State lawmakers face key school funding questions

Wednesday, March 27, 2019 - 12:15pm

Many educators and parents hoped they had an answer for Colorado’s school funding challenges with last November’s Amendment 73. But voters defeated that plan, making it the third statewide tax increase for schools to be rejected in less than a decade.

That sent the school finance problem back to the Legislature, which faces three key questions about paying for education; issues that likely won’t be resolved until April, as the session heads into its final weeks.

How much to trim the Budget Stabilization Factor?
What used to be called the Negative Factor started the 2018-19 school year at $672.4 million. (Basically, the factor allows lawmakers to set K-12 spending lower than it would be under the terms of the state school funding formula. It’s a device to help the Legislature balance the overall state budget.)

Based on proposals from Gov. Jared Polis, the 2019-20 Budget Stabilization Factor could be bought down by $77 million, meaning additional revenue for education.

Since the Negative Factor was created in 2010, its high point was just over $1 billion in 2012-13 and 2013-14.

How does the state pay for full-day kindergarten?
Polis has made state funding of universal full-day kindergarten a top policy priority. His plan’s price tag would be $227 million in 2019-20, plus $25.7 million for district implementation costs. Polis’ plan also includes a $13 million boost for the Colorado Preschool Program.

The governor is betting that rising local property tax revenues will save the state $274 million of school support costs in 2019-20 and $327 million in 2020-21, money that now can be used for kindergarten.

But some lawmakers are nervous about adding full-day kindergarten to education funding because they worry about what happens when the next recession hits and state revenues stall or even decline. Despite this concern, the Joint Budget Committee has set aside dollars in next year’s budget to pay for full-day kindergarten.

Legislation around full-day kindergarten was introduced on March 22.

Is there a big fix in the works?
There’s no indication now that lawmakers are interested in proposing another education tax hike to voters.

But Democratic leaders have introduced legislation that would allow the state to keep and spend revenues in excess of the constitutional revenue and spending ceiling determined by TABOR (Taxpayer’s Bill of Rights). Democratic House Speaker KC Becker of Boulder said the revenue would be allocated equally for K-12 schools, higher education and transportation. If such a plan is passed by the Legislature it would require voter approval.

And there’s talk at the Capitol, especially among some Joint Budget Committee members, about ways to increase local school district revenues rather than state K-12 spending.

This plan would set a uniform mill levy for all school districts, a move intended to ease tax inequities between districts and increase the amount of K-12 revenue raised by local taxes. (Mill levies are part of the mathematical formula used to calculate property tax bills.)

The plan would require districts with low mill levies to ask their voters to raise property tax rates, which could be politically challenging in some districts. Lots of work remains to turn the concept into a bill.