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Beginning of the end for A23?

Some future legislative study committee may look back and conclude for the record that 2009 was the year that Amendment 23 lost its mojo.

The state constitutional amendment, which contains the formula that drives annual increases in state aid to K-12 schools under certain conditions, was only part of larger discussions Monday by the legislative panel that’s studying school finance this year, the Interim Committee on School Finance.

But, it seemed clear from various comments that A23 may be falling victim to the state’s budget crunch.

“Effectively, Amendment 23 is over,” said Sen. Chris Romer, D-Denver.

Amendment 23 requires state support of school districts to increase by inflation every year, with an additional 1 percent increase added on top of that. For the 2009-10 budget year, the formula makes that base increases 4.9 percent, a seemingly healthy figure when other state programs are being cut.

But, the continuing decline in state revenues likely means that $110 million, about 1.9 percent, will be cut when the legislature reconvenes in January. The 2009 legislature put that amount in “escrow” until next year so it could be pulled back if needed to balance the state budget.

As Romer put it Monday, “The most likely scenario is that it [the $110 million] is going to come back. … I would like to keep the cuts to education to no more than $110 million.”

Another blow to Amendment 23 is the fact that the 1 percent annual “bonus” increase expires after the 2010-11 budget year.

And, economic conditions may neuter the A23 formula for the 2010-11 budget. State economists estimate inflation this year could be zero, meaning the biggest piece of the A23 formula won’t be a factor in the 2010-11 budget.

Finally, the past practice of applying A23 to all state education spending may be at an end. In addition to base per-pupil aid, the state also gives school districts categorical funds (money for transportation, special needs children and other programs) and calculates individual district aid based on “factors” such as cost of living, district size and at-risk students.

Julie Pelegrin of the Office of Legislative Legal Services told the interim committee that “Amendment 23 does not apply to the factors. … You probably have a lot of leeway with the categoricals as well.”

Pelegrin, an expert in drafting education bills, said lawmakers “can do whatever you want with the School Finance Act” but that A23 does require keeping some sort of per-pupil base.

The issue of what A23 covers has been touchy in the past, but Pelegrin’s comments drew no questions or challenges from panel members.

“Amendment 23 is essentially over” if the factors aren’t covered and when the 1 percent bonus goes away, said Lisa Weil, policy director of Great Education Colorado, an advocacy group that grew out of the 2000 campaign to pass A23,

After receiving briefings on various school finance details, the committee broke into four working groups that will study specific issues – new sources of revenue, funding for at-risk students, equity and rural schools, and the formula and the factors. Those working groups will include committee members, other legislators and non-lawmakers and will report to the full panel, which next meets on July 27.

Legislative interim committees studied school finance in 1987, 1993 and 2005.

“It’s one of those perpetual soap operas. … It never really gets a conclusion,” quipped former state Sen. Sue Windels, who chaired the 2005 panel.

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