Frequently Asked Questions about Education Funding
- How Do Schools Receive Money?
- How Do I Make Sense of All These Legislative Issues?
- Isn’t Our Economy Growing?
- Doesn’t the district have reserves?
- How has the lack of funding affected my school?
- Can’t We Cut Administration Costs?
- Isn't all spending for the state down?
- What happens if we do nothing?
- What about all that marijuana money?
Public school districts receive the majority of funding from the State and from local property taxes, with a small amount from federal sources. Funding for districts is provided first by local sources of revenue (property and ownership taxes). The State covers the rest based on a per-pupil equation called the School Finance Formula. The formula starts with a base amount for each district and adds factors that reflect district characteristics and demographics, attempting to make adjustments for equity. Recent legislation has added a new factor called the Negative Factor or Budget Stabilization Factor, which allows the Legislature to reduce education funding to stabilize the state budget. The Negative Factor has severely reduced education funding for every district in Colorado.
Colorado also allows districts to ask voters to approve funding that goes beyond the state distribution through voter-approved tax revenue funding.
- 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. Think "bonds = buildings".
- Overrides are additions to the general fund and used for operating expenses such as salaries and benefits, instructional programs and classroom technology. Think "overrides = operations".
From TABOR and Negative Factor to Amendment 23 and the School Finance Act, legislative issues that affect public education funding can be complicated. Check out this PDF that helps show the progression of legal actions that have led to our current situation - and how it funds K-12.
You can also get updates on the various bills currently with the state Legislature with the Chalkbeat Bill Tracker.
Even though the economy is growing, funding for K-12 education hasn't rebounded to pre-Great Recession levels. State lawmakers set school funding levels each year and starting in the 2009-2010 school year those allocations have fallen short of the amount needed to keep up with inflation and growing statewide enrollment. For example, in the 2016-2017 school year, the Five Star District was funded about 11.5 percent lower than the 2008-2009 school year when adjusting for inflation, even though the economy is growing. In dollars and cents, the state funding reductions (called the “negative factor”) over the past eight years total more than $290 million for the Five Star District alone.
Higher taxes collected from increased property values are absorbed into the State general fund. As a result, districts don't necessarily receive additional dollars from the state, because the state can lower the percentage it contributes and raise the percentage local funds need to contribute.
Over the past seven years, we have intentionally spent down one-time funds in our discretionary reserves to cover some of the pain from the Great Recession and the state’s reduced funding. Like a personal savings account, those funds are now all used up.
The state funding reductions (called the “negative factor”) over the past eight years total more than $290 million for the Five Star District alone. This has limited spending on instruction, operations and maintenance, and forced cuts at the school level that would have otherwise been covered.
While 92 percent of the Five Star Schools’ General Fund budget is spent on employee salaries and benefits, including teachers and principals, just 6.9 percent of salaries and benefits are assigned to administration positions. That makes the Five Star District one of the leanest in the state of Colorado.
In addition, for the 2017-18 school year, Adams 12 Five Star Schools cut $1.4 million from the administrative budget.
The Colorado Department of Education tracks administration costs for districts. You can view their report (click on "Comparison of Salaries and Benefits by Job Classification").
It is true that spending for roads and transportation is also seeing cuts at the state level. However, according to a new U.S. Department of Education report, Colorado’s spending on prisons rose five times faster than spending on education since 1990.
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 curriculum funding cuts that would decrease educational innovation and programming, or salary freezes for support staff, administration and teachers.
Read our marijuana funding page for answers.