Funding 101

Updated on Mon, 01/23/2017 - 10:23am

Making sense of state and district funding challenges

Superintendent Gdowski on Funding Challenges

Throughout Adams 12 Five Star Schools, we strive to engage and inspire students at every level. From teachers to nurses and accountants to bus drivers, we work together to prepare students to thrive in our rapidly changing world. But limited funding challenges our potential and hinders our mission. It doesn’t have to be this way. With your support, we can make K-12 education — and our children — a priority in Colorado and continue to provide high-quality instruction in every classroom, every day.

How Does Adams 12 Five Star Schools Receive Money?

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Our general operating budget is funded mostly from state and local tax revenue and a little from federal and other sources.

State Revenue

State and local revenue work off of the School Finance Act. Started in 1994, the formula determines how tax revenue is distributed equitably across the state, weighing characteristics and factors of each district to determine funding per pupil.

State revenue was intended to fill in where local funds came up short. In the 1980s, state revenue was only one-third of our budget. Currently, it is nearly two-thirds. At this ratio, any cuts or lack of increases from the State take a major toll on our school funding. 

Local Property Taxes

We receive tax revenue from the properties within our district boundaries, which adds to the state School Finance Act. Compared to other school districts, the assessed value of the entire district, divided by the number of students in the district, is much lower due to lower overall home values and fewer businesses. This results in less revenue for our district and more funding we have to come up with through locally-approved overrides. 

*Assessed Valuation by District is shown as a per-pupil figure. This amount is calculated by taking the assessed value (determined by the county assessor) of all property located within a district's boundaries (e.g. residential, commercial, agricultural, oil, and gas) and dividing it by the number of students in the district. When compared to other districts, we have one of the lowest values in the region. The per-pupil number is not the amount of money we receive per student.   

Locally-Approved Bonds and Overrides

Bonds can only be used for capital expenditures, including major repairs, renovations, additions to schools and new schools. Bonds are not included in the district general fund and cannot be used for operating costs such as salaries and benefits.

Overrides are additions to the general fund and used for operating expenses such as salaries and benefits, instructional programs, and classroom technology.

Colorado allows districts to ask voters to approve additional funding. Due to lower tax revenue, we have to ask for more bonds and overrides to make up the difference than other districts such as Boulder Valley or St. Vrain Valley. And yet, Boulder Valley still has over twice as much Override revenue than we do.

*Even though we have lower tax revenue, we also have not approved as many bonds or overrdies in the past as other districts.    

How Do We Spend Our Money?

So What's The Problem?

In 1980, Colorado’s funding per student was $480 above the national average. By 2012, it was $2,900 below the national average. In 2015-16, Adams 12 received $7,147 per pupil, which is lower than the average district in Colorado receives at $7,311. Colorado is lower than the national average and the Five Star District is lower than the Colorado average. 

Several Legislative acts led to decreasing State funding over the years: Timeline of Decreasing State Funds


    • Enacted in 1992, the Taxpayers Bill of Rights (TABOR) sets limits on amount of revenue that can be collected by the State and local governments at growth plus inflation. If revenue is higher, law requires refunds to taxpayers. The law also imposes a limit on property taxes and requires a vote to increase taxes. This law has limited the amount of money that can go to education, even in a booming economy.

  • Amendment 23

    • Enacted in 2000, Amendment 23 requires the state to increase yearly funding for education by establishing a mininum increase in the amount of per-pupil funding given to districts by at least the rate of inflation. Also created the State Education Fund with the goal of catching K-12 funding up to where we were in the ‘80s. 

  • Negative Factor

    • Since the State has struggled to keep up with the education funding formula and promises made in Amendment 23, legislators decided that only certain parts of the School Finance Act needed to grow by inflation. This allowed legislators to balance the state budget by adding a “negative” factor to the other factors built into the School Finance Act. This subtracted money intended for education and reduced revenue for all Colorado districts. Each year the size of the negative factor changes depending on the state budget but average is 13% for districts and between $850-920 million each year for all Colorado districts. In the years since its inception in 2009, Adams 12 Five Star schools has been cut over $250 million, including $40 million this year alone. 

Digging a Little Further

What This Means for Us

The negative factor has resulted in a $40 million shortage for our district this year alone - over $250 million since its inception in 2009. The likely passing of only a 1% state funding increase (the normal is over 2%) means we will not have enough money to cover the rising costs of inflation, insurance, PERA, salaries and everything other than gas. So while the State is not cutting K-12, we are getting a lower increase than normal which will not cover our normal rising costs. This may result in having to cut $10-15 million in our operating budget, even though the State economy is improving.

Adams 12 Five Star Schools has not passed a Bond since 2004 (12 years ago) and an Override since 2008 so the ability to supplement funding shortfalls has been a difficult path. If state and local funding continues to decline for K-12 education in Colorado, the Five Star District may have to make further sacrifices by considering split schedules or boundary changes to address overcrowding; minimizing instructional time due to aging buildings and facility repairs; and decreasing educational innovation and programming through curriculum funding cuts or salary freezes for teachers.

Limited funding challenges the district’s potential and hinders the Five Star mission, but it doesn’t have to be this way. With your support, we can make K-12 education — and our children — a priority in Colorado and continue to provide high-quality instruction in every classroom, every day.