School Finance

Finance bill caught in House logjam

The House couldn’t find time on a chaotic Friday night to pass the bill proposing a massive overhaul of Colorado’s school funding system.

Colorado House floor
Sen. Mike Johnston (reddish tie) kills time on the House floor with aide Will Gohl (left), daughter Ava Johnston and aide Damion LeeNatali (far right).

The bill came to the floor shortly after 3 p.m. But progress got derailed by a big blowup over a surprise amendment concerning what to do with new revenue that would flow to the state after a tax increase is approved by voters but before the money is needed to implement Senate Bill 13-213.

If voters approve a tax increase this fall, additional revenue would start flowing in 2014, but SB 13-213’s new costs wouldn’t kick in until July 1, 2015.

Realizing that problem at the 11th hour, supporters had an amendment drafted, and bill sponsor Rep. Millie Hamner, D-Dillon, formally proposed it after the bill came up on the House floor. The change would have put the extra 18 months of revenue into school construction and broadband upgrades, among other uses.

The amendment was a surprise to everyone, from minority Republicans to education lobbyists. After a few minutes of heated rhetoric on the floor and frantic texting in the lobby. Hamner withdraw the amendment and went off to huddle with Sen. Mike Johnston, D-Denver, aides and other lawmakers.

A compromise was reached that proposes putting up to 40 percent of the revenue into a new education reserve fund, up to 40 percent into the Building Excellent Schools Today construction fund and smaller amounts into an educator effectiveness fund and an education technology fund.

But by then, SB 13-213 had lost its place in the big queue of bills on the House calendar. Members wrangled for hours over controversial energy conservation and marijuana bills. Hamner learned after 11 p.m. that SB 13-213 wouldn’t be brought back up.

The bill (and the amendment) now are on the calendar for Monday, the same day the House may hold preliminary debate on Senate Bill 13-260, the funding bill for the 2013-14 school year.

Once SB 13-213 clears the House it will return to the Senate for consideration of a long list of House amendments. However, there isn’t expected to be conflict over those changes, since the House changes were vetted ahead of time by the bill’s author, Sen. Mike Johnston, D-Denver.

While final legislative approval is nearing, that won’t be the last word for the bill. The bill requires a roughly $1 billion tax increase, which would have to be approved by voters.

Some of the bill’s supporters want a public vote this November, although it’s not certain that will happen. Coincidentally, the titles of 20 proposed ballot measures related to SB 13-213 were approved Friday by a state review board.

Kathleen Gebhardt, lead lawyer in the Lobato v. State school funding lawsuit, appeared before the review board Friday morning with appeals to several of the proposed measures. The review panel, known formally as the Title Board, granted her appeals only in relation to one small wording change. Gebhardt told EdNews her intervention in the matter “wasn’t a hostile maneuver by any means” but an attempt to clarify how the complicated funding mechanisms actually would work in some of the proposals submitted by the business group Colorado Forum.

Gebhardt, who represents three private citizens on the issue, said she doesn’t know if they will take the matter to the Colorado Supreme Court, as is allowed on the wording of ballot measures.

Long road for big bill

SB 13-213 started with a study process that began two years ago and involved hundreds of meetings and private conversations, most of them involving Johnston and his cosponsor, Sen. Rollie Heath, D-Boulder. But the bill’s progress through the legislature has been torturous.

Minority Republicans have consistently opposed the bill, saying it doesn’t contain enough education “reform” but really meaning that they oppose raising taxes.

Lobbying from a variety of education interest groups has forced a variety of significant changes in the bill. After all that work, few interest groups – ranging from charter schools to school districts to business groups – remain whole-hearted in their support, or in their opposition.

Inside a much-amended bill

Weighing in at 189 pages (at last count), SB 13-213 is as intricately balanced as a big Swiss clock, and just as complicated. (One part of the bill includes a quadratic equation.)

Rep. Millie Hamner, D-Dillon
Rep. Millie Hamner, D-Dillon / File photo

During prior House floor debate, prime sponsor Hamner admitted that maybe the only people who understand it are school district chief financial officers. One education lobbyist, watching from the gallery, grimly quipped that even the CFOs may not know all the bill’s intricacies.

That said, here’s an overview of the bill’s main features, as the bill stood following House amendments.

When it starts: The law would go into effect for the 2015-16 school year, but only if voters approve an income tax increase in November 2013. The new funding system wouldn’t go into effect until voters approve the necessary tax increase and would expire entirely if no election is held – or is successful – by November 2017.

What it costs: The full annual cost of the bill, including spending that would have to be approved by future legislature, is about $1.1 billion. The increase in basic K-12 operating costs, known as total program funding, is just under $900 million a year. Current spending is about $5.2 billion in state and district funds.

How enrollment is counted: The basis of any school funding system is enrollment. The new system would measure enrollment based on a method called average daily membership, which counts actual district enrollment throughout the school year. The current system is based on attendance counted during a narrow time window around Oct. 1 each year.

Early childhood education: A key feature of the bill is funding for full-day kindergarten for all students who want it. (Kindergarten attendance is not mandatory in Colorado.) The bill also would fund half-day preschool for all three-, four- and five-year olds who are eligible for the Colorado Preschool Program, which serves poor children and those who have other defined risk factors. More than 46,000 students are enrolled in full-day kindergarten, and another 20,500 attend half day. Current preschool enrollment is about 20,000; it’s estimated that more than 14,000 at-risk four-year-olds currently don’t participate.

Spanish instructor -  BigStock Photo
Spanish instructor – <a href="">BigStock Photo</a>

At-risk students and English language learners: The bill puts significant additional resources into districts with the highest percentages of at-risk students and English language learners.

• All districts would receive 120 percent of the statewide per-pupil base for each at-risk and ELL student.

• Districts whose enrollment of those students exceeds the statewide average (which stands at about 42 percent) would receive funding for those students of up to 140 percent of the statewide average.

• Students who are both at-risk and ELL will receive double funding for up to five years.

• The definition of at-risk is expanded to include students eligible for reduced-price lunch (about 60,000 students now). That’s on top of the approximately 289,000 students eligible for free lunch.

• A group of 15 districts would receive “supplemental” at-risk funding (about $274 per pupil in most cases). Those districts include Jefferson County, St. Vrain, Mesa Valley, Thompson, Brighton, Widefield and Pueblo 70, plus some smaller districts. Those districts felt they were slighted by the bill’s original provisions, and this amendment was added in the House. Another group of more than 80 districts are in a similar situation but wouldn’t receive additional funding.

Other adjustments for individual districts: The current system adjusts many districts’ funding based on size. Under the new system only districts with fewer than 4,023 students will receive additional funding for size. Another current “factor” provides extra money to many districts based on the cost of living for staff. That’s eliminated by SB 13-213. Some larger, primarily suburban districts with lower concentrations of poor students felt they were unfairly treated in the original version of the bill. In response to pressure, an amendment created “floor” funding for 31 districts equal to 95 of statewide average per-pupil funding. Additional, more technical safeguards also were built in for those districts.

Additional per-pupil funding: Under part of the bill called Teaching and Leadership Investment, every district would receive an additional $441 per pupil. This money is generally intended to help districts with the costs of implementing new content standards and tests, the new teacher evaluation system and other recently state-imposed reforms. The proposed amount was originally $600 a student, but that figure was cut to shift money to pay for other amendments to the bill. The amount gradually would rise to $600 depending on increases in revenue from the new taxes. The amount could go down if revenues from the new taxes decline.

Students in class at GALS wearing GALS T-shirts, which is part of the charter school's dress code.
Students in class at GALS wearing GALS T-shirts, which is part of the charter school’s dress code.

Charter funding: This was a sore point as the bill moved through the legislature, with charters unsuccessfully lobbying for a requirement that local tax overrides be shared pro-rata with charters, something the school districts opposed. As it stands, the bill includes an override-sharing negotiations process between districts and charters. Charters that don’t like the way that turned out could switch their oversight to the state Charter School institute. The bill contains $18 million to partially compensate charters for facilities costs and creates a tiered system for allocating that money. The measure also would increase at-risk and ELL funding for charters and provide other increases for institute-supervised schools.

“Backpack” funding: Another hotly contested issue was how much autonomy principals would have in spending of at-risk and ELL funding provided by the state. Some education reform groups favor wide school-level autonomy, sometimes know as “backpack funding” or “money following the student.” The Colorado Association of School Boards opposed the bill’s original provisions as infringing on the constitutional powers of school boards. A compromise amendment adopted in the House gives district superintendents and boards oversight over principals’ spending plans.

Special education: The bill includes $80 million additional funding for what’s called Tier B special education support and would allocate additional funding as revenues from the next taxes increase over time. Tier B is for severely disabled students.

Innovation grant fund: The bill also proposes a $100 million fund that could be distributed to districts that apply for various education reforms. The bill originally envisioned most of that money being used for extended school days and years. But amendments added during the legislative debates have added other permissible uses, such as student retention. The grants would be administered by a new board appointed by the governor.

District tax increases: The bill would raise current ceilings on the amount of local tax increases, known as mill levy overrides, that districts can seek from voters. It also would permit new kinds of earmarked local tax increases, including for early childhood education, technology purchases and building maintenance and staff cost of living.

The bill also includes a calculation intended to determine which districts are raising less in local taxes than their property wealth would indicate. But amendments ensure that those districts wouldn’t ever be penalized and includes a “hold harmless” provision affecting 25 districts.

SB 13-213 also contains a provision for state matching funds to districts with low property values.

Sens. Mike Johnston and Rollie Heath
Sens. Mike Johnston and Rollie Heath confer during earlier SB 13-213 committee debate.

Accountability: Johnston likes to point out that the bill would provide an unprecedented amount of “transparency” about school and district spending. The bill requires periodic reports on both adequacy – whether schools are receiving enough money – and return on investment – whether the increased K-12 spending in yielding improved student achievement.

Miscellaneous provisions: The bill also includes additional, if relatively small, amounts of additional funding for teacher career development, gifted and talented students and for facilities schools, which serve students in detention and residential treatment.

listening tour

We asked six Colorado school board members what they want from the state’s next governor. Here’s what they said.

Democratic gubernatorial candidates Donna Lynne, Noel Ginsburg and Cary Kennedy at a candidate forum hosted by the Colorado Association of School Boards. (Photo by Nic Garcia)

Late last week, nine candidates for Colorado governor came together to talk education, addressing an annual fall conference of school board members.

Now, we’re giving some of those audience members a chance to speak up.

Before the gubernatorial hopefuls took the stage, Chalkbeat recorded interviews with a half-dozen school board members who represent districts across the state. Our question to them: What are the big education questions you hope the next governor will take on?

Not surprisingly, funding challenges came up time and again.

One school board member asked for a more predictable budget. Another asked for schools to get their fair share of annual increases in new tax dollars. One went so far as to say the next governor would be a chicken if he or she didn’t take on reforming the state’s tax code.

We also heard a desire for leadership on solving teacher shortages, expanding vocational training and rethinking the state’s school accountability system.

Here are the six gubernatorial wishes we heard from Colorado’s school board members:

Reform TABOR to send more money to schools

Wendy Pottorff, Limon Public Schools

Since the Great Recession, Colorado schools have lost hundreds of thousands of dollars. And while the state legislature has tried to close its education funding shortfall, lawmakers haven’t been able to keep up. Getting in the way, Pottorff says, is the state’s Taxpayer Bill of Rights, or TABOR.

Change the conversation about public schools

Paul Reich, Telluride School District

Reich says public schools are under attack under the false premise that they’re failing — and that isn’t helping the state recruit bright young teachers. He said the next governor must change the conversation about schools to make teaching a more desirable profession.

Provide a clear budget forecast

Anne Guettler, Garfield School District

Approving a school district’s budget is one of the many responsibilities of a Colorado school board. That’s a tall challenge when the state’s budget is constantly in flux, Guettler says. She hopes the next governor can help provide a clearer economic forecast for schools.

Rethink school accountability to include students and parents

Greg Piotraschke, Brighton 27J

Colorado schools are subject to annual quality reviews by the state’s education department. And it’s time for the state to rethink what defines a high-quality school, Piotraschke said. He suggested the governor could help rethink everything from how the state uses standardized tests to how to incorporate parents and students into the review process.

Give schools more resources to train the state’s high-tech workforce

Nora Brown, Colorado Springs District 11

In light of Colorado growing tech sector, several gubernatorial candidates have come out in support of more technical training for Colorado students. But that costs money, Brown says. The Colorado Springs school board member said promising better job training for high school students without more resources is empty.

Remember there’s a difference between urban and rural schools

Mark Hillman, Burlington School District

Crafting statewide policy is an onerous task in Colorado, given the diversity of the state’s 178 school districts. Hillman said the next governor must remember that any legislation he or she signs will play out 178 different ways, so they must be careful to not put more undue pressure on the state’s smallest school districts.

Colorado Votes 2018

Five things we learned when Colorado’s gubernatorial candidates got on the same stage to talk about education

Colorado Republicans running for governor addressed some of the state's school board members at a forum hosted by the state's association of school boards. From left are George Brauchler, Steve Barlock, Greg Lopez, Victor Mitchell and Doug Robinson. (Photo by Nic Garcia/Chalkbeat)

Nine Republicans and Democrats hoping to become Colorado’s next governor offered contrasting views Friday of the state’s public schools to an audience of more than 100 local school board members.

Most of the five Republicans told the crowd of locally elected officials — who are charged by the state’s constitution with governing Colorado’s public schools — that their programs were in need of improvement and innovation, and that they were there to help.

The four Democrats hoping to succeed fellow Democrat Gov. John Hickenlooper, who is term-limited, pledged to reform the state’s tax code to send more money to schools.

The candidates spoke at the annual fall delegation conference of the state’s association of school boards.It was the first forum of its kind to address education issues exclusively this election election cycle.

Unlike previous elections, Colorado’s public education system has been a key policy debate early in the campaign. Several candidates, especially Democrats, have worked on education issues before.

Here are our five takeaways from the forum:

The Republican candidates didn’t pull any punches when they said the state’s public schools were in need of improvement — and several said that they were the ones to do it.

From District Attorney George Brauchler to businessman Doug Robinson, every Republican candidate said one part or another of the state’s school system needed to do better.

“Education is life itself,” said former state lawmaker Victor Mitchell. “And there is no greater challenge facing our state than 50 percent of our at-risk kids who graduate can’t complete college-level course work.”

Both Mitchell and Robinson pointed to their experience as entrepreneurs as evidence that they could help set the state’s schools free of what they consider unnecessary red tape. Brauchler called for empowering teachers and parents.

Every Democrat and several Republicans agreed that the state’s schools were in a “funding crisis.” But they offered very different paths forward.

It was an easy question for Democrats. Businessman Noel Ginsburg, former state Sen. Michael Johnston, former state treasurer Cary Kennedy and Lt. Gov. Donna Lynne were in lock-step that the state’s schools are in need of more money.

“If we don’t fundamentally solve this crisis, the rest of the issues don’t matter,” Johnston said.

Former state Sen. Michael Johnston and Lt. Gov. Donna Lynne talk after a forum for gubernatorial candidates. Both are Democrats. (Photo by Nic Garcia/Chalkbeat)

Johnston and Kennedy forcefully pledged to take on the state’s Taxpayer Bill of Rights, which limits how much tax revenue the state can collect and requires voter approval to raise taxes.

Lynne was more tempered. While she acknowledged tax reform was needed, she said wanted a legislative committee working on school finance to complete its work before suggesting any overhauls.

Greg Lopez, the former mayor of Parker and a small business owner, was the only GOP candidate who said he would take on the state’s complicated tax laws. If elected, he promised to establish a committee to send a reform proposal to voters.

Robinson and Brauchler acknowledged that schools were in a funding crunch. But they stopped short of saying they’d send more money to schools.

Mitchell said “he wasn’t sure” if there was a funding crisis, but added, “The system should be reformed before it’s fully funded.”

PERA, the state’s employee retirement program, could play a prominent issue in the election — especially for Republicans.

Earlier at the conference, school board members received a briefing on a proposed overhaul to the state’s retirement program, which includes school district employees.

While the situation is not as dire as it was a decade ago, the program’s governing board has become so increasingly worried about unfunded liabilities that it’s asking state lawmakers to pass a reform package to provide more financial stability.

Two Republicans, Brauchler and Steve Barlock, who co-chaired President Trump’s campaign in Colorado, said PERA was in crisis. Barlock warned school board members that their budgets were in jeopardy as lawmakers fiddle with the system.

Neither went into any detail about how they hoped to see the retirement program made more fiscally stable. But watch for this issue to gain greater traction on the campaign trail, especially as Republican state Treasurer Walker Stapleton ramps up his gubernatorial campaign, and as lawmakers begin to wrestle with PERA reforms next year. (Stapleton did not attend the forum.)

Some candidates offered careful responses to a question about school choice. Others, not so much.

Every Democrat and one Republican, Brauchler, said they respected a family’s right to choose the best school for their children. But that choice, they said, should not come at the expense of traditional, district-run schools.

“I’m concerned that we’d build a system where the success of some schools is coming at the expense of other schools,” Kennedy said.

Republicans strongly supported charter schools, and in some cases, vouchers that use taxpayer dollars to pay for private schools. Robinson called on creating new ways to authorize charter schools. Mitchell said he wanted to repeal a provision in the state’s constitution that has been used to rebuff private school vouchers.

There’s no party line over rural schools.

Republicans and Democrats alike said the state needed to step up to help its rural schools, which are typically underfunded compared to schools along the Front Range. They need more teachers, better infrastructure and fewer regulations, the candidates said.

“We need to get rural areas into the modern age,” Robinson said.