Trustees of Routt County School District No. RE-2 declined to set an override election for November to increase the property tax rate.
The district, which serves the city of Steamboat Springs, would have used the new revenue to offset continuing cuts in state aid from Colorado. The additional tax would have generated $900,000 a year.
Trustees voted to approve a budget for fiscal 2012 that reduces spending by $732,000 from current levels. The district has cut its budget every year for the past three years.
No formal action was taken on the proposed tax hike.
District voters approved tax overrides in 2001 and 2006 that generate $1.5 million a year.
Trustee Linda Brown said the economic downturn in the area would be made worse by an increase in school taxes.
"I think our energy should be focused on other things besides raising money through taxes right now," according to Brown.
Finance director Dale Mellor said a tax override vote in November would be more likely to pass than one next year. He added that the school district's advisers warned that tax hikes are often defeated at the polls during presidential election years.
The district's outstanding GO debt is rated A1 by Moody's Investors Service, but the debt is enhanced to Aa3 with coverage from the state's school credit enhancement program.
