Superintendents Propose $1.4B Fix to "Modernize" Public School Funding

Superintendents around the state are joining forces to "modernize" public school funding.
Superintendents around the state are joining forces to "modernize" public school funding.
In this age of polarizing partisan politics — where algorithmically curated news feeds only reaffirm biases and Congress is so hamstrung that it can’t pass a budget on time — it’s hard to believe that a consensus can be reached on any substantive issue.

But here in Colorado, superintendents from the Western Slope to the eastern plains have set aside their differences to tackle one of the most pressing issues facing the state: school funding.

A loose collective of superintendents, which refers to itself as Colorado Superintendents, put forward a proposal to “modernize” school funding during a committee hearing at the Capitol on January 9. The proposal and its forthcoming bill were backed by 75 superintendents from large urban districts like Denver Public Schools to small rural districts like Agate School District, and more support for the proposal is expected to pour in through the end of the month.

“The needs and the expectations placed on schools have exponentially outpaced the level of investment we have made in our schools,” says Walt Cooper, superintendent at Cheyenne Mountain who was one of four district leaders who presented the proposal. “The impact of second-language learners, the growing number of kids coming to us in poverty and the associated social challenges that come with that, the safety and security measures.... They all take time and money.”

The proposal comes at a time when the state is grappling with a critical teacher shortage, partially because most school districts can't afford to pay their teachers a living wage, and when teachers are crowdfunding to subsidize school supplies and extracurricular activities because of district austerity measures.

The superintendent collective began meeting four years ago to connect on different issues impacting school districts. In the summer of 2016, the group fixed its attention on changing the state education finance system. Eighteen months of work culminated in a three-page proposal for a new funding formula that was presented to the ten-member Legislative Interim Committee on School Finance, comprising education committee members from both the state House and Senate.
Notable proposed changes to the funding formula include increasing the state’s payout for at-risk students by increasing the funding eligibility threshold to include students receiving reduced lunches, not just those who receive free lunches, as is currently the funding model.

For a student to receive free lunches, that student’s household income can’t surpass 135 percent of the federal poverty line or, for reduced lunches, 185 percent of the federal poverty line. Poverty is used as a proxy to determine the number of at-risk students.

“If [public schools] are going to be the great equalizer in this country, they need to address all those needs that kids bring in the door,” Cooper says.

The second major change in the funding proposal reshapes the formula itself by including major categorical program funding — special education, English-language learners, and gifted and talented education — within the per-pupil funding formula. Currently, categorical programs each receive a statewide budget allocation that’s evenly distributed for each student in that program.

For example, $45 million of categorical program funding was allocated for English-language learners for the 2017-’18 school year, according to the Colorado Department of Education. About 14 percent of statewide enrollment, or more than 126,000 students, are eligible for this funding, which comes out to roughly $350 of additional annual school-district funding for each eligible student. This method places a set dollar amount for programs regardless of the number of students or the required funding level to adequately service those students, so if categorical program funding stagnates and eligibility rises, per-pupil funding for these programs will decline.

Under the new funding formula, funding for major categorical programs will be placed within the per-pupil funding calculation, guaranteeing that adequate funding will be calculated.

“Individual student characteristics have never driven the student finance formula before,” Cooper says. “School-district-wide characteristics have driven the formula. That doesn’t sound like that big a deal, but it’s a large-scale shift.”

Representative Dave Young, a Democrat from Greeley who is also running for state treasurer this year, is expected to champion the bill that he has helped draft since June and introduce it to the House by January 31.

“Our current program is a district funding program, and this is really focused on students,” Young says. “It’s pretty rare that we see this kind of consensus, or at least approaching consensus opinion, from superintendents. I took really deep notice of that. … I began to see they had captured something here that had the potential to meet the needs of every student across the state.”

The proposal has one caveat: It explicitly states that it will not be enacted unless the model is fully funded.
That would require $1.4 billion to $1.6 billion in additional state appropriations, according to estimates the Colorado Superintendents received from its consultant, APA Consulting. A fiscal note has yet to be produced by the Legislative Council Staff to solidify the official monetary impact of the proposal. For context, the legislature earmarked $6.6 billion for public education funding for the 2017-’18 school year.

While that may sound like a whopping amount of money to inject into public schools, the divide between district entitlements under the current funding formula and the proposal isn’t as wide as it may seem.

A huge chunk of that roughly $1.5 billion is funding that school districts should already receive. Every year since 2009, after the Great Recession hit, the state has slashed hundreds of millions of dollars from public education with what’s known as the budget stabilization factor. In the 2017-'18 school year alone, the budget stabilization factor slashed 11.1 percent of per-pupil funding to districts across the state, or about $828 million. Over the years, the legislature has underfunded public education by $6.67 billion because of the budget stabilization factor, according to the nonprofit Colorado School Finance Project, a nonpartisan group specializing in school finance research.

“Our budget is strapped in every aspect. We haven’t just cut to the bone; we have cut through the bone,” Young says. “We’re approaching a backlog of billions of dollars that this system was short over many years while expecting it to function well.”

Colorado consistently ranks near the bottom for per-pupil spending. The average per-pupil spending in the state was $9,245 for the 2015 fiscal year, according to the U.S. Census Bureau, which is more than $2,100 below the U.S. average and places it in the bottom ten states for spending. And according to a 2016 report from the National Center for Education Statistics, Colorado spent $703 less per pupil during the 2012-2013 school year than it did a decade earlier, placing the state near last place for per-pupil spending changes.

Implementation of the new funding-formula proposal by the Colorado Superintendents would require the removal of the budget stabilization factor, which would leave about a $600 million to $800 million gap to fill with additional funding.

“We’re not even at national average with this formula, but it's a great start,” says Charlotte Ciancio, superintendent at Mapleton Public Schools, who also presented to the committee. “I think it’s the very best thing that we can come up with for all of Colorado and all of Colorado’s children.”

With or without the budget stabilization factor — jokingly referred to as the BS factor — legislators may be hard-pressed to come up with that kind of cash or, with how the first day of the 2018 legislative session played out on Wednesday, even muster the bipartisan support necessary to take the bill to the finish line. The greatest hurdle is overcoming the state’s restrictive tax policies written into the state’s constitution.

The convergence of the Taxpayer’s Bill of Rights and the Gallagher Amendment have tied the hands of government to raise taxes to fund everything from infrastructure to mental-health programs to schools. TABOR requires any tax increases to go to a vote, and it limits revenue collection and tax-spending. The Gallagher Amendment sets a constant ratio between residential and property-tax revenues. The net effect has been a downward trend in school districts' ability to raise property-tax revenues.

“If we don’t do something about our state’s financial mess emblazoned in the constitution, we’re going to have trouble,” Young says. “The legislature can’t raise taxes; only the voters can raise taxes. If they say no, we’re tasked with cutting the budget in ways we think will balance it. ... We’ve damaged every aspect of service and state government as a result of it.”

Although the new school-finance proposal put forward by Colorado Superintendents will not address the tax issue, the group is hopeful that providing a vision for education funding will further grassroots efforts to change tax policy.

“We perfectly understand there’s a lot of work to do,” Cooper says. “We’re ready to stand alongside any group that can effectively move the needle to help get one more piece of this puzzle put in place. … Regardless of how the money flows or to where, this is how from a large pot this is how it should be distributed.” 
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Nora Olabi covers general and breaking news for Westword with an emphasis on politics and local government. Prior to making her way to the Front Range and joining Westword in 2017, she worked at major Houston newspapers. She's a proud Houstonian who's acclimating to snow and mountain living.
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