Note: This section deals with the financing of public schools (including charter schools) and for each year may include three types of information: 1) the school finance bill and any other bills that primarily impact school financing; 2) issues related to special state funds set aside for education; and 3) state financial responsibilities related to education (e.g., lawsuits, ballot issues, etc.). Legislation related to state, district or school programs, policies and procedures can be found in the Education section under the major heading of SOCIAL POLICY.
POSITION IN BRIEF:
Support for a state finance system that would equalize opportunity and relieve the property tax.
POSITION: (Adopted 1968, rev. 1985)
Support of a state finance system that would provide sufficient funds for public schools to equalize educational opportunity and relieve the property tax.
A state school finance system should include the following objectives:
- Equity for students, taxpayers and school districts.
- Adequate sources of revenue.
- Support for high-cost programs for students with special needs.
- Local school district control over the use of funds and the raising of revenue over the state determined level.
- Incentives for efficiency and effectiveness, including cooperation among school districts to assure availability of adequate facilities.
- Support for some state participation in the funding of Capital Reserve Funds of local school districts with special needs or unusual situations.
Since the passage of Amendment 23 in 2000, the yearly school finance bill establishes the increase in basic per pupil funding AND includes “new” funding proposals such as new programs, increased or decreased funding for existing programs, deleting programs – all constitute amendments to existing state statute. In most years, there are so many new proposals, with League supporting some and opposing others, that the Legislative Action Committee (LAC) takes a Watch position on the school finance bill. Instead of following all new proposals through the legislative process, LAC focuses on those which relate to LWVCO positions, especially very strong support or oppose positions, for School Finance or Education. In some cases, positions for other areas such as Income Assistance or Juvenile Justice contribute to a focus on a given proposal in the school finance bill.
The LWVCO has concentrated on school finance since 1968, supporting the School Finance Act of 1973 and amendments to that law which increased funding equity for districts. LWVCO has also supported funding for disadvantaged students and for districts with rapidly rising and falling enrollments.
In the early 1980s, it became clear that the 1973 School Finance Act was beyond reform and that a new system was needed. From 1983 to 1985, the LWVCO studied and came to consensus on school finance. At the same time, League initiated a broad-based coalition, including educational, civic, business and agricultural organizations, to conduct an in-depth study of the issue. The Coalition to Improve School Finance developed and published a series of recommendations and also sponsored a bill that contained our recommendations. It failed.
However, pressure was building to accomplish a complete overhaul of the school finance system and to address the inequities which had increased since 1973. This was achieved with the School Finance Act of 1988, probably the single most important bill of the session. LWVCO supported this plan, designed to be phased in over a three-year period, to provide a more uniform system of funding K-12 education for Colorado.
In fact, the 1988 act was never fully phased in, and for some years, the chief demand of the pro-education community was “full-funding” of the school finance law.
With the adoption in 1992 of the Bird-Arveschoug 6% limit on state spending and the voter-approved Taxpayer Bill of Rights (TABOR) amendment to the state constitution, which limited state and local taxation and spending, funding for public schools became even more difficult. (See Fiscal Policy section.)
The General Assembly subsequently adopted the Public School Finance Act of 1994, which is the current state school finance structure, although it has been modified each year. The 1994 Act provided a formula for distribution of state and local school finance dollars which can be adjusted to meet the amount to be appropriated. Total funding to a local school district (state and local dollars) is on a per pupil basis adjusted for such factors as local cost of living, size of school district and number of at-risk pupils.
As a result of the TABOR amendment, local dollars for schools have generally remained at a stable level since mill levies cannot be increased without a citizen vote, and increased dollars have come mostly from state appropriations. The result is that the state by 1999 provided a substantially increased share of school finance money, from 43% in 1988 to 57% in 1999.
State school funding has not kept up with the shift from local to state dollars and steady, substantial increases in student population, and the funding of schools has fallen well behind inflation. As a result, Colorado’s per pupil funding, formerly well up in the top half of states, dropped to the lower part of the bottom half of states.
By far the most significant development in many years in funding Colorado’s schools occurred in the 2000 general election when Colorado voters approved the citizen-initiated Amendment 23, supported by LWVCO. Designed to give Colorado schools a major financial shot in the arm, this amendment to the Colorado Constitution addressed the failure to match growth in inflation by mandating future per pupil expenditures to increase by the rate of inflation plus one percent for the next ten years, and by the rate of inflation thereafter. The amendment also earmarked 0.33% of state income tax money to go to a newly created State Education Fund which is exempt from the 6% and TABOR limits. This money is available to aid in funding the school finance act and also for new programs. Legislation was adopted in the 2001 session to implement Amendment 23 and to provide the initial utilization of State Education Fund moneys.
The School Finance Act for 2004 reduced the anticipated funding for schools by nearly $39M. Funding related to additional factors (e.g., cost of living, number of at-risk students, etc.) was cut by $21M. Sponsors made this reduction based on the interpretation that Amendment 23 applied only to the basic funding allotment and not to additional factors. The remaining $18M reduction was achieved by repealing the school district property tax revenue limit, allowing school districts to make adjustments in how local school district mill levies were calculated.
The 2005 legislative session was more supportive of public education and tried to resolve some of the problems created by legislation passed in the prior year. The School Finance Act included several positive features: English language learners were added to the definition of at-risk students, more positions were funded for the Colorado Preschool Program and some funding was restored for schools labeled “unsatisfactory” under the Colorado Student Assessment Program (CSAP).
Two program areas (Special Education and Preschool) where LWVCO has strong support positions received increased funding in 2006. Important improvements for Special Education used Referendum C money to increase the 2005-06 budget by $20M and provide assistance for high-cost students with severe or multiple disabilities. The Colorado Preschool Program Act was renamed Colorado Preschool and Kindergarten Act to allow at-risk children not ready for kindergarten to be eligible for full-day kindergarten funding. The goal of adding 6,000 preschool positions had to be scaled back to 2,000 in 2006-07, with 2,000 to be added in each of the next two years.
Additional financial issues dealt with in the 2006 legislature: set how to handle costs related to educating juveniles in a detention facility; provided grants ($1M) for intensive summer school programs for pupils entering grades 4-8 who scored Unsatisfactory on prior CSAP; restored $500,000 for School Breakfast program for students from low-income families; settled on $7.8M for capital construction for Charter Schools.
The State Education Fund created by Amendment 23 had been depleted as a result of the recession early in this decade, thus it was not available to help with 2007 financial decisions. In 2007 the Governor proposed freezing decreases in local property taxes as a way to allow school districts to cover a greater portion of their education programs, thus requiring less in state funds. This proposal was quite controversial both from a constitutional perspective (i.e., would a freeze on decreases be prohibited by TABOR) and from a political/legislative perspective (i.e., promises made to citizens in conjunction with passage of Referendum C required available funds be stretched to cover Higher Education and Health Care). The final act included the statement that for 2007 and thereafter the mill levy/property tax revenue would be at least equivalent to the preceding year. Those districts which had not obtained voter approval to retain and spend revenues in excess of TABOR limitations would still operate under those restrictions.
Other issues in the 2007 School Finance Act: increased maximum size of preschool classes from 15 to 16; added 2,000 preschool positions for 2007-08; specified formula for calculating at-risk per pupil funding for charter schools; and required each school district to file an annual budget with the Colorado Department of Education (CDE) including specified information in a standard format.
In 2008 the School Finance bill finally passed on the last day of the session. Per pupil allotment ($5,250) increased by 3.6% (more than the 3.2% required by Amendment 23). Another $2M was set aside for high-cost special education students, upholding a 2006 commitment to provide more assistance in this area. Funding full-day kindergarten for at-risk students was added as part of K-12 funding (gradual increments from $40M in 2008-09 to $100M in 2013-14); districts were encouraged to give priority to enrolling homeless children. Kindergarten was removed from the Colorado Preschool and Kindergarten Program (name changed back to CPP), prior kindergarten positions shifted to preschool and 2,300 new positions were added to CPP. These decisions meant that, in 2008-09, every eligible at-risk 4-year-old could attend state funded preschool. LWVCO supported the above proposals.
In contrast to school finance, there was very high agreement on a capital construction bill passed in 2008. More than 80% in both Houses approved HB 1335 Building Excellent Schools Today (BEST). A Public School Capital Construction Assistance Fund, including an emergency reserve fund, was established by consolidating several sources of revenue. LWVCO strongly supported this new approach to resolve the backlog of schools in need of major repair or replacement. It was especially important that it resolved the 2006 Giardino v. CO lawsuit, requiring CO to provide assistance to school districts without financial resources to repair or replace unsafe or obsolete buildings. Colorado was behind in making appropriate yearly payments.
Early in 2009, three bills combined to reduce funding for 2008-09 by $29M, with the largest portion coming from decreasing the per pupil allotment by almost $20M. March revenue projections were lower than predicted leading to a more spartan bill than originally introduced. Funding for operation of full-day kindergarten was maintained – a provision that LWVCO had supported. The cap on the amount of additional property tax districts can levy was increased from 20% to 25% of their total program. Basic per pupil allotment increased to $5,507, but school districts and charter schools were asked to hold a portion of their allocation in reserve.
2010 was a year of unprecedented constraints on the state budget. In January, the state rescinded $110M of the funds allocated for the 2009-10 school year. In March, following even lower revenue predictions, the 2010 School Finance bill cut K-12 funding. Amendment 23 was interpreted as applying only to categorical programs and to setting the base per pupil allocation, but not including the additional factors that adjust the allocation for each district, such as cost of living, number of at-risk students, etc. Basic per pupil allotment increased to $5,529, but the bottom line was a major reduction in K-12 funding for 2010-11. For the first time, LWVCO opposed the School Finance bill.
LWVCO reluctantly supported the 2011 School Finance bill which reduced funding by $227.5M from the previous year. The basic per pupil allotment was $5,634 and no new expenditures were approved.
After years of decline, the School Finance Act of 2012 held steady, maintaining per pupil funding at $6,474. An additional $57M to the budget took care of increasing student population so that more cuts were avoided. The act also increased the funding for charter school capital construction from $1M to $6M a year, provided $1.3M in assistance to small school districts to meet state mandates, and added $480,000 for the school counselor corps program.
Improved revenues in 2013 allowed increased funding for schools, though with the caution that this might be a one-time event. Per pupil funding was increased $173 to $6,647. In addition, League monitored or supported the following changes relevant to our positions: increasing the number of slots in the Colorado Preschool Program, giving districts flexibility to use the slots to offer full day kindergarten or preschool; financing supplemental at-risk aid for charter schools, school districts, and Charter School Institute schools; increasing the special education (Tier B) appropriation by $20M; increasing the capital construction yearly funding for charter schools from $6 to $7M.
In 2005 a lawsuit was filed challenging the constitutionality of the state’s school finance system (Lobato v. CO). A May 2013 ruling from the Colorado Supreme Court found that the funding process met the definition of “thorough and uniform,” effectively removing the courts from the discussion of school finance in Colorado.
In 2013 LWVCO supported SB213, the Future School Finance Act, an overhaul of the 1994 school finance act. It passed, but would only go into effect if a ballot issue passed in the fall of 2013 to increase taxes by about $1B per year to fund it. The ballot issue failed.
Two bills supported by League passed in the 2014 session which together increased base per pupil funding to $6121 and increased funding for the READ Act, the Charter School Capital Construction fund, early childhood at-risk funding, the English Language Learners program, and the Board of Cooperative Educational Services.
The 2015 school finance act was limited by TABOR factors. It increased the per pupil funding base to $6292, ruled that state funding will not be reduced even if property tax values go up, and drew $5 million annually from the State Public School Fund to be distributed to districts for at-risk students on a per-capita basis.