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


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)


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.


Colorado schools are getting a major bump in the state’s 2018-19 budget

Students waiting to enter their sixth-grade classroom at Kearney Middle School in Commerce City. (Photo by Craig Walker, The Denver Post)

Colorado’s strong economy has opened the door for state lawmakers to send a major cash infusion to the state’s public schools.

As they finalized the recommended budget for 2018-19, the Joint Budget Committee set aside $150 million, an additional $50 million beyond what Democratic Gov. John Hickenlooper had asked for, to increase funding to schools.

“We believe this is the most significant reduction in what used to be called the negative factor since it was born,” said state Rep. Millie Hamner, the Dillon Democrat who chairs the Joint Budget Committee.

Colorado’s constitution calls for per pupil spending to increase at least by inflation every year, but the state hasn’t been able to meet that obligation since the Great Recession. The amount by which schools get shorted, officially called the budget stabilization factor, is $822 million in 2017-18. Under state law, this number isn’t supposed to get bigger from one year to the next, but in recent years, it hasn’t gotten much smaller either. 

But a booming economy coupled with more capacity in the state budget created by a historic compromise on hospital funding last year means Colorado has a lot more money to spend this year. In their March forecast, legislative economists told lawmakers they have an extra $1.3 billion to spend or save in 2018-19.

The recommended shortfall for next year is now just $672.4 million. That would bring average per-pupil spending above $8,100, compared to $7,662 this year.

Total program spending on K-12 education, after the budget stabilization factor is deducted, should be a little more than $7 billion, with the state picking up about $4.5 billion and the rest coming from local property taxes.

The budget debate this year has featured Republicans pressing for more ongoing money for transportation and Democrats resisting in the interest of spreading more money around to other needs. The positive March forecast reduced much of that tension, as a $500 million allocation for transportation allowed a compromise on roads funding in the Republican-controlled Senate. That compromise still needs the approval of the Democratic-controlled House, but suddenly a lot of things are seeming possible.

“We knew we were going to have more revenue than we’ve ever had to work with,” Hamner said of the status at the beginning of the session. But that presented its own challenges, as so many interest groups and constituencies sought to address long-standing needs.

“The fact that we’ve been able to reach such incredible compromises on transportation and K-12 funding, I think most members will be very pleased with this outcome,” Hamner said. “Where we ended up is a pretty good place.”

The big outstanding issue is proposed reforms to the Public Employees Retirement Association or PERA fund to address unfunded liabilities. A bill that is likely to see significant changes in the House is wending its way through the process. The Joint Budget Committee has set aside $225 million to deal with costs associated with that fix, which has major implications for teachers and school districts budgets.

The Joint Budget Committee has also set aside $30 million for rural schools, $10 million for programs to address teacher shortages, and $7 million for school safety grants.

The budget will be introduced in the House on Monday. Many of the school funding elements will appear in a separate school finance bill.

Going forward, there is a question about how sustainable these higher funding levels will be.

“It does put more pressure on the general fund,” Hamner said. “If we see a downturn in the economy, it’s going to be a challenge.”

What's fair

Colorado’s state-authorized charter schools could get more money next year

Students at The New America School in Thornton during an English class. (Photo by Nic Garcia)

Charter schools authorized at the state level by the Charter School Institute are likely to get more money in the 2018-19 budget year. That’s one year before most other charter schools will see benefits from last year’s charter school funding equity bill.

That bill was a major compromise out of the 2017 session, and it requires school districts to share money from voter-approved tax increases with the charter schools they’ve authorized, starting in 2019-20. The bill also created the mill levy equalization fund to distribute state money to the Charter School Institute’s 41 schools. Because no local school board approved these schools, they wouldn’t otherwise be eligible for revenue from these increases, known as mill levy overrides.

Charter School Institute administrators came calling for their money this year, though, with a request for $5.5 million from the general fund. They arrived at this number by identifying institute schools within the geographic boundaries of districts that already share some extra revenue with their local charters and assuming institute schools got a similar share.

Institute Executive Director Terry Croy Lewis called it a “first step” toward parity that would bring institute and district-authorized charter schools to the same level in advance of the new law going fully into effect in 2019. Lewis said it seemed like a fair approach because the parents at institute-authorized schools often live within the geographic boundary and pay taxes at the same rates as parents whose children go to traditional schools or district-authorized charters.

However, the charter equity bill says that extra money for institute schools has to be distributed on an equal per-pupil basis. The original approach, which created more equity among schools in the same geographic boundary, created more disparities among institute schools in different regions – and the law might not have allowed it.

“I don’t think you can define equity in this conversation because equity cuts a lot of different ways,” said state Sen. Dominick Moreno, a Commerce City Democrat and member of the Joint Budget Committee.

Budget analyst Craig Harper suggested to the Joint Budget Committee that separate legislation might be necessary to allow the distribution proposed by the Charter School Institute, something no lawmakers wanted to see after the bruising fight over the charter school equity bill.

Instead, the Charter School Institute revised its proposal to distribute the money among its schools on a per-pupil basis, regardless of geography and whether the local district already shares money.

What sort of difference does this make?

In the first distribution scenario, Early College of Arvada, located in the Westminster district, would have gotten nothing – because Westminster doesn’t currently share money with its own charters. Under the new proposal, the school would get $131,233 based on its pupil count. Meanwhile, Colorado Early College – Fort Collins, which would have gotten $621,357 because the Poudre district already shares money, would instead get just $374,952

Lingering confusion over the distribution question led JBC members to postpone a decision several times before they voted 4-2 this week to include the $5.5 million request in the 2018-19 budget.

It still has to survive the extended battle over the budget that takes place in the full House and Senate each year.