Funding 101

Updated on Fri, 05/13/2022 - 11:23am

Making sense of state and district funding challenges

Education funding in Colorado is complicated. Here is an overview guide to help navigate the complexities of funding K-12 education in our state. 

How Does Adams 12 Five Star Schools Receive Money?

Printable PDF:  English |  En Español

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

General Funds

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 Property Valuation*
Fiscal Year 2019-2020

Compared to other school districts, the assessed value of residential and commercial properties in the Five Star District is much lower due to lower overall home values and fewer companies that reside within district boundaries.

Assessed Property Valuation

Locally-Approved Bonds and Overrides

Bonds = Buildings
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 = Operations
, or "Mill Levy 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.

Per Funded Pupil - State School Finance & Local Override
Fiscal Year 2019-2020

Per Pupil Funding

*Even though we have lower tax revenue, we also have not approved as many bonds or overrides as other districts.    

How Do We Spend Our Money?

  • Navigating the Budget (English and Spanish) 
  • Interesting fact: Did you know that Adams 12 Five Star Schools only spends 6.8% of the salaries and benefits budget administrative staff? That makes us the 2nd leanest school district in the front range for administrative spending and tied for 9th leanest district in the state of Colorado (out of 178).  Based on CDE's most recent 2017-18 data.

So What's The Problem?

In 1980, Colorado’s funding per student was $480 above the national average. By 2013, it was $2,100 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. Read a Chalkbeat article about how schools are funded.

Several constitutional amendments and legislative acts have led to decreased state funding over the years:


    • Enacted in 1992, the Taxpayers Bill of Rights (TABOR) sets limits on the 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. 

  • Gallagher Amendment

    • The Gallagher Amendment was an amendment to the Colorado Constitution enacted in 1982 concerning property taxes. Gallagher requires reductions in the residential assessment rate for property tax purposes when increases in home values outpace increases in the value of commercial property. Essentially, it keeps relationships between residential and commercial property tax rates proportional. This triggered the need for the state to backfill education revenue that was previously funded by local property taxes. Funding was once 2/3rds local but is now 2/3rds state.

    • Read more about how the Gallagher Amendment works.  

  • Marijuana Money

    • School districts do not get a percentage of marijuana sales tax to contribute to district operational costs. Of the tax revenue collected, $40 million is set aside into a statewide grant fund, the BEST program, to be used only for building construction. All 178 school districts in Colorado must apply for funding, with awards typically going to lower-funded or rural districts. 

    • Read our marijuana funding page for more information. 

Digging a Little Further


The Adams 12 Five Star Schools Board of Education adopts the budget each year. Learn more about the district's budget

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