Colorado lawmakers tasked with crafting a balanced budget cut more than 15% from the state’s $4.6 billion K-12 education budget Thursday afternoon.
At the same time, Colorado schools this week received a $510 million infusion of federal coronavirus relief money from Gov. Jared Polis. That’s in addition to $121 million in federal assistance earmarked for schools. These one-time funds must be used before the end of the calendar year for purposes related to the pandemic, but they will soften the immediate blow of state budget cuts. Nonetheless, many school districts are concerned state money won’t be restored for years to come, as this is likely to be the first of several difficult budget cycles.
“When we were facing a 25% reduction to the general fund, a quarter of the state budget, it’s pretty incredible that we did what we set out to do and that was to minimize the impact,” said state Sen. Rachel Zenzinger, an Arvada Democrat and member of the Joint Budget Committee.
The six-member budget committee was tasked with filling a $3.3 billion budget hole. Widespread job losses and business closures related to the coronavirus are expected to decimate tax revenues. The cut to what they had planned to spend on K-12 education was their final act of an agonizing two weeks that left no department untouched and brought both staff members and legislators to the brink of tears more than once.
“There is a reason K-12 education came at the end,” said state Sen. Dominick Moreno, a Commerce City Democrat and vice chair of the committee. “We wanted to make every painful reduction in every department before we put K-12 on the table.”
The cuts to education include $147 million in grant programs and a $577 million reduction in base school funding — about 12% — for the 2020-21 school year. The cut to base funding would bring the amount that Colorado withholds from its schools to more than $1.1 billion, an amount not seen since the Great Recession.
Earlier this week, the Joint Budget Committee cut higher education by 58% and walked back a landmark 2018 deal to shore up the state pension system in which most public school teachers participate. The committee also made cuts to health care, human services, behavioral health, transportation, and more.
With these cuts, Colorado may need to request waivers from the federal government, which requires states to maintain a certain level of education funding as a condition of receiving assistance.
The budget still needs to pass the Colorado House and Senate. The Colorado General Assembly plans to reconvene next week for a short session focused on must-pass legislation. The balanced budget recommended by the committee will require the legislature to pass numerous other bills clawing back money from grant programs, tax rebates, and other programs.
The cuts to grant programs include $135 million from a program that funded construction in cash-strapped districts from a combination of marijuana tax revenue and state land proceeds.
Moreno said cleaning out what’s known as the BEST program was particularly painful for him because his own school district has relied on it to replace aging infrastructure. The fund will be extremely limited going forward.
“I’m upset that we had to go there,” he said. “I know how far behind we are in updating our education facilities, and unfortunately we’re going to be even further behind.”
This year’s cuts come after several years in which Colorado made progress toward better funding its schools. The state constitution requires that school funding go up by a rate equal to population plus inflation each year, but to meet other budget needs, lawmakers hold back some school money every year. This amount, known as the budget stabilization factor, has totaled more than $8 billion over the last decade; this year it was $572 million.
If lawmakers continue to use this mechanism, which hits small rural districts hardest, the legislature could withhold twice as much next year. Advocates and some legislators are pushing for Colorado to consider new ways of distributing money to protect the neediest districts and those that serve poorer students, but it’s not clear yet whether there is broad interest in taking up potentially contentious changes during an abbreviated session.
Many school districts are worried that this won’t be a one-time cut, and that state funding will take years to recover, long after any federal assistance related to the coronavirus is gone. Colorado already funds its students below the national average, and voters have rejected statewide tax increases to bring in more revenue.
“The budget stabilization factor has become something that lives with us, and we want to talk about this reduction as a one-time reduction that we are committed to eliminating next year,” said state Rep. Julie McCluskie, a Dillon Democrat and committee member.
That will be easier said than done.
Committee members relied heavily on one-time money to balance the budget, money that won’t be available to offset expected revenue shortfalls coming in the 2021-22 fiscal year
Of particular worry to school districts, an expected drop in commercial property values — which would trigger a corresponding decrease in residential assessment rates due to complicated provisions of Colorado’s constitution — could cost districts roughly $490 million in property tax collections for the 2021-22 fiscal year. Current law requires the state to make up about half of that, but that’s little comfort when the state might not have the money either.