Understanding school finance in Colorado isn’t easy. It can hurt your brain. But we promise this short Q-and-A will help you understand why school leaders, teachers and some families are protesting.
An estimated 2,000 teachers are expected to show up at a Thursday rally hosted by the Colorado Education Association, the state’s largest teacher’s union. Several school districts have announced they are closing that day because too many teachers will be out on a personal day to participate in the rally.
Boulder, Summit County and Adams 12 are closing on Thursday. Denver Public Schools released a list of schools that will remain open. None of the comprehensive high schools are open though charter school high schools are. Many big districts like Jefferson County, Douglas County, Cherry Creek, Poudre, 27J and St. Vrain are on spring break so it’s unclear how many teachers from those districts are participating.
The main reason they’re protesting is schools may be facing cuts. Why are schools facing cuts?
Colorado’s state lawmakers have to cut more than a billion dollars to balance the budget. There are several reasons: slowing economic growth, rising Medicaid costs, and restrictions on the amount of revenue Colorado can raise and spend because of TABOR, or the Taxpayer Bill Of Rights.
Gov. Jared Polis has proposed reducing state spending, cutting Medicaid provider payments, hiring freezes and other belt-tightening. He also proposed changing the way the state determines funding for schools.
How does changing the way the state determines funding lead to a cut?
Polis proposed shifting from paying schools based on a rolling five-year average student count to a single-year student count in order to pay for increases driven by a new school funding formula. That means funding schools based on current enrollment rather than “empty chairs,” as Polis described it in his State of the State speech.
Schools see that as a $150 million cut they weren’t expecting. The governor has a different take. He doesn’t see the change in how students are counted as a cut. His office points out that his proposal increases funding by $138 million to schools including an additional $98 million to implement the new school finance formula.
“Representations that the governor is proposing a cut are just inaccurate,” said a spokesperson. “Under the governor’s proposal, per-pupil funding increases by $388 on average per student. The governor would oppose cuts to education.”
That sounds logical, though, to pay for actual students. Why did school leaders protest the change?
Most of the country relies on a single-count method. But in Colorado, which is already underfunded (see below), rolling averages have allowed school districts to adjust to the shocks of declining enrollment. For some, the proposal amounts to cutting more than 30 percent of their budget in a single year. The Adams 12 district said it would result in a $13 million cut, which equals losing 130 teachers and means larger class sizes. Here’s what that means for each school district.
School leaders also accused Polis of reneging on a deal cut last year to back a new school finance formula (rolled out over six years would net schools $500 million more a year in funding) if they could have three more years of average enrollment. Without the protections in that deal, Mesa Valley District 51 for example, would face a $9 million cut. But then the whole state revenue picture changed, and the governor introduced an immediate switch to a single-year count to save money.
Are there other reasons schools are upset?
The proposed cut comes less than a year after Polis and lawmakers celebrated ending a yearly budget shortfall to schools known as the “budget stabilization factor.” They declared Colorado schools would now be fully funded. For 14 years, the financial mechanism allowed the state to withhold millions of dollars from schools each year so it could balance the state budget.
How much did schools lose over that time period?
About $10 billion. That is money schools will never get back. Think of it like ending the practice of a yearly debt to schools except the actual debt was never paid off. Over that time, programs were cut, salary freezes were implemented, and students did without certain classes and programs. Educators say the state “balanced its budget on the backs of students” for nearly 15 years, and now it’s someone else’s turn. They add that eliminating the budget stabilization factor really just puts Colorado at 1989 inflation-adjusted spending levels now.
Are there other reasons school leaders and teachers are upset?
Schools say voter-approved programs like the free school meal program and the universal preschool program, while important, are critically underfunded, leaving districts to pick up the slack. In addition, what the state and federal government receive for special education services also only covers 25 percent of the costs. Districts must cut into their budgets to fund those federally mandated services.
Finally, Colorado schools have been perennially underfunded. Colorado released a first-time study in January showing that it is underfunding K-12 by about $4.1 billion or about $4,600 on average per student.
So, when the proposal to suddenly change the way students are counted — resulting in a $150 million cut — school leaders were angry. They call the technical changes a “backdoor” budget stabilization factor.
The governor disagrees. He sees “enrollment averaging” as an antiquated practice that is only delaying the inevitable.
“We cannot budget our way out of declining enrollment, and enrollment averaging only delays the budgetary consequences of this reality,” his office said in a statement. “Using taxpayer funding for phantom students who aren’t at school needs to end.”
Eliminating enrollment averaging will redirect funds to schools and students who need it most as the new school funding formula rolls out, it said.
Where do things stand now?
House Speaker Julie McCluskie has put forward an alternative plan. Instead of ending rolling averages in one fell swoop, the state would move to a single-year count more gradually in exchange for other concessions from schools. It would implement 10 percent of the new funding formula to give schools more money instead of 18 percent. Her plan would mean a $50 million cut to schools instead of losing $150 million through the governor’s change in counting proposal.
What does a $50 million cut mean?
McCluskie said she’s getting good feedback from school districts on her plan. It would keep all schools at least at this year’s funding level. But when schools are facing inflationary pressures—- on health insurance, utilities and the like — it’s going to mean cuts for some districts. The only place schools can cut is staff. McCluskie also hopes to work on a plan to “smooth” the jolt schools will get as they gradually lose the multi-year count.
This week, the governor’s office, McCluskie, and school districts are trying to hammer out an agreement.
What about the federal landscape? How is that playing into the protest?
Last week the federal government slashed roughly half of 4,000 employees at the federal department of education. Officials say federal money to states will continue to flow but there is much uncertainty about that right now.
Extra credit: What else may be part of a state “deal” for school funding?
State budget committee members have already agreed to a cap on BEST grants, which means less money for school buildings and repairs. There is already a $20 billion backlog in projects.
