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Lawmakers looking for ways to salvage school finance law

Sen. Mike Johnston often compared his school-finance reform law to a high-powered car that just needed “gas” from Amendment 66 to whisk Colorado into a bright future of education reform and improved student achievement.

But voters declined to pay at the pump, and Johnston’s Senate Bill 13-213 is sitting on blocks in the legislative garage. The question now is, will Johnston or others try to salvage it for parts and build a couple of compacts, and will anyone be willing to pay for them?

In the days following A66’s defeat, Johnston and other amendment backers were cautious about predicting what they or others may do.

“I can’t answer that yet,” Johnston told EdNews on Election Night when asked about which pieces of SB 13-213 he might try to resurrect. The Denver Democrat was similarly circumspect in later media interviews, although he certainly didn’t close the door on reviving parts of SB 13-213.

But lawmakers love to propose education bills, and with more than $1 billion in the State Education Fund, a dedicated account used to supplement annual school funding, there’s little doubt there will be some attempts to revive pieces of Johnston’s omnibus bill from last session.

Minority House Republicans were first out of the gate last week, announcing they’ll introduce 2014 bills to change how student enrollment is counted, provide better facilities and transportation funding for charter schools and to improve transparency of school district finances. Most of those issues were addressed in SB 13-213. (Get details in this news release.)

Another part of the GOP package is a bill by Rep. Clarice Navarro, R-Pueblo, to increase funding for English language learners and to extend the number of years students are eligible for such funding. She, along with Rep. John Buckner, D-Aurora, saw the 2013 version of that idea die in committee. SB 13-213 contained significant increases for ELL students as part of the overall K-12 funding formula.

Disassembly may be difficult

Pricey shopping listEstimated costs of some SB 13-213 components

  • Reform laws implementation – $374 million
  • Special education increases – $188 million
  • Innovation grants – $100 million
  • Charter facilities – $21.6 million
  • Gifted and talented – $7 million
  • Teacher career ladders – $6 million
  • New count and financial reporting systems – $5 million
  • Services for students in detention – $2.6 million
  • Cost and return on investment studies – $500,000

It’s hard to break out figures for some of the bill’s more expensive elements, including additional funding for at-risk and ELL students, more preschool spaces for at-risk children and full-day kindergarten for all students. But there is consensus that those elements would cost hundreds of millions of dollars. Leanne Emm, CDE budget chief, says the cost of those as separate programs would require new calculations.

Figures reflect new spending and are from a legislative staff analysis of the bill.

Johnston also frequently liked to describe SB 13-213 as a “grand bargain,” a plan that had something for every education interest, from more money for districts to some additional funding for charters to a modest amount of autonomy for principals in spending money on at-risk students.

“I think the beauty of 213 was that it was a comprehensive package,” notes Kayla McGannon, a lobbyist who had education clients.

Given that its pieces were so interconnected, SB 13-213 may be tough to disassemble. And even if parts of the law surface in 2014 as separate bills, they face the same problem that Johnston’s big bill did – they need gas.

The total SB 13-213 package would have cost an estimated $1.3 billion in 2015-16, its first year of operation. That would have been on top of the $5.7 billion Gov. John Hickenlooper is proposing be spent on district support in 2014-15.

So big-ticket elements of SB 13-213 are expected to be off the table because there’s no money to fund them.

But Capitol observers still expect Johnston and others to consider reusing smaller pieces.

The most likely one is a change in counting student enrollment. District funding currently is based on attendance counts taken during a small window around Oct. 1. Many legislators and educators favor switching to the system called average daily membership (ADM), under which student counts are taken frequently throughout the school year and averaged. The education theory behind ADM is that districts will have a greater incentive to keep students enrolled.

But rolling out ADM isn’t without cost – estimates run between $5 and $10 million – and it would take some time to implement. Even SB 13-213 wouldn’t have changed the count system until the 2017-18 school year.

New bills will get close scrutiny

Even relatively small and largely one-time costs like changing to ADM may face opposition.

That’s because school districts, now without the prospect of an A66 boost, will be pushing hard to get as much support as they can from the current school finance formula.

Hickenlooper is proposing that basic K-12 support, known as Total Program Funding, increase only by inflation and enrollment growth in 2014-15, as required by Amendment 23. That would put total program at about $5.7 billion in state and local revenues. The governor’s plan proposes very little change in what’s called the negative factor, a mathematical formula used by the legislature to reduce school funding from what it would have been under the full terms of A23, the 2000 constitutional amendment that will continue to guide education funding now that A66 is dead. It’s estimated districts have lost more than $1 billion in funding over the last few years because of the negative factor.)

Districts lost a fight with Hickenlooper and the Joint Budget Committee last spring over reduction of the negative factor. Districts are expected to resume the battle in January and to resist spending money on new education initiatives instead of using it to trim the negative factor.

“Most districts want more money spent out of the State Education Fund” on total program, said one lobbyist. “I think it’s going to be a rough year.”

Kerrie Dallman, president of the Colorado Education Association, said recently, “Our legislators need to understand the burden and stress unfunded mandates have placed on educators across the state. We would caution the upcoming Colorado General Assembly against adding any new education reforms to this over-burdened education system.”

Other education advocates also think the state perhaps should focus on successfully implementing education reforms already in the pipeline.

This school year districts are rolling out new academic content standards, a new early literacy program and evaluating principals and teachers under the terms of Senate Bill 10-191, the landmark evaluation law. That system will be fully implemented in the 2014-15 school year, along with new online tests.

“We need to regroup and focus on things that already are in law,” said Chris Watney, president of the Colorado Children’s Campaign, which was a major backer of SB 13-213 and of A66.

Speaking of those initiatives, Sen. Rollie Heath said, “If we get all of that right I would be very happy,” adding, “I don’t see a lot of meaningful [new] things happening” during the 2014 session. The Boulder Democrat was Johnston’s cosponsor on SB 13-213 and will be Senate majority leader next session.

There’s even some stray Capitol chatter that the defeat of A66 could put existing reforms – or at least their timetables – at risk.

Tony Salazar, CEA executive director, acknowledged that risk recently, but he added, “It’s too early to say if delays are needed.”

Even Hickenlooper, speaking with reporters last week, said, “If 66 had passed we would have been able to implement Senate 191 at a high level,” along with other programs. “The money’s not there now.”

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