Funding 101

Updated on Wed, 07/19/2017 - 2:47pm

Making sense of state and district 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.

General Fund Graph 2017

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 Evaluation 2016

*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.

Per Pupil Funding 2016

*Even though we have lower tax revenue, we have also not approved as many bonds or overrides 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 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 Legislative acts led to decreasing state funding over the years:


    • 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. 

  • Gallagher Amendment

    • The Gallagher Amendment was an amendment to the Colorado Constitution enacted in 1982 concerning property tax. 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 business 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.

  • 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. 

    • For more info, see our FAQ on Marijuana money, watch this video from 9News or read this article from KRCC

Digging a Little Further

2017-18 Budget Update

There are several factors that are leading to a challenging budget season for the upcoming 2017-18 school year. You can read about all of them in Chris Gdowski's letter to the community. Essentially, depending on legislation passing and expense increases realizing, the district is looking at a lack of funds in the range of five to 13.8 million dollars. 

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