

Along with the mill levy cap, declining enrollment is another factor that will limit the district’s budget going forward. Like many other districts in the metro area, Smith said Cherry Creek is now considered to be a district with declining enrollment. Since the 2019-2020 school year the district has lost more than 2,000 students and is projected to lose 4,332 students between that school year and 2024-25.

That’s driven largely by demographic trends, Smith said, but affordability issues in the region are also a factor. Despite a political narrative about families fleeing the public school system for private education, Smith said that isn’t a driving factor for the district.

“We have 52,000 kids in our district, from the start of the pandemic to now only 50 kids more are opting for private school so that’s not moving the needle for us at all,” he said.

The number of students zoned for Cherry Creek who attend non-district schools was not immediately available.

The Cherry Creek School District will allocate $29 million to teacher and staff raises in its 2022-2023 budget, its biggest single expenditure in the upcoming year’s budget. That will amount to about a 5.25% raise to all employee groups beginning July 1.

Kasey Ellis, president of the Cherry Creek Education Association, said that the increase is about what was expected.

“It’s been made really clear to us at the bargaining table that the district has to live within its means,” she said.

Rising inflation is a challenge for the district’s employees, along with a 0.5% increase in PERA contributions that kicks in this year for all members and employers who pay into the retirement association.

“The increase that we saw, we are paying 0.5% of that to PERA,” Ellis said.

As part of its capital reserves, new expenditures for the coming year will include the creation of a health clinic at Smoky Hill High School after the success of two school-based health clinics that the district opened this spring in partnership with STRIDE.

The district plans to use money from the third round of the federal Elementary and Secondary School Emergency Relief Fund (ESSER III) to preserve teaching jobs that would otherwise have to be cut. ESSER III funds were allocated in 2021 (Cherry Creek received $33.4 million in total) and must be used by September of 2023, so it is not a permanent solution to preserving staffing positions. Smith acknowledged that this will create a “fiscal cliff” for the district.

The 20% of ESSER III funds required to go directly toward addressing student learning loss will go toward programs including before-and-after school tutoring, in-person and online summer programs and the purchase of a curriculum to support K-5 reading education.

Ultimately, Smith said the district is attempting to make the best use of its resources under a state funding model that makes it very difficult for schools to meet all their needs.

“When you’re routinely in the top 20% of economic activity in the U.S. and routinely in the bottom percent in how you fund public education, those two things are incongruent in my head,” he said.

0 0 votes
Article Rating
Notify of
Newest Most Voted
Inline Feedbacks
View all comments
Angela Drucker
Angela Drucker
1 month ago

Good luck passing a bond levy. Schools are being dumbed down (i.e., no more homework, no more valedictorian, etc) & voters know it. We are not willing to pay for subpar performance. It’s a shame. Cherry Creek used to be a great district.

Joe Felice
Joe Felice
1 month ago

Legislative bodies should always be wary of limiting funding and taxes because what works and sounds good today may come back to bite us. Look at how strapped our state government is by the TABOR amendment, and how mill levies for schools are limited by the Gallagher amendment. All schools are feeling the financial pinch at a time when we should be spending more money on this important component in our society. And then we complain as we watch our educational system fail.

1 month ago

Schools are run by unions which should be supporting better pay for teachers BUT it seems like more and more the money available goes to Administrators, Clerical and totally unnecessary remodeling and new construction. Spend the money on instruction not construction!!!