Governor Jared Polis’ budget would delay the implementation of Colorado’s new school funding formula

This story was originally published by Chalkbeat. Sign up for their newsletters at ckbe.at/newsletters.

By Jason Gonzales, Chalkbeat

Colorado school districts would no longer be funded based on a four-year enrollment average under a 2025-2026 budget proposal released Friday by Gov. Jared Polis.

Instead, Polis proposes funding school districts based on an enrollment estimate for the current year, a change that could mean less money for districts with declining enrollment, like Denver.

At the same time, the governor’s proposal would phase in a new school funding formula over the course of seven years, instead of six years. The school funding formula, which was approved last year, determines how much state money each district gets per student. The new formula is expected to help districts serving students with more needs, as well as in rural parts of the state.

Both of Polis’ budget proposals are intended to save the state money.

Polis said the changes would help balance the budget in the long run and ensure the state doesn’t return to withholding funding from schools for other priorities — a maneuver called the budget stabilization factor. In the short term, it also helps free up money during a year when state lawmakers must close a $640 million budget gap.

“We are tightening our belts, cutting agencies and making cuts where we can,” Polis said, “and then making sure we can fund our schools.”

In total, Polis has proposed a budget of $46.1 billion, a 10% increase over last year. His budget includes a $115 million increase over this year’s $9.8 billion K-12 budget, which would increase per-pupil funding to an average of $11,747. His budget does not take into account the ballot measures that will be voted on next week.

Colorado’s budget process requires Polis to present a budget by November 1 each year. The powerful six-member Joint Budget Committee, which writes the budget and has the most authority over spending, will begin drafting a proposal to be released in March or April.

Colorado has a constitutional mandate to increase school funding at the rate of population growth plus inflation.

Funding school districts based on a four-year enrollment average protects them from a single-year enrollment drop, which would sharply reduce state funding. But it also puts the state in a bind for students who may no longer attend that district.

Polis’ proposal would not change if schools received funding for a year. The funding is based on an estimate made in July. If the official number of students in October is lower or higher, the state will make budgetary adjustments. Under the proposal, those adjustments could be steeper if districts experience enrollment fluctuations from year to year.

Colorado Budget Director Mark Ferrandino said districts should make budget decisions much earlier if enrollment declines.

“That will have the biggest impact,” Ferrandino said.

Polis also emphasized that no other state calculates student populations for its budget based on a four-year average.

“Basically, districts are going to have to adapt to enrollment numbers a little quicker than before, especially districts that are going through changes and major changes,” he said. He added that “they can do that because they do it in 41 other states.”

The slower implementation of the formula change will also have consequences for the neighborhoods.

Last year, education advocates and many district leaders pushed for an overhaul of a 30-year-old formula that is expected to give less attention to an area’s cost of living and more money to districts that serve higher numbers of students in poverty and English learners. . Small and rural districts would also benefit.

Yet it is also a costly undertaking, which will require an additional $500 million in education funding.

Under the six-year plan, this year’s budget would have needed about 18% of the $500 million needed to phase in the formula.

Polis’ budget would spend about 10% of the $500 million in the 2025-2026 year. The state would then spend 20% the following year under his proposal. Then the state would switch back and forth annually until the formula is fully implemented.

“There’s a lot of excitement on both sides of the aisle about the new school funding and student funding where it is today,” he said, “and we just have to make sure we can do this in a sustainable way.”

In a news release, Colorado Springs Republican Rose Pugliese, a Republican Minority Leader in the House of Representatives, said she appreciates the governor’s desire to prevent defunding from schools, but that the financial reforms are not will happen soon enough.

“Colorado families cannot wait seven years for an updated formula to be rolled out – our students deserve real support now,” she said.

Also included in Polis’ budget for 2025-2026:

• A cap on the BEST program, which provides capital funds for schools. The cap is a cost-saving measure that takes money out of the program to spend on funding schools and would generate about $60 million to $80 million for the State Public School Fund.
• A $13.5 million increase in categorical school funding, or money intended to help specific groups of students, such as English learners or students with special needs.
• $2 million to support students at the state’s lowest-rated schools, known as turnaround and priority improvement schools. The ratings are largely based on students’ test scores.
• A $12.1 million increase for college and university budgets and student financial aid. The money would only slightly increase state funding above $1.6 billion this year. His government has also proposed a 2.3% increase in tuition fees in the state.
• $11.7 million for Colorado’s Child Care Subsidy, or CCCAP, to make child care more affordable and increase provider rates.
• An additional $7.8 million for the third year of the state’s Universal Preschool program.
• $3.6 million to support early intervention efforts designed to help children under age 2 with developmental delays.

Jason Gonzales is a reporter covering higher education and the Colorado Legislature. Chalkbeat Colorado partners with Open Campus on higher education coverage. Contact Jason at (email protected).