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School finance bill blank filled in

The fast-tracked 2013-14 school funding bill started the day as something of a mystery, but it emerged from the Senate Education Committee in a fairly familiar form.

The committee voted 8-1 to advance Senate Bill 13-260. The measure proposes some $5.5 billion in total program funding, the combination of state and local money used to pay basic school operating costs. That’s an increase of about $200 million over this year’s level.

That amount is pretty close to what Gov. John Hickenlooper suggested in the 2013-14 budget proposal he made last November. School districts and some legislators welcomed additional money but weren’t enthusiastic about some of the details.

As passed by Senate Education, SB 13-260 preserves two of Hickenlooper’s key proposals – an increase in preschool spending and the creation of a new program to recruit teachers for rural schools. While the governor proposed paying for those programs by shifting money from other school spending, the finance bill funds them with new money.

School districts welcomed the additional funding but said they wish the bill did more.

“We’re basically just opposed to any of these new programs,” said Dale McCall, lobbyist for the association representing boards of cooperative educational services. “What we need is money in the formula.”

Sen. Pat Steadman, D-Denver, said the improved state revenue picture means, “We’re able to reinvest in public education once again. We’re no longer making cuts and instead we’re restoring cuts. … We really have turned a corner.” Steadman is chair of the Joint Budget Committee and a prime sponsor of SB 13-260. The other prime sponsor is Sen. Evie Hudak, D-Westminster and chair of Senate Education.

The bill was only introduced late Tuesday, and had a blank space where the total program funding number was supposed to be. That was because lawmakers, executive branch officials and staff were still trying to reach agreement on how much money they could afford to put into school funding. The figure was added through an amendment passed by the committee.

A key issue for school districts was how much the bill would reduce the “negative factor,” the formula the legislature uses in tight-budget years to reduce school funding to an amount the state can afford. It’s estimated the negative factor has cut school spending by more than $1 billion below what it would have been otherwise in the last four years. SB13-260 cuts the negative factor by about $35 million, Steadman said, compared to a $30 million reduction in the governor’s original plan.

A brief flurry of worry over BEST

A hidden land mine in the introduced version of the bill was a provision that would have cut the Building Excellent Schools Today construction program out of revenues from state energy development leases on the old Lowry Bombing Range southeast of Denver.

That would have cost BEST revenues about $68 million over five years, particularly restricting the smaller cash grants the board awards for school renovations. “It effectively would shut us down this year,” said Dave Van Sant, chair of the Capital Construction Assistance Board.

The problem was solved later in the meeting when the committee voted 9-0 to pass an amendment proposed by Sen. Mike Johnston, D-Denver. The amendment removed the restrictions on Lowry revenues.

Top provisions in the school finance bill

Beyond total program funding and the BEST issue, here are the key elements of the bill:

• Creation of 3,200 more openings in the Colorado Preschool Program, which covers at-risk students. Current enrollment is about 23,360. Districts could use the funding for half- or full-day slots or for full-day kindergarten. The cost is about $11 million. The bill also proposes another $5 million for preschool quality improvement.

• Funding to hire an outside contractor –Teach for America is believed to be an interested party — to create a high-quality teacher recruitment program for rural districts. This is a revision of another Hickenlooper idea, which originally would have taken $3 million from other district funds.

• A $20 million increase in funding for special education. This will help districts that currently have to divert money from their general funds to special education in order to meet federal requirements.

• An increase of $1 million on top of the $6 million that charter schools receive as partial reimbursement for facilities costs. The bill proposed a one-year increase, but a successful amendment by Sen. Mark Scheffel, R-Parker, would make that a continuing increase.

Other provisions of the bill

• Allocation of $200,000 for the State Council on Educator Effectiveness, which advises the Department of Education on implementation of the state’s principal and teacher evaluation law.

• An appropriation of $1.3 million to pay stipends for teachers who hold national board certifications. The program has existed for some time but hasn’t been funded in recent years.

• Spending of $16 million for implementation of the 2012 READ Act, which is intended to improve literacy among K-3 students.

• An amendment added Thursday would provide an extra $1 million for facilities schools, which serve students in detention and treatment facilities.

The bill’s increases would be paid for out of the State Education Fund, a dedicated account used for school spending. The bill would spend about $720 million out of the fund. Steadman says the JBC hopes about $725 million will be left in the fund at the end of the 2013-14 budget year. The administration and the JBC, concerned that recent growth in state revenues has been fueled by one-time gains, are trying to keep a healthy balance in the fund for use in future.

The bill goes to the Senate Appropriations Committee, probably next Wednesday, before full Senate floor consideration.

BEST oversight bill passes

Before digging into school finance, the committee considered Senate Bill 13-214, which tweaks the oversight of the BEST program. The measure passed 9-0.

The program, funded by revenues for state school lands, provides matching funds for lease-purchase agreements that pay for new schools and other large projects and also gives cash grants for smaller renovation projects.

Currently, grants are recommended by the state Capital Construction Assistance Board and approved by the State Board of Education.

The bill would require final review by the legislature’s Capital Development Committee and also require the BEST board to maintain an annual reserve sufficient to cover payments on lease-purchase agreements, something it’s already been doing informally.

Some committee members wondered about the need for the bill. Van Sant said it will help ease “a perception problem” among the program among some legislators.

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