A bill that would have extended a big financial lifeline to rural schools is being overhauled, with less money earmarked for rural districts and more for schools statewide.

The reworked bill, the result of a hard-fought compromise, would send more than $60 million to schools by raising taxes on recreational marijuana. But just as the plan was being unveiled Monday, word came down it was being put on hold over a separate but related issue — a proposed change in the state’s health insurance plan for the poor and elderly.

How money should be divvied up among the state’s schools is also a sticking point as lawmakers attempt to finalize a deal that would shake up the state’s budget for years to come.

State Sen. Jerry Sonnenberg, a Sterling Republican, announced Monday morning that leaders from both chambers had reached a compromise. Part of the package would send $10 million directly to rural schools each of the next three years. Another part would provide $11 million a year for the next three years to the State Education Fund, a state savings account for all public schools that lawmakers use for a variety of purposes including general funding.

But moments after sharing details with reporters, Sonnenberg was handed a note from his aide saying the deal on Senate Bill 267 was on hold. Based on a copy of the note he shared with reporters later, it appeared school funding was an area of concern that still needed to be resolved.

But Democrats later said school funding was not at issue.


Since Sonnenberg introduced his bill in April, funding for the state’s many cash-strapped rural schools has been a point of contention. Originally, the bill would have sent $400 million to rural schools by diverting money from highways.

But House Democrats objected to leaving the state’s urban schools, many with their own financial hardships, out of it.

As part of the new deal that was reached last week, the state would raise money for schools by increasing taxes on recreational marijuana to 15 percent, the maximum allowed.

“A lot of people have said that they want to see marijuana money going into schools,” said House Majority Leader K.C. Becker, a Boulder Democrat.

News of the deal surprised several Capitol observers and spread quickly. Among the first to react was the Colorado Rural School Alliance, which told lawmakers to keep their money.

Michelle Murphy, executive director of the Rural School Alliance, said $10 million a year would do little to help solve the problems her schools face.

“We’d rather see the money sent to the State Education Fund,” she said. “That money just won’t have an impact locally.”

Sonnenberg said he isn’t prepared to take the money for rurals schools off the table.

“I can’t believe rural schools wouldn’t take 10 million,” he said. “It’s 80 bucks a kid. Don’t tell me that won’t make a difference.”

Using 2017 figures, the actual amount would be closer to $75 per student.

Murphy said she was thankful for Sonnenberg’s and others’ leadership but said she worried lawmakers would get the impression that the money would solve all of the problems rural schools face.

“We don’t want to give policymakers the misguided impression that $10 million would relieve the pressure on rural schools,” she said.

Even if leaders in both parties can work through their differences, the bill is still a long shot.

Among the most contentious issues in the bill is a change in how the state collects a fee on hospital patients that helps pay for the state’s insurance program for the poor. Removing the fee from the state’s general fund, has long been a sticking point for Republicans.

And lawmakers have little time to complete their work. The legislature must adjourn by May 10.

Here’s are more the details on the deal that Sonneberg announced Monday.