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Colorado rural schools, many strapped for cash, could get a boost from lawmakers

Students at Merino Elementary School work during class. (Photo by Nic Garcia/Chalkbeat)
Students at Merino Elementary School work during class. (Photo by Nic Garcia/Chalkbeat)

Every week since November, Sterling school superintendent Jan DeLay has met with her administrative team to figure out how to cut $1.25 million from the district’s budget.

The eastern Colorado district already has fired teachers, ended middle school sports and is now moving to a four-day school week.

“You start running out of places to trim,” DeLay said, “and you have to start chopping off the arms and legs of the district.”

It’s a longshot, but some relief could be on the way to DeLay’s rural school district and others like it.

A state Senate committee is expected Tuesday to debate Senate Bill 267, a bipartisan bid to drastically alter the state’s budget and send much-needed cash to rural schools, hospitals and roads.

Sponsored in the Senate by Sterling Republican Jerry Sonnenberg and Denver Democrat Lucia Guzman, the bill would send nearly $400 million to the state’s rural schools during the next three years.

“Even though they get more money on an annual basis, we’re not keeping up with their costs,” Sonnenberg said.

But rural schools shouldn’t cash any checks just yet. Both political parties would need to make major concessions for it to advance. Gov. John Hickenlooper, a Democrat, has said he’s not ready to sign off on the deal.

“I think there’s some serious issues with the bill,” he said last month. “But it’s certainly a good start.”

The bill would require changing how the state designates taxes paid by hospital patients.

Currently, that tax, known as the hospital provider fee, is deposited into the state’s general fund. That pot of money is subject to the spending limits of the state’s Taxpayer Bill of Rights, or TABOR. Since 2015, the tax has pushed the state near or above its spending limit and has triggered taxpayer refunds.

If the state moves that tax from the general fund to an enterprise account, the money collected from hospitals wouldn’t be subject to TABOR restrictions.

Changing how the state handles the hospital fee has been on Democrats’ wish list for years. Republicans have balked at the idea, saying reclassifying the fee would be unconstitutional.

Sonnenberg, who came around to the proposal this year as some rural hospitals face closure, says he believes his bill follows the law because it would require the state to lower its spending cap.

Democrats in the House said they hoped to amend the bill to leave the state’s spending limit where it is, providing lawmakers more flexibility with the budget.

But on Monday, Sonnenberg said he would kill the bill if House Democrats insisted on leaving the state’s spending cap as is.

“It has to be a give and take on both sides,” he said, according to the news website Denverite. “I’m willing to give a little here. But I’m not going to give it all and have it be the same hospital provider fee (proposal) they’ve brought time and time again.”

While schools in every corner of the state are tightening their budgets, only those that meet the state’s definition of “rural” or “small rural” — designations based on size and distance from a metro area — would get a cut of the $400 million.

Rural schools must have fewer than 6,500 students and small rural must have fewer than 1,000 students.

In the bill’s current form, 108 school districts would get a proportion of $79 million next school year and $160 million for the following two.

The total would be split based on the amount the state reduces funding across all school districts to balance the state’s budget.

According to a legislative analysis, next year the Kim School District would get the smallest share, $52,200. The Telluride School District would get the largest chunk: $655,500.

It would mean nothing for the tiny urban school district of Sheridan, arguably one of the state’s poorest.

“I certainly am in favor of giving rural schools more money,” said Michael Clough, superintendent of Sheridan, who was once a rural schools chief. “But there are other needy places in the state that could get overlooked. My heart is with rural Colorado. But it’s important to look at the districts who are serving our most needy children.”

Sonnenberg, the bill’s sponsor, said he’s aware of the blight of school districts along the Front Range. But he said he believes they’re better positioned to weather cuts.

“It’s easier for them to mitigate these problems because of their size,” he said. “When you go to a rural school and you have to cut one teacher, you cut an entire grade. Some schools, you cut two grades.”

One way to make the funding more equitable would be to consider the different kinds of students each school district educates, said Tracie Rainey, executive director of the Colorado School Finance Project, a nonprofit that studies the state’s school funding system.

“Do they have a lot of kids who don’t speak English, who are living in poverty?” she said. “These are cost pressures out of their control that are just as dramatic as the size of the school district.”

Rural districts are far from monolithic.

According to state data, school districts with the largest proportions of students learning English as a second language, student who are poor and students with special needs are overwhelmingly rural.

Take the Agate School District on the eastern plains: 100 percent of its students qualify for federal funding earmarked for the nation’s poorest students, 40 percent of students are learning English as a second language and 20 percent are enrolled in special education.

In contrast, the Kit Carson School District, about 100 miles southeast of Agate, serves a much different population: 3 percent of students qualify for Title I funding, 2 percent are learning English as a second language and 5 percent of students are enrolled in special education.

Regardless of how the money is divided, the one-time aid package lawmakers are considering would be welcomed in Sterling.

But it wouldn’t solve the district’s long-term funding problems.

“It would be a Band-Aid,” said DeLay, the district’s superintendent. “It wouldn’t stop the bleeding. We’d use it as a cushion for increases in health insurance. We’d put some of it back in reserves. We can make payroll in January.”

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