Dust settles on the money fight

Something for almost everyone in legislative funding decisions

When Colorado lawmakers boast about what they did for education funding in the 2014 session, they aren’t just blowing political hot air.

The 2014-15 school finance package, plus spending included in other bills, comes to just over $479 million for K-12 education. (Throw in the $100 million in higher education funding growth and you’re talking about real money.)

And the big fight over whether to add money to basic school funding or funnel it to special programs ended with about 73 percent of the cash going to district operations.

That debate was unusually tense at times during the legislature’s five-month run, but Gov. John Hickenlooper, key lawmakers, superintendents and lobbyists were all smiles at a recent signing ceremony for two key finance bills (see story).

“We did unprecedented work in funding education,” Senate Majority Leader Rollie Heath, D-Boulder, told reporters during an end-of-session briefing.

But the good feelings may not last for long.

Even though legislative action trimmed the $1 billion-plus K-12 budget shortfall, that gap still stands at $894.3 million. Created by a legislative budget-cutting device called the “negative factor,” the shortfall is the difference between what schools actually receive for basic operating costs (known as Total Program Funding) and what they would have been allocated without the negative factor.

Because of that remaining shortfall, education interest groups will continue to press for further reductions in the negative factor. “We have much ground to make up in school funding,” said Kerrie Dallman, president of the Colorado Education Association, after the session adjourned. “We made some good progress this year, but we are nowhere close to making a proper investment in our public schools,”

“The negative factor will continue to be an issue. It’s going to take a number of years to repay,” said Jane Urschel, deputy executive director of the Colorado Association of School Boards.

Gov. John Hickenlooper signs K-12 funding bills with students.
PHOTO: Kayleigh Skinner
Gov. John Hickenlooper signs K-12 funding bills with students.

Political leaders are crossing their figures that the fight won’t be as rough in 2015. “I hope next year won’t be as contentious,” said Dillon Democratic Rep. Millie Hamner, chair of the House Education Committee and a key player to the Student Success Act and the School Finance Act.

“I think it will be a continuing discussion,” said Hickenlooper. “I don’t think it will be a battle every year.”

Whether those hopes are realized remains to be seen, given that a variety of fiscal constraints and demands on the legislature could make it harder to trim the negative factor in the future. One of those is the fact that 2014-15 Total Program Funding increase become part of the K-12 budget base, which has to increase by enrollment and inflation every year.

“It’s going to be a harder fight for a smaller increase every year,” predicts Senate President Morgan Carroll, D-Aurora. “We’re going to hit a natural ceiling.”

Denver Democratic Sen. Mike Johnston agreed, saying, “We’re a year or two away from hitting the structural wall” that will make it tough to trim the negative factor.

Outgoing House Speaker Mark Ferrandino, D-Denver, originally resisted cuts in the negative factor but was on board with the final deal. “I think we ended up in a good place,” he said. “I feel comfortable. I’m very comfortable that we are sustainable over the next two years.”

Inside the big ed spending bills

K12_201415_SpendingChart

In their push to reduce the negative factor, district lobbyists worked hard to defeat bills that earmarked spending on specific education programs. They weren’t totally successful, but Urschel said, “I think we did very well on ‘no new mandates.’”

In contrast to many of the prior six sessions, the 2014 legislature didn’t create any big, brand-new education programs. Much of the targeted funding that was approved this year will go to existing programs that lawmakers and interest groups felt needed more money.

Here’s rundown of that spending, organized thematically with information about who gets the money or who benefits. You can get more detailed information about the bills that authorized the spending in this special Spending Bill Tracker.

Total Program Funding

Basic school support will be $5.93 billion next year, up from $5.52 billion in 2013-14. (The state share is rising $365.2 million, while local district revenues will go up about $40 million.) Next year’s funding will average $7,020, up from $6,652, according to the Department of Education.

Use Chalkbeat Colorado’s interactive database to see your district’s 2014-15 funding, and how much it will change from this year.

Special groups of students

The biggest chunk of targeted additional spending, about $63.5 million, goes to three groups of special students — at-risk preschool and kindergarten students, English language learners and primary-grade students who are behind in reading.

Funding for these programs generally is given to districts on a per-pupil basis for students who meet the criteria for various programs.

Preschool & kindergarten – $17 million in additional funding was allocated to what’s called the Early Childhood At-risk Enhancement program. That allows school districts to use the funding for either preschool or kindergarten slots for children who meet the at-risk definition of the Colorado Preschool Program. The new money adds 5,000 slots, which will mean an estimated 28,360 students will be served. (House Bill 14-1298 – School Finance Act)

English language learners – The legislature updated state law on services for such students and added $27 million in per-pupil funding. A key change in the law makes students eligible for extra funding for up to five years instead of the two years that has been the limit. ELL programs this year received $15.2 million in “categorical funding,” a $268.8 million pot of targeting spending that’s required by Amendment 23. ELL categorical funding rises to $16.7 million next year, in addition to the $27 million. Under one of the many school funding compromises made this session, the $27 million was not added to categorical funding because doing so would have locked that money into the base and given future legislatures no ability to cut the money in bad budget years. (HB 14-1298)

Struggling readers – Districts will receive an additional $18 million, again distributed per the numbers of eligible students, for early literacy interventions mandated by the 2012 READ Act, which requires individual plans and attention for lagging readers in grades K-3. The law was one of the few reform measures in recent years that was reasonably well funded from the start. But the number of students needing help was larger than expected, so the $18 million is in addition to the $15.4 million previously budgeted. (House Bill 14-1292 – Student Success Act)

Who lost out

Both Republican and Democratic lawmakers pushed to increase funding for full-day kindergarten for all students, but those efforts ultimately stalled. (For kindergarten students, the state currently pays districts 58 percent of funding for other students. If districts want to offer full-day kindergarten they have to pay for it themselves – or charge parents. Kindergarten attendance is not compulsory in Colorado.)

There was debate this session about devoting additional funding to at-risk students in general. Some districts argued that extra money for at-risk preschoolers and for English-language learners doesn’t help districts with poor students who don’t fall into those categories. But no one found an affordable compromise on the issue.

Additional funding for special education students really wasn’t on the table this session. Budget increases for such programs was approved in recent sessions.

Other student support

A few bills targeting smaller groups of students managed to survive the 2014 session.

Gifted & talented – A proposal to require screening of all students and hiring of qualified coordinators in all districts was whittled down to $1.9 million and stripped of most of its mandates. The funding is on top of $9.6 million in existing money. (House Bill 14-1102)

Advanced Placement classes – This legislation was relentlessly whittled down as it moved through the process and ended up with $261,561 to provide incentives for rural districts to provide AP classes. The grants are capped at 475 students. (House Bill 14-1118)

Counselors – The Colorado Counselor Corps, which provides additional counselors at schools with at-risk students, got an additional $3 million on top of $5 million in current funding. This bill was one of several that took a haircut. (Senate Bill 14-150)

And still more spending bills

A long list of other measures, and provisions in omnibus spending bills, provided cash for a wide variety of administrative costs, studies, training, school safety and other programs.

At-risk student support

Minority teachers – Lawmakers found $50,000 for the Department of Education to do a study of recruitment and retention of minority teachers. (House Bill 14-1175)

Opportunity gaps – This is a mandate that would provide $144,216 to create a database to track enrollment of different groups of students in core courses, also correlated to test scores. The idea is to uncover tracking of minority students. (House Bill 14-1376)

Turnaround leaders – A program to train leaders for low-performing schools received $2 million in funding. (Senate Bill 14-214)

Charter school facilities

Charter schools, which usually don’t have access to bond issue and other revenues that districts enjoy, often struggle with construction, lease and maintenance costs. Charters will get up to $11.5 million in per-pupil based facilities reimbursements, on top of the current $7 million. Another $6.5 million was added to a fund that backs charter construction loans. (HB 14-1292)

Health & Safety

School meals – Students in grades 3-5 who are eligible for reduced-price meals will get free meals under a bill that primarily will tap federal funds. (House Bill 14-1156). The Breakfast After the Bell program will get an additional $14.3 million in federal funds. (House Bill 14-1336 – Main state budget)

Medical emergencies – High school students will be able to get training in CPR under a $250,000 new grant program. (House Bill 14-1276)

Walking to school – The Safe Routes to School program, which provides education about safe walking and biking to school, will get $700,000 in state funds, partly to cover loss of federal money that the Department of Education has received in the past. (House Bill 14-1301)

Threat reporting – The non-profit Safe2Tell program is being brought into the Department of Law and funded with $318,246 in state money. The program provides a way for young people to anonymously report threats (including suicide), bullying and other dangers. (Senate Bill 14-002)

Marijuana – A bill that details how the state will use marijuana tax revenues includes $2.5 million for a grant program that schools can tap for school nurse training and marijuana education. (Senate Bill 14-215)

Testing

The legislature stepped away from making any changes to the state testing system but did come up with $142,750 to fund work related to a task force study of assessments. (House Bill 14-1202) There’s also $3.8 million in additional funds earmarked for CDE testing costs, and $826,046 more for Spanish language tests. (HB 14-1336)

Administrative Costs & Another Study

What’s included

  • While much of the 2014 debate swirled around use of the state General Fund and the State Education Fund, this story lists bills that tapped other sources of revenue, including federal funds, to give a broader of education funding increases. (Spending for the Building Excellent Schools Today construction program, which receives revenues from state-owned lands, isn’t included.)

Financial transparency – The final big fight over the Student Success Act was about whether to fund a state website that users could search for information about K-12 spending, down to the individual school level. CDE received $3 million to hire a contractor to build such a site, which doesn’t have to launch before July 1, 2017. (HB 14-1292)

Online schools – Among the many studies is one on how to oversee multi-district online schools. A task force will be created to do that, at a cost of $47,659. (House Bill 14-1382)

Small districts – Colorado’s boards of cooperative educational services will get an additional $2 million in state funding, the idea being to give BOCES more resources so that they can help smaller districts with implementation of various new state educational requirements. (HB 14-1298)

CDE increases – The department got several pots of additional money to run various programs, including teacher of the year ($24,800), early childhood administration ($63,607), creation of early childhood student identifiers ($298,000), information technology improvements ($3 million), English language learner programs ($311,682) and college and career readiness programs ($170,845). (HB 14-1298 and HB 14-1336)

CDE also gets a little bit off the top of several bills for administration. For example, state law allows the department to retain up to 3 percent of Counselor Corps funding for its costs – primarily staff – of running the program.

School Finance

IPS board votes to ask taxpayers for $315 million, reject the chamber’s plan

PHOTO: Dylan Peers McCoy

Indianapolis Public Schools officials voted Tuesday to ask taxpayers for $315 million over eight years to help close its budget gap — an amount that’s less than half the district’s initial proposal but is still high enough to draw skepticism from a local business group.

The school board pledged to continue discussions in the next week with the Indy Chamber, which released an alternative proposal last week calling for massive spending cuts and a significantly smaller tax increase. The school board rejected the proposal as unrealistic and instead voted to add a much larger tax measure to the November ballot.

If the school board and the chamber come to a different agreement before the July 24 meeting, the board can change the request for more taxpayer money before it goes to voters. Some board members, however, were dubious that they would be able to find common ground.

“While I appreciate the fact that we want to continue to negotiate, I’m pretty sure that I’m at rock bottom now,” said school board member Kelly Bentley. “That initial proposal by the chamber is, unfortunately in my mind, it’s insulting. It’s insulting to our children, and to our neighborhoods, and to our families.”

Chamber leaders, whose support is considered important to the referendum passing, were skeptical about the dollar amount. In a press release, the group said the district was “taking another step towards seeking a double-digit tax increase.”

“We’re concerned that our numbers are so divergent,” said chamber president and CEO Michael Huber in the statement. “We need to study the assumptions behind the $318 million request; clearly the tax impact is significant and the task of winning voter support will be challenging.”

During the board meeting, which lasted more than two hours, district leaders discussed why schools need more money and why the chamber report is unrealistic. They also took comments from community members who were largely supportive of the tax increase.

Joe Ignatius, who mentors students through 100 Black Men of Indianapolis, said that he has seen the benefits of more funding from referendums in other communities.

“This should be a no brainer, to invest in our future for the students,” Ignatius said. “Don’t think about the immediate impact of the dollars that may come out of your pocket but more the long-term impact.”

If the district goes forward with its plan, and voters approve the tax increase, the school system would get as much as $39.4 million more per year for eight years. A family with a home at the district’s median value — $75,300 — would pay about $3.90 more per month in property taxes. (Since the initial proposal, the district reduced the median home value used in calculations on the advice of a consultant.)

The district plan comes on the heels of months of uncertainty. After the school board abandoned its initial plan to seek nearly $1 billion for operating expenses and construction, district officials spent weeks working with the Indy Chamber to craft a less costly proposal. Last month, the board approved a separate referendum to ask taxpayers for about $52 million for school renovations, particularly school safety features.

But the groups came to different conclusions about how much money the district needs for operating expenses.

The chamber released an analysis last week that called for $477 million in cuts, including eliminating busing for high school students, reducing the number of teachers, closing schools, and cutting central office staff. The recommendation also included a $100 million tax increase to fund 16 percent raises for teachers.

District officials, however, say the cuts proposed by the chamber are too aggressive and cannot be accomplished as quickly as the group wants. The administration and board members spent nearly an hour of the meeting Tuesday discussing the chamber plan, why they believe it’s methodology is wrong, and the devastating consequences they say it would have on schools.

Even if the $315 million plan proposed by the district passes, it will come with some sacrifices compared to the initial plan. Those cuts could include: reduced transportation for magnet schools, field trips, and after school activities; school closings; increased benefits costs for employees; and smaller pay increases for teachers and employees.

The district did not make a specific commitment to how much teacher pay would increase if the amount asked for in the referendum is approved, but Superintendent Lewis Ferebee said the funds would pay for consistent raises.

“We would be at least addressing inflationary increases and cost of living, but we hope that we can be higher than that,” said Ferebee. “It would depend a lot on what we are able to realize in savings.”

The school board’s decision to rebuff the chamber’s recommendation puts the district in a difficult position. The chamber has no official role in determining the amount of the referendum, but it could be a politically powerful ally.

Last week, Al Hubbard, an influential philanthropist and businessman who provided major funding for the chamber analysis, said that if the district seeks more money than the group recommended, he would oppose the referendum.

The total tax increase would vary for each homeowner within district boundaries. The operating increase would raise taxes by up to $0.28 for every $100 of assessed property value, while the construction increase would raise taxes by up to $0.03 per $100 of assessed property value.

On school finance

Facing tax opposition, Indianapolis leaders may settle for less than schools need

PHOTO: Alan Petersime

One day before the Indianapolis Public Schools Board is expected to approve a ballot measure to ask taxpayers for more funding, district officials appealed to a small group of community members for support.

Fewer than 40 people, including district staff, gathered Monday night at the New Era Church to hear from leaders about the need for more school funding. School board members plan to vote Tuesday on whether to ask voters to approve a tax hike to fund operating expenses, such as teacher salaries, in the November election. But just how much money they will seek is unknown.

The crowd at New Era was largely supportive of plans to raise more money for district schools, and at moments people appeared wistful that the district had abandoned an early plan to seek nearly $1 billion over eight years, which one person described as a “dream.”

Martha Malinski, a parent at School 91 and a recent transplant from Minneapolis, said the city appears to have a “lack of investment” in education.

“Is the money that you are asking for enough?” she asked.

Whatever amount the district eventually seeks is likely to be dramatically scaled down from the first proposal. Superintendent Lewis Ferebee has spent more than seven months grappling with the reality that many Indianapolis political leaders and taxpayers don’t have the stomach for the tax increase the district initially sought.

“We are trying to balance what’s too much in terms of tax burden with the need for our students,” said Ferebee, who also raised the possibility that the district might return to taxpayers for more money if the first referendum does not raise enough. “If we don’t invest in our young people now, what are the consequences and what do we have to pay later?”

After withdrawing their initial plan to seek nearly $1 billion over eight years, district officials spent months working with the Indy Chamber to analyze Indianapolis Public Schools finances and find areas to trim in an effort to reduce the potential tax increase. But the district and chamber are at odds over how aggressive the cuts should be.

Last week, the chamber released a voluminous list of cuts the group says could save the school system $477 million over eight years. They include reducing the number of teachers, eliminating busing for high schoolers, and closing schools. The chamber has paired those cuts with a proposal for a referendum to increase school funding by $100 million, which it says could raise teacher salaries by 16 percent.

District officials, however, say the timeline for the cuts proposed by the chamber is not realistic. The analysis mostly includes strategies suggested by the district, said Ferebee. But steps like redistricting and closing schools, for example, can take many months.

“Where we are apart is the pace, the cadence and how aggressive the approach is with realizing those savings,” he said.

Not everyone at the meeting was supportive of the administration. Tim Stark, a teacher from George Washington High School, asked the superintendent not to work with charter high school partners until the district’s traditional high schools are fully enrolled. But Stark said he is still supportive of increasing funding for the district. “It is really important for IPS to get the funds,” he said.

The chamber has no explicit authority over the tax increase but it has the political sway to play an influential role in whether it passes. As a result, Indianapolis Public Schools officials are working to come to an agreement that will get that chamber’s support.

A separate measure to fund building improvements was announced by the district in June and incorporated into the chamber plan. That tax increase would raise $52 million for building improvements, primarily focused on safety. That’s about one-quarter of the initial proposal.