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Funding reform gets first full airing

A lot of worries about the proposed overhaul of Colorado’s school finance system bubbled up Tuesday during a marathon hearing of the Senate Education Committee, the first formal legislative review of the 174-page bill.

Sen. Mike Johnston studies a document during Senate Bill 13-213 testimony.
Sen. Mike Johnston studies a document during Senate Bill 13-213 testimony.

Several superintendents voiced strong support for the bill, but the attitude of many other witnesses was “Yes, but,” as in “Yes, we like the bill’s goals, but we still have a lot of questions about the details.”The hearing dragged on for more than nine hours and ended with a lot of questions unanswered, given that the committee didn’t review in detail nor vote on key amendments, a task that’s scheduled for a meeting Wednesday morning. Prime sponsor Sen. Mike Johnston, D-Denver, said he has key amendments that would ease the financial concerns of some districts.

“We really don’t know what we’re opposing or fighting for,” noted Garfield Re-2 Superintendent Susan Birdsey, reflecting on the uncertainties about the bill.

Key elements of Senate Bill 13-213 include increased funding for kindergarten and preschool, significantly more money for districts with the highest concentrations of at-risk students and English language learners, more money for special education, extra payments to districts for the cost of implementing reform mandates and some changes in requirements for district contributions to school costs.

Legislative passage of the bill wouldn’t by itself change the funding system. That would be triggered only if state voters approve a tax increase, estimated at $1 billion, to fund the program. (Get more details on the bill here.)

Several superintendents were positive about the bill, including those from Academy 20, Greeley and St. Vrain, whose superintendent, Don Haddad, called the bill “a giant step in the right direction.”

Support was voiced by representatives from some education and business groups, although Kelly Brough, CEO of the Denver Metro Chamber of Commerce, made it clear that her group isn’t necessarily on board with Johnston’s plan for a November 2013 election on a tax increase. A group of charter school superintendents and executives also supported the bill.

But witnesses representing districts from Cherry Creek to tiny Western Slope districts to the head of the state’s largest teachers union raised a variety of questions.

Here’s a summary of key issues raised during the hearing:

Shift of funding: The bill would shift larger shares of funding to districts with higher populations of at-risk students, and that has a lot of districts nervous.

“The funding formula is overly biased,” said Brett Ridgway, chief business officer for the Falcon schools. “From our point of view this proposal does not adequately address funding for all school districts.”

Guy Belleville, chief financial officer for the Cherry Creek Schools, said the bill has a “rob Peter to pay Paul” aspect.

Durango Superintendent Dan Snowberger said, “There are a lot of winners, big winners in the bill. … Any district that would see minute increases would have to be considered a loser.”

Negative impacts on some small districts: While some rural districts would benefit from the bill, others would not, and several of those superintendents testified. “This affects rural school districts much differently than the Front Range,” said Ridgway Superintendent Cheryl Gomez.

Funding adequacy: More than one witness questioned whether the bill’s proposed funding is based on any rational standard of what’s actually needed to achieve education goals. “There’s no identification of what adequate funding is,” said Littleton Superintendent Scott Murphy. Cherry Creek’s Belleville had the same criticism.

Johnston said a cost study is built into the bill, to kick in after it passes.

Pace of the bill: Some witnesses, and a couple of Republican committee members, wondered if the bill is being pushed too quickly. “A bill of this magnitude must not be rushed,” said Tony Salazar, CEO of the Colorado Education Association. “We need to get this bill right.”

Treatment of charter schools: Charter school advocates don’t think the bill has enough in it for at-risk students at charters and about district sharing of local tax overrides. They also want some money for facilities costs. But some school district witnesses complained the bill puts too many requirements on districts in dealing with charters.

When the hearing started, the Capitol’s Old Supreme Chamber was packed to overflowing, and audio from the hearing was piped into another Capitol meeting room. As 11 p.m. passed only about three dozen people were still in the room, including committee members.

Inside Senate Bill 13-213

This summary reflects the bill as introduced.

Notable increases

  • $1 billion more for K-12 schools, if approved by voters
  • $600 per-student grant to districts for implementing reform laws
  • $100 million for an innovation fund districts could use for such things as longer school days and years
  • $80 million increase in special education funding for students with more severe disabilities
  • $6 million to provide “additional career opportunities” for highly effective teachers
  • $5 million to launch the new student count system a create a financial reporting system

Key elements of the bill

Base funding

Overall K-12 funding would be increased by about $1 billion.

Enrollment counts would be based on average daily membership counts, collected four times a year from school districts.

District funding would be calculated using prior year enrollment figures.

Multi-year averaging of enrollment losses would be retained for declining districts to soften funding cuts.

Base funding would include availability of full-day kindergarten for all students and full per-pupil funding of all high school students regardless of how many classes they take.

Additional half-day preschool slots for at-risk four-year-olds would not be included in the per-pupil base because that program is funded separately.

Adjustments to base funding

The current formula includes “factors” designed to increase funding for individual districts based on their regional cost of living, numbers of at-risk students, size and other characteristics. Johnston would retain some of those – to be called “weights” – but with some changes.

The definition of at-risk students would be expanded to also include those eligible for reduced-price lunch, in addition to those eligible for free lunches.

The number of English learners in a district would become a weight.

Double weights would be assigned for students who are both at-risk and English language learners. State at-risk funding would be more targeted to individual schools than it is now.

The small-enrollment weight would be retained only for districts under 4,300 students, taking out some districts that now receive that funding, and the current district cost-of-living weight would be eliminated.

Categorical funding

Districts currently receive additional funding outside of the main formula to help with such costs as special education, gifted and talented programs and transportation.

Johnston’s bill would retain most of those funding streams but increase by $80 million the money available for special education.

State & local shares

The bill would set a 60/40 goal for the ratio of state and local contributions to school funding. That would be used as a base to calculate the expected contribution from districts, based on a district’s property value, median resident income and concentration of poverty. Districts that aren’t contributing the amount of local revenue needed to meet their share would not receive additional state funds after an initial “hold unharmed” period, creating an “incentive” for them to seek tax increases from their voters. (This affects about two-dozen districts, and the provisions have been softened from the original draft of the bill.)

Other provisions

The state would provide matching money for districts with low property values that want to raise local taxes but can’t generate much revenue from those local increases.

An innovation fund would be created that districts could use for such things as longer school days and years.

There would be an increase in the current limits on local tax increases.

There would be additional state funding, proposed to start at $600 per student, to help districts implement state reform requirements. These funds are intended to give districts an infusion of cash to partially offset the budget cuts of recent years but would not be included in the per-pupil base so as not to put future pressure on the state budget. In the most recent version of the bill, the $600 amount would increase as revenues increase.

The proposal would not eliminate the “negative factor,” the formula used in recent years to cut what school funding otherwise would have been to the levels the legislature felt it could afford in tight budget years.

Charter schools

Districts will be required to share revenue with their charter schools from local tax increases.

There would be increased special education funding for charters.

At-risk funding would be based on actual enrollment of such students at charter schools.

The state would give extra money to schools overseen by the Charter School Institute based on a percentage of local tax increases successfully passed by districts.

There would be special enrollment counting provisions to avoid penalizing fast-growing charters.

Measuring impact

The legislature would commission an initial study of the full cost of the K-12 systems, with updates every four years. Those subsequent studies also would review whether spending is producing educational improvements and higher student achievement.

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