Colorado Governor John Hickenlooper (D) announced his budget Tuesday that includes somewhere around $325 million to $375 million in budget cuts for school districts.  He says that K-12 education is the state’s most important priority, but…

Colorado’s public education budget has gradually become the state’s problem since the Taxpayer Bill of Rights (TABOR) passed in the early 1990s.   What used to be a 40-60 split between state and districts is now a 65-35 split.

The recession has amplified the problem.  Property tax revenues have dramatically declined and will continue to flatline, as it may take a decade before the foreclosure wrench is over.  Since properties are reassessed only every two years, recovery will not come soon.

The state budget is short $1.2 billion for 2011-12.  With school finance representing about 40% of the state’s General Fund, cuts will hit schools disproportionately to other programs funded outside the General Fund.  Which brings us to the state’s severance tax.

Colorado, like other western states, has lots of minerals, oil, and gas resources, but especially gas.  With the price of oil rising over the last few years, the state’s natural gas has become more valuable and has attracted drillers back to our more rural counties.  Northwestern Colorado, the home of Dinosaur National Monument, is experiencing another boom, as drillers are putting down wells and filling our small rural towns with lots of workers and their needs for good roads, clean water, clean air, and education for their kids.  Ah, the rub.

The state collects two taxes to help with the impact of extraction: the ad valorem property tax and the severance tax.  The property tax is assessed against the value of the gas extraction as property.  The severance tax is assessed to compensate for the lost resources, never to be returned to the earth.  Cities, counties, and school districts use the property tax.  Royalty owners can deduct 87.5% of the property tax off their severance tax.  The state is supposed to keep the remaining 12.5%.

Traditionally, the state has recycled much of the severance tax back to the rural counties for roads, clean water, sewage treatment, and other infrastructure needs.  The cities and counties have counted on this money as their towns boom and bust with the energy industry.

But now the whole state is bust, and the legislature wants to retain severance tax money to bridge the state’s budget gap.  Rural cities and counties are crying the blues, as well as other traditional severance tax collectors such as the Colorado Water Conservation Board.  This Board uses severance tax money to give out loans to water districts for water projects.

So traditionally, the severance tax money has been kept pretty far away from public education.  With the budget gap, the state needs to pull back some of this money from water, agriculture, cities and counties to prevent complete public school funding catastrophe.  As Hickenlooper says, “Public education is our most important priority.  What can be more important than educating our children to prepare them to be quality workers for our future?”

What can be more important?  Water projects for dam repair and storage?  Roads?  Tourism?  The Governor has chosen to put $17 million into tourism, money that might otherwise go to public education.  He has also chosen to put dollars into economic development and job expansion.  He has chosen to pull out only $31 million from the Colorado Water Conservation Board, out of $116 million.

What he has not done is set a water conservation policy that will reduce the need for agriculture and municipal water storage.  He has not set an extraction policy that will ensure the state receives the best value for its minerals, oil, and gas property.  He has decided that the state is not in the mood to raise revenue, because Coloradans have to vote to increase any tax, including the severance tax.  He has decided not to make the case to the state’s population that now is the time to review our tax policy and contradictory tax constitutional amendments.

The Governor has decided that now is the time to cut state revenues, even though the state has been cutting for the last three years.  He is apparently receiving advice from the business community that its interests are more important than public education, and six year olds can take it on the chin.

Unfortunately, the 2011-12 budget is just the beginning for school districts.  The revenues look bad for several years out.  And the Governor has already committed to at least two years of every government worker sucking it up, even though they have already experienced two years of up sucking.

State Republicans are firm against raising taxes, and are even trying to restore tax credits lost last year, including for bull semen, a uniquely Colorado tax feature.  Many Republicans want tax decreases, even as they say that education is their most important priority.  Frankly, with public school teachers unionized, public education will never be the Republican’s most important priority.  And with the Democratic Governor in thrall of cutting state revenue, public education, no matter what he says, is not his top priority.

Watering and feeding business and agriculture supersedes watering and feeding the brains of the state’s children.