Bipartisan group of lawmakers wants to change Colorado’s school funding formula after 30 years

A bipartisan group of Colorado lawmakers is trying to change the way Colorado funds its schools by increasing funding for students with greater learning needs, including students living in poverty, those learning English and students with disabilities.

The shift, proposed in legislation introduced Thursday afternoon, marks momentum in redesigning how the state distributes dollars to public schools after about 30 years of using the same formula. Lawmakers say the changes are long overdue.

“This is a day that I would describe as one filled with hope for the students of Colorado, for a new formula,” Senate Minority Leader Paul Lundeen, a Monument Republican who is one of the main sponsors of the bill, said during a news conference Thursday afternoon. “For too long, the formula has been focused on institutions and not about the unique natures of the students who show up on the doorsteps of our schools and whom we seek to serve.”

The bill also comes as school districts have been eagerly awaiting a legislative proposal detailing how their share of state funding could change in the future. A separate piece of legislation already making its way through the Capitol will likely hold steady the state’s school funding formula for the next school year. 

Changes offered in House Bill 1448 would take effect beginning the 2025-26 school year, with the state devoting close to another $500 million to K-12 public schools and charter schools. That funding would come from a mixture of resources, including the state’s general fund, the state’s K-12 education fund — which currently sits at a record $1.5 billion — and increased local revenues through a mechanism known as mill levy equalization, which has added to the amount of local tax dollars communities pump into their public education systems.

Slow student enrollment growth is also helping cushion state education funding, which Colorado largely doles out to school districts based on the number of students enrolled in their schools.

Under the bill — whose other main sponsors are House Speaker Julie McCluskie, a Dillon Democrat, Rep. Jennifer Bacon, a Denver Democrat, and Sen. Rachel Zenzinger, an Arvada Democrat — the additional funding would be phased in over six years. 

Each year, the state would add about $83 million to K-12 education funding until the new formula would be fully implemented, according to McCluskie, who has been speaking with school districts and advocates about possible changes to the funding formula throughout the legislative session. The proposed formula would continue following Amendment 23, which requires the state to increase base student funding at the level of inflation each year.

The formula would also allow most of Colorado’s 178 school districts to continue receiving more state funding than what they would receive during the 2024-25 school year. Some districts would stand to gain significantly more funding, including East Grand School District, which lawmakers said would see a 27.6% funding increase once the formula once fully implemented. That equates to a funding hike of more than $3,450 more per student.

Current projections show that six districts would receive the same amount of funding under the new formula as they have received under the existing formula. They are Edison School District 54-JT in Yoder; Creede School District; Ouray School District R-1; Aspen School District; Telluride School District R-1; and Liberty School District J-4 in Joes. 

“I am continuing to work because I’d love for every district to be gaining (funding) in the new model,” McCluskie said.

The proposed changes are largely based on recommendations a task force made this year after its 17 members explored how to better fund Colorado education. The changes were also informed by a school finance modeling tool created by an outside consultant hired by the state a few years ago to assess the current formula and project impacts from potential changes, McCluskie said.

The bill targets a goal of making education funding more equitable so that schools have more funding to educate students with significant learning needs. Whether the state is adequately funding its schools is another question — one that will be fully answered early next year, when the results of two adequacy studies are released.

Colorado is funding its schools to the level required by the state constitution for the first time since the Great Recession, though the increased funding still won’t necessarily give schools all the money they need to effectively serve students.

Meanwhile, lawmakers like McCluskie see an urgent need to begin deciding upon changes to the formula this legislative session, after three decades of inertia.

“I’m fairly passionate about the years we have waited to make this formula more equitable,” she said during the news conference. “I will be the first one in line to figure out what we need to do next to drive more dollars to our public schools.”

“I do not want to see us wait another day to address the equity that is lacking in our current approach,” McCluskie added. “So while I hear the call for more funding for public schools and I’m a champion of that as well, it is time we put equity first.”

Part of equitably funding schools under the bill would also mean segmenting more money for rural school districts and small school districts, which McCluskie said “have been deeply underfunded for years.”

Similar to the school finance legislation introduced earlier in the legislative session, House Bill 1448 would build into the formula a factor that would increase funding for rural school districts and smaller districts, instead of one-time funding the state has historically used to route more money their way.