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Legislature begins overhaul of school financing

March 19, 2013
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DENVER — A complete overhaul of the way Colorado has funded schools for two decades would likely bring more money to all but one El Paso County school district.

But the complicated school finance reform hinges on voters approving an estimated $1 billion in additional taxes — an anticipated November ballot question that has not been introduced.

The extra money would be used to increase funding for early childhood education, special education, extended school days for at-risk schools, gifted and talented programs and teacher performance and evaluation.

Sen. Mike Johnston, D-Denver, said he authored the 174-page bill to ensure that students in Colorado have access to the resources they need regardless of who they are or where they live.

“We know right now that there are students with specific needs in this state that we are failing to meet,” Johnston said.

The new formula still is based on a per-student funding calculation, but it gives added weight or additional funds to districts for students who are poor, have a disability, are learning to speak English or live in rural areas.

Senate Bill 213 also changes how students are counted from a one-day head count in classrooms, to an average enrollment over time.

“We are going to change the student count system so every child in Colorado counts every day,” Johnston said.

While kindergartners now only count for 1/2 of a student in the funding formula, the bill would make them a full-student, expanding full-day kindergarten across the state. And from first graders to seniors in high school, the bill would ensure funding isn’t reduced if students spend time off campus. Schools are now penalized for offering programs at local colleges or career technology, Johnston said.

Johnston said students will be able to “learn more the way that they learn best, whether that means internships, concurrent enrollment, online courses.”

Funding debate

Because the bill won’t go into effect unless voters approve a tax increase to put more state money into schools, the disagreement among districts is who will get the largest share of the new cash.

Brett Ridgeway, chief business officer for Falcon School District 49, said there are clear winners and losers in the finance reform act. Schools with a high number of at-risk students — mainly rural and inner city schools in high poverty areas — will get the largest share of the $1 billion in new taxes.

Affluent schools, often suburban districts, will get a smaller slice of any voter-approved windfall.

Superintendent Mark Hatchell of Academy School District 20 spoke Monday before the Senate Education Committee in support of the bill.

“This is a long overdue rewrite,” Hatchell said, also speaking on behalf of 11 school districts in the Pikes Peak Area School District Alliance. “I do believe it costs more to educate at-risk students.”

Hatchell said the new funding would bring about $16 million to his school district. Estimates from Johnston’s staff show an almost $13 million increase. The difference between the estimates is an amendment requested by the bill’s authors to create a “floor-level” of funding that ensures every school district receives at least the average per-pupil funding of about $7,000.

“We would use these funds to keep class sizes at a place where we could have rigorous course work, individualized and differentiated instruction, close the achievement gaps and hire additional staff,” Hatchell said.

The bill goes a long way in paying for all the requirements added to K-12 education in recent years, said Glenn Gustafson, chief financial officer for Colorado Springs School District 11. Those requirements came packaged with budget cuts for most districts in the state.

“It puts money where we need it most,” he said, highlighting the additional funds specifically for English-language learners and economically disadvantaged students.

Although the fully implemented bill would put about $1 billion into education, that only restores funding levels of four years ago, Gustafson said.

“It doesn’t go far enough in solving our problems in K-12 education,” he said, suggesting that there are some flaws in the bill as presented.

He said it’s a start to fix the problems between what local communities pay to support schools, and what the state pays to support schools.

Johnston said on average the state pays about 70 of all funding for schools, while 30 percent comes from local funds such as property taxes. He said that was reversed 30 years ago.

“What we’d like to do is put the state back on a path to more long term fiscal sustainability to have a more sustainable match between the local share and the state share,” Johnston said.

Currently, state funding is determined from the property tax rate in a school district. The new funding would be based on the revenue generated by that mill rate. Johnston said 46 other states calculate the state share based on the size of the tax base.

“We ought to first determine what the local district’s capacity to pay is based on a combination of median income, poverty and assessed value per pupil, the state share backfills whatever is not met,” he said.

Only one area school district — rural Hanover School District 28 — would likely face an increase in property taxes following the reform.

The district would lose about $352,000 under the new formula, but the bill as written would hold the district harmless for five years, providing state funding to make up the difference. But at some point, that funding would end.

Next year the district would have about 222 students and would receive more per-student in state funding than almost any other district in the county, an estimated $10,682. That would drop to $9,416 under the new formula.

Contact Megan Schrader: 719-286-0644 Twitter @CapitolSchrader

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