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Colorado school districts would no longer be funded based on a four-year enrollment average under a 2025-26 budget proposal released by Gov. Jared Polis Friday.
Instead, Polis is proposing to fund school districts based on a current-year enrollment estimate, a change that could mean less money for districts with declining enrollment, such as Denver.
At the same time, the governor’s proposal would phase-in a new school funding formula over the course of seven years, instead of six. The school funding formula, which was approved last year, dictates how much state money each district gets per student. The new formula is expected to help districts serving students with more needs and in rural parts of the state.
Both of Polis’ budget proposals are meant to save the state money.
Polis said the changes would help balance the budget over the long term to ensure the state doesn’t return to withholding funding from schools for other priorities — a maneuver called the budget stabilization factor. In the short term, it also helps free up money during a year when state lawmakers will need to plug a $640 million budget hole.
“We’re belt-tightening and cutting agencies and cutting budgets where we can,” Polis said, “and then making sure that we can deliver on funding our schools.”
In total, Polis has proposed a $46.1 billion budget, a 10% increase over last year. His budget includes a $115 million increase to this year’s $9.8 billion K-12 budget, and it would increase per pupil funding to an average of $11,747. His budget doesn’t account for ballot measures that will be voted on next week.
Colorado’s budget process requires Polis to present a budget by Nov. 1 each year. The powerful six-member Joint Budget Committee, which writes the budget and has the most say on spending, will begin crafting a proposal that will be released in March or April.
Colorado is constitutionally mandated to increase school funding by the rate of population growth plus inflation.
Funding school districts based on a four-year enrollment average protects them from a single year enrollment drop that would greatly reduce funding from the state. But it also places the state on the hook for students that might no longer attend that district.
Polis’ proposal wouldn’t change when schools get money for the year. Funding is based on an estimate made in July, then if the official student count in October is lower or higher, the state makes budgetary adjustments. Under the proposal, those adjustments could be steeper if districts experience enrollment fluctuations from year to year.
Colorado Budget Director Mark Ferrandino said districts would need to make budgetary decisions much sooner if they’re going through enrollment declines.
“That’s going to be the biggest impact,” Ferrandino said.
Polis also emphasized that no other state calculates student populations based on a four-year average for the purpose of the budget.
“Basically, districts will have to adapt to enrollment a little quicker than they have, especially districts that are experiencing changes and major changes,” he said. He added that “they can do that because they do it in 41 other states.”
The slower implementation of the formula change will also have an effect on districts.
Last year, education advocates and many district leaders pushed for an overhaul to a 30-year-old formula that’s expected to give less consideration to the cost of living in an area and more money to districts serving larger numbers of students in poverty and English learners. Small and rural districts would also benefit.
Yet it’s also a costly endeavor that will take another $500 million in education funding to implement.
Under the six-year plan, the budget this year would have required about 18% of the $500 million needed to phase-in the formula.
Polis’ budget would spend about 10% of the $500 million in the 2025-26 year. The state would then spend 20% the year after under his proposal. Then, the state would switch back and forth annually until the formula is fully phased in.
“There’s a lot of excitement on both sides of the aisle about the new school finance and funding students where they are,” he said, “and we just need to make sure that we can do it in a way that’s sustainable.”
In a news release, Republican House Minority Leader Rose Pugliese, a Colorado Springs Republican, said she appreciates that the governor wants to avoid withholding money from schools, but the finance reforms will not occur soon enough.
“Colorado families can’t wait seven years for an updated formula to roll out — our students deserve real support now,” she said.
Also included in Polis’ 2025-26 budget:
- A cap on the BEST program, which provides capital funds for schools. The cap is a cost saving measure that takes money from the program to spend on funding schools and would generate about $60 million to $80 million for the State Public School Fund.
- A $13.5 million increase for school categorical funding, or money meant to help specific groups of students such as English learners or students with special needs.
- $2 million to support students in the state’s lowest-rated schools, known as turnaround and priority improvement schools. The ratings are largely based on student test scores.
- A $12.1 million increase for college and university budgets and student financial aid. The money would increase state funding only slightly above the $1.6 billion this year. His administration also has proposed a 2.3% increase for in-state tuition.
- $11.7 million for Colorado’s child care subsidy, or CCCAP, to help make child care more affordable and increase provider rates.
- $7.8 million more for the third year of the state’s Universal Preschool program.
- $3.6 million to support Early Intervention efforts meant to help children under 2 with developmental delays.
Jason Gonzales is a reporter covering higher education and the Colorado legislature. Chalkbeat Colorado partners with Open Campus on higher education coverage. Contact Jason at jgonzales@chalkbeat.org.
