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Three ways Colorado school funding could change this year

Children and adults wait for bagged food delivered by a school bus at Berkeley Village Mobile Home Park in Arvada, Colorado.

The pandemic changed how school districts serve families and made it harder to identify students living in poverty.

Kathryn Scott / Special to The Denver Post

A more comprehensive way to account for the challenges students face outside the classroom. More money for students with disabilities. Matching funds to help poorer districts afford some of the extras that taxpayers in wealthy districts already provide.

A special committee on school finance will vote on whether to recommend these proposals to the legislature Jan. 27.

Legislators of both parties have expressed interest in matching money with educational needs and in spreading the state’s dollars for schools more equitably. 

The special committee on school finance convened last fall with the ultimate goal of rewriting the 1994 school finance formula. Rather than recommend major changes this session, committee members have identified proposals they hope can make a real difference for students and schools while they keep working on the larger problem. 

“We’re doing some of the building blocks this year and [then] we’ll tackle the rest of the formula,” said state Rep. Julie McCluskie, a Dillon Democrat who chairs the committee.

Helping students in poverty

The problem: Colorado’s main method for counting students in poverty — participation in federally subsidized lunch programs — is broken. Colorado gives extra money to help educate students who are deemed at risk because students in poverty often face a host of challenges. Students who are in the early stages of learning English are also considered at risk.

But districts can’t count those students accurately, especially during the pandemic, so they are missing out on state money. Even before the pandemic, advocates and school officials alike said the system put too much administrative burden on schools and didn’t count all eligible students.

The proposed solution: Lawmakers are considering a new way of counting students in poverty that would use a combination of eligibility for various federal and state assistance programs, along with census information about socioeconomic conditions in the neighborhoods where students live. 

The committee commissioned the Urban Institute to study Colorado’s at-risk measure alongside alternatives. By using multiple measures, officials hope to get a fuller picture and reduce the burden on school staff. 

“We would hope that a new measure or measures would capture more kids,” said Leslie Colwell of the Colorado Children’s Campaign.

More funding for special education

The problem: Colorado funds just a fraction of the cost of educating students with disabilities. That means districts have to draw from their general education budgets to pay for student services that are required by law. 

Under current law, districts should get an extra $1,250 for each student with disabilities, and an extra $6,000 for students who have disabilities that require more expensive services. But Colorado only pays about half the cost of the latter group. 

Meanwhile, the real cost of providing special education services is closer to $10,000 per child, according to the Special Education Fiscal Advisory Committee’s annual report

The proposed solution: The committee may favor increasing funding for general special education to $1,750 per student. It would also allocate another $40 million next fiscal year to eventually cover 80% of the higher costs of some disabilities. Starting in 2024-25, the state would increase funding to account for inflation.

The bill would also direct the Special Education Fiscal Advisory Committee to undertake a study of the true cost of special education services and an analysis of the best way to share costs for those services. 

The biggest question is whether lawmakers, particularly those on the Joint Budget Committee, feel the proposal is sustainable. They don’t want to increase funding now only to slash it in a few years.

State Rep. Leslie Herod, a Denver Democrat, said she wants assurances that extra money will improve services for students with disabilities, a concern shared by many Republicans. 

“If we’re not going to improve the achievement gap, why are we giving more money?” Herod asked, adding that the same question applied to spending more money on at-risk students. “I am a strong liberal Democrat so I do support more funding for our schools, but I also think we need to see outcomes.”

Extra help for districts with little property wealth to support new taxes

The problem: Wealthy districts can pass tax increases known as mill levy overrides to pay for extra services on top of their base budgets, but districts with little property wealth struggle to do the same. These extra taxes amount to another $1.5 billion a year for better-off districts. 

Last fall, district officials described for lawmakers what a difference the extra money can make. Thanks to the generosity of voters, the Aspen school district can build teacher housing and run its own subsidized lunch program for families that struggle to get by in the resort community despite earning too much for the federal program. 

Meanwhile, the Merino school district in northeastern Colorado recently had to abandon plans for a culinary arts program because it couldn’t afford the vent for the commercial kitchen. 

Even if Merino voters agreed to tax increases, they would generate a fraction of what the same tax rate generates in Aspen.

“It’s not because our community is not supportive of us,” Merino Superintendent Rob Sanders said.

The proposed solution: Lawmakers are considering a bill that would provide matching state funds for districts with lower property wealth and lower incomes that nonetheless vote to raise their own taxes. A working group from the Colorado Association of School Executives is pushing the proposal, alongside McCluskie and state Sen. Bob Rankin, a Carbondale Republican. 

This is probably the most controversial proposal before the special committee, with both Democrats and Republicans raising questions. Some don’t think the state should apply leverage to local electoral decisions, while others wonder if it’s the best use of scarce education dollars.

But at a Monday committee hearing, even some critics said they were warming to the idea — or at least to the idea that the state has a role in solving this problem.

Many more districts have asked voters to approve mill levy overrides since the state started holding back money during the Great Recession. Districts that are successful can offset some of the impact of state cuts, while districts that cannot pass tax increases are harder hit.

Chalkbeat reporter Jason Gonzales contributed to this report.

Clarification: A subhead in this story has been changed to more accurately describe the special education funding proposal. It would move the state closer to full funding of its existing obligations, not toward full funding of the actual cost of special education, some of which is borne by districts.

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