More than a quarter of Colorado’s 100 lawmakers are finding time in their frantic schedules for a deep look at one of the Capitol’s most head-hurting issues – how to pay for schools.
Rep. Millie Hamner says the formal effort by three committees is a way of “stepping back, regrouping” on a difficult subject. By educating a wide group of lawmakers, “Hopefully we’ll have some sense of buy-in about what needs to be done.” The Dillon Democrat is chair of the Joint Budget Committee and promoted the idea along with a budget panel colleague, GOP Rep. Bob Rankin of Carbondale.
But some people who follow school finance are at least somewhat skeptical of the effort and worry it might provide an opening for proposals to redistribute existing K-12 support rather than finding a way to increase school funding.
“Dividing inadequate revenue in different ways doesn’t look very appealing to us,” said Boulder Valley Superintendent Bruce Messinger. Specifically, some district leaders fear that the legislature may consider shifting state support among districts to increase funding for poorer districts.
The six-week effort kicked off Wednesday with a joint meeting of the JBC and the legislature’s two education committees. Combined, the three panels have 26 members.
School funding’s been studied more than once
There’s been no lack of school finance studies in recent years. A special legislative panel studied it in 2009, and an effort spearheaded by the Colorado Children’s Campaign took on the issue in 2012.
Two lawsuits that challenged aspects of the finance system, the Lobato and Dwyer cases, produced reams of documents and data about K-12 funding.
Both the Colorado Supreme Court rejected those challenges, and voters defeated proposed statewide tax increases to fund schools in 2011 and 2013.
So Colorado continues to allocate money to school districts according to a formula created in 1994 and a constitutional amendment passed in 2000. And school funding continues to be squeezed by the vagaries of the annual state budget process and by the negative factor. That’s the mathematical device the legislature uses to reduce school funding from what full application of the finance formula would provide.
The Supreme Court last fall ruled that the negative factor was constitutional, dashing the hopes of people who wanted a court-ordered solution to underfunding.
Funding equity a rising concern
The last couple of years have seen a new wrinkle to the debate – funding equity.
The current funding formula does provide districts additional funding based on numbers of at-risk students and to very small districts. Money also is allocated based on cost of living for staff, a factor that benefits all kinds of districts but not necessarily poor ones.
Critics feel the formula doesn’t provide enough extra money to districts with high percentages of poor students and English-language learners, the kinds of students that need more intensive instruction.
A law passed in 2013 would have provided more money to such districts, but it never went into effect because voters defeated the tax increase needed to pay for it.
Another piece of the equity puzzle are local property tax revenues called “mill levy overrides.” Those are additional taxes approved by a district’s voters.
Those revenues aren’t included in the state funding formula so are purely “extra” money for districts that have them.
Some lawmakers have noted that the statewide total of override revenues, about $826 million, is very close to the current state funding shortfall of $855 million. That’s the negative factor.
In a December briefing paper prepared for the JBC, staff analyst Craig Harper noted, “With the inclusion of override revenues, 58 school districts … were funded at or above pre-negative factor levels in FY 2014-15, some of which were well above that level. An additional 58 school districts offset at least a portion of the negative factor reduction with override revenues. Finally, 62 districts did not collect override moneys and absorbed the full 13.0 percent negative reduction in FY 2014-15.”
Override revenues are not evenly distributed and vary widely by district. Some districts don’t have them at all.
District leaders fear some lawmakers may be interested in placing a greater reliance on local revenues, perhaps going so far as to reduce a district’s state funding by the amount of its override revenues.
“Recalibrating the process would create a lot of tension,” Messinger said. Others agree such a change would trigger a serious political backlash from districts.
While some statehouse observers used the terms “rearranging the deck chairs” and “Groundhog Day” when asked about the study, others think it will hold educational value for lawmakers.
“It’s a great chance to start a conversation,” said Sen. Mike Johnston, D-Denver. The last time lawmakers took a truly in-depth look at school finance was 2013, when Johnston pushed through his proposed rewrite of the funding formula.
Normally, he noted, committees are preoccupied with debating and voting on bills and “don’t have time to absorb detailed content.”
Study kicking off with experts
This week’s first meeting of the three committees featured a briefing by Marguerite Roza, a school finance researcher and consultant from Georgetown University and the Center on Reinvesting Public Education. She focused on ways to improve school productivity and target financial resources more closely on student achievement. (See her presentation below.)
Interestingly, Roza didn’t mention key Colorado problems — the constitutional limits on raising taxes and on annual spending increases and the negative factor. Roza recommended shifting more funding to at-risk students. But the negative factor has reduced the amount of money available for such extra support.
The speaker at the Feb. 17 meeting is Andrew Reschovsky, a University of Wisconsin expert of property taxes. The committees hope to wrap up their business with a final meeting on April 13.
Learn more about school finance in Chalkbeat’s archive.