From the Statehouse

Budget woes loom again for 2011-12

Legislators Monday got some modest good news about the 2010-11 budget but some sobering forecasts about 2011-12.

The good news is that the 2010-11 budget, which goes into effect July 1, probably won’t need further major cuts beyond a $75 million adjustment by Gov. Bill Ritter in order to keep the state’s reserve at legal levels.

Legislative economist Natalie Mullis
Natalie Mullis, legislative chief economist, briefed lawmakers June 21 on state quarterly revenue forecasts.

Ritter said Monday afternoon that he hopes K-12 funding and higher education can be spared from the $75 million trim, but said, “Nothing is off the table.”

The governor said, “I’m very hopeful” schools can be spared further cuts but added, “Where K-12 education becomes vulnerable again is if Medicaid is not extended.”

To help ease state budget woes, the federal government has been picking up a larger share of Medicaid costs than normal, but that ends in December. A proposal to extend the higher payments is facing tough going in Congress, particularly in the Senate. If the program isn’t extended, Colorado would have to scramble to come up with $245 million or make cuts to cover that amount.

“We’re watching the Medicaid situation closely over the summer,” Ritter said, adding he hopes things will become clearer before Congress’ August recess.

Ritter also said, “It’s our hope we don’t have to do anything to impact higher education again.” The $75 million is about 1 percent of the state’s general fund. Ritter promised a package of recommendations in August.

The bad news is that the 2011 legislature may need to make about $1 billion in cuts to the 2011-12 budget, depending on future levels of federal support for Medicaid; on inflation; on growth in the numbers of prison inmates, sick people, school kids and college students; and on how lawmakers decide to replace one-time sources of money that were used to balance the 2010-11 budget, such as federal stimulus funds.

“We have a pretty tough budget year ahead of us,” said Natalie Mullis, the legislature’s chief economist.

“It looks like we will another rough year in 2011-12,” agreed Lisa Esgar, deputy director of the executive branch’s Office of State Planning and Budgeting.

Because state support for K-12 schools and higher education spending consumes nearly 40 percent of total state spending and more than half of the tax-supported general fund, any cuts are expected to fall heavily on education.

Some legislative leaders previously estimated that K-12 and higher ed could see cuts of $300 million each in 2011-12.

The two revenue forecasts released Monday offer no detailed hints of what education cuts might look like – it’s much too early in the game for that.

Here’s the overview of the budget situation:

2009-10: The state will end the year on June 30 in the black, but the reserve will be $51.7 million less than the required $132.6 million. (The OSPB estimates the reserve shortfall at $74.5 million.) The shortfall doesn’t have to be covered before the end of the year and can be rolled into 2010-11.

2010-11: Sufficient revenues are expected to cover the spending approved by the 2010 legislature, but again the reserve will fall short of required levels. Legislative Council staff estimate about $37 million will be needed to return the reserve to an acceptable level. (OSPB projects a higher number.)

2011-12: In addition to another $61.4 million reserve shortfall, lawmakers will have to replace (or cut) $617 million in one-time funds and cover (or ignore) an estimated $300 million in caseload increases. That makes up the $1 billion.

Some observers think the shortfall could be larger noting, for instance, that school districts’ local revenue likely will decline for 2011-12, putting pressure on the state to cover the difference.

The $1 billion figure didn’t come as a major shock. “This wound up not surprising us a great deal,” Ritter said. Informal estimates in that ballpark were circulating during the closing days of the 2010 session, which adjourned May 12.

But, Monday’s release of the formal quarterly revenue forecasts by legislative staff and OSPB mark a key point in the 2011-12 budget process and begin to focus the issue for legislators.

Gov. Bill Ritter
Gov. Bill Ritter discussed the state budget situation during a news conference June 21.

Executive branch departments already are refining their 2011-12 requests, another set of forecasts will be issued in late September and Ritter has to submit his 2011-12 budget to the Joint Budget Committee by Nov. 1. The panel will hold budget hearings in November and December, and another set of forecasts in late December will update the situation just before the 2011 session convenes.

The national recession began affecting state government in 2009-10 budget year, which is about to end. Lawmakers last spring had to make significant mid-year adjustments in spending, including a $130 million cut in K-12 support. Creation of a balanced 2010-11 budget required significant cuts and revenue shifts.

Overall, there have been $3.5 billion in state budget cuts and adjustment over three fiscal years, Ritter noted.

Total program spending for K-12 schools was about $5.4 billion in 2008-09 and was supposed to rise to nearly $5.7 billion this year, before the midyear adjustments trimmed it back to just under $5.6 billion.

Using a narrow interpretation of the Amendment 23 school-funding formula, the legislature approved about $5.4 billion in total program funding for 2010-11. Full A23 funding would have been about $5.8 billion. The 2010 school finance law recommends the same $5.4 billion figure for 2011-12, although that can be changed by the 2011 legislature.

(Total program funding is the amount of state aid and local revenues used for basic classroom and administrative operations. It doesn’t include additional state aid for such things as transportation and special programs, some federal programs and district revenues from bond issues.)

School districts have responded with layoffs, wage freezes and other cuts of a magnitude Colorado schools haven’t seen in years. (See the One-Stop Budget Cuts Info Center for details.)

Spending at state colleges and universities was maintained at just under $2 billion for 2010-11 – but only with the help of significant federal stimulus support and 9 percent tuition increases for resident undergraduate students. Higher ed is seen as particularly vulnerable to cuts in 2011-12. Senate Bill 10-003, the major flexibility legislation passed last spring, requires colleges to prepare reports on how they would handle a 50 percent cut in state support. Those are due next autumn.

Both forecasts found some some signs of economic hope.

“Both Colorado and the national economy are embarking on a very delicate recovery,” said Kate Watkins, a legislative economist, during the morning JBC meeting where the forecasts were unveiled.

“While the economy is recovering, it is very slow,” Ritter said. “We do believe the economy will recover” in time for the 2012-13 budget year – long after Ritter has left office.

(Both forecasts provide a wealth of information about tax revenues and  the economy of the state and its regions. See below for links to the full forecasts.)

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language proficiency

Educators working on creating more bilingual students worry new state requirements aren’t high enough

A second grade class at Bryant Webster K-8 school in Denver (Joe Amon, The Denver Post).

Colorado educators who led the way in developing high school diploma endorsements recognizing bilingual students worry that new legislation establishing statewide standards for such “seals of biliteracy” sets the bar too low.

Two years ago, Denver Public Schools, Eagle County Schools and the Adams County School District 14 started offering the seal of biliteracy to their students. The three districts worked together to find a common way to assess whether students are fluent in English and another language, and recognize that on high school diplomas. Advocates say the seal is supposed to indicate to colleges and employers that students are truly bilingual.

A bill passed by state legislators this year that will go into effect in August sets a path for districts that want to follow that lead by outlining the minimum that students must do to prove they are fluent in English and in another language.

According to the new law, students must meet a 3.0 grade point average in their English classes and also earn a proficient score on the 11th grade state test, or on Advanced Placement or IB tests. For showing proficiency in the second language, students can either earn proficient scores on nationally recognized tests — or meet a 3.0 grade point average after four years of language classes.

Although educators say the law sends a message of support for bilingual education, that last criteria is one part of what has some concerned.

“It allows for proficiency in a world language to be established solely by completing four years of high school language classes,” said Jorge Garcia, executive director of the Colorado Association for Bilingual Education. “Language classes in one school district may have a different degree of rigor than they do in another.”

The second language criteria should be comparable to the English criteria, several educators said. In the requirements set by Denver, Eagle County and Adams 14, students must at a minimum demonstrate language proficiency through a test score, or in some cases with a portfolio review and interview if a test is not available.

The three districts also catered their requirements based on what each community said was important. In Adams 14 and in Eagle schools, students must perform community service using their language skills. Students also have to do an interview in both languages with a community panel.

“Our school district team developed the community service criteria because we wanted our kids to have authentic practice in their languages,” said Jessica Martinez, director of multilingual education for Eagle County Schools. “We also wanted students to be a bridge to another community than their own. For example, one group of students created academic tutoring services for their peers who don’t yet speak a lot of English. Another student started tutoring her mom and her parents’ friends so they could get their GED.”

The state law doesn’t require students to do community service. But it does allow school districts to go above the state’s requirements when setting up their biliteracy programs.

“Thoughtful school districts can absolutely address these concerns,” Garcia said.

Several school districts in the state are looking to start their own programs. In March, the school board for the Roaring Fork School District in Glenwood Springs voted to start offering the seal. Summit School District also began offering the seal this year.

Leslie Davidson, the dual language coordinator for Summit, said that although her program will change in the next year as she forms more clear requirements around some new tests, she will continue to have higher requirements than the state has set.

This year her students had prove proficiency in their second language by taking a test in that language. They also had to demonstrate English proficiency through the ACT. In addition, students did oral presentations to the community in both languages.

“Their expectations aren’t as high as mine are,” Davidson said. “We’ll probably stay with our higher-level proficiencies. I do have some work to do in terms of how that’s going to look for next year, but I certainly don’t want to just use seat time.”

Meanwhile, the districts that started the seal are increasing their commitment to biliteracy so as many students as possible can be eligible to earn seals in the future.

The Adams 14 school district in Commerce City is using Literacy Squared, a framework written by local researchers for teaching students to read English by strengthening literacy in the native language. The program is being rolled up year by year and will serve students in 34 classrooms from preschool through fourth grade in the fall.

In Eagle County, Martinez said parents have shown such a strong demand for biliteracy that most elementary schools are now dual language schools providing instruction to all students in English for half of the school day and in Spanish for the other half.

Both districts are also increasing the offerings of language classes in middle and high school. The options are important for students who are native English speakers so they too can become bilingual and access the seal. For students whose primary language is not English, the classes can help ensure they don’t lose their primary language as they learn English.

Of Eagle’s 25 students who graduated with a seal of biliteracy this year, 17 were native Spanish speakers and eight were native English speakers.

“We want all kids to see their bilingualism is an asset,” Martinez said. “It’s huge for them.”

 

money matters

Why so negative? Colorado lawmakers seek to rebrand controversial tool that limits spending on schools

A student works at Tollgate Elementary School in Aurora. (Photo by Nic Garcia, Chalkbeat)

Colorado lawmakers are tired of hearing about the “negative factor.”

So they changed its name — at least in statute.

Going forward, the tool that budget writers will use to spend down the state’s financial obligation to public schools to balance the state budget officially will go by its original name: the “budget stabilization factor.”

The change was made when lawmakers passed the state’s annual school funding bill earlier this month.

The negative factor “has been used as a pejorative,” said state Sen. Kevin Priola, the Henderson Republican who put forth the idea of the name change. “The budget is never perfect. But these are the economic realities we have to deal with.”

Some education funding advocates are rolling their eyes. The term, they say, has become so well known and accepted that any attempt to change it will be difficult.

“You can change the name, but the debt’s the same,” said Lisa Weil, executive director of Great Education Colorado, a nonprofit that advocates for more school funding.

The negative factor — oh, sorry, we mean the budget stabilization factor — is just one part of a much larger and complex formula used to determine school funding.

The budget tool was first created in 2009 when state lawmakers were forced to slash the budget after the Great Recession.

School advocates knew they couldn’t escape the cuts the rest of the state was facing. So a team of lawmakers, lobbyists, superintendents and financial officers helped developed the tool.

Here’s how it works: After lawmakers determine how much funding schools should receive based on a formula developed in 1994, they compare that amount to available tax revenue. The difference is that year’s “stabilization factor.”

At the time the tool was created, the group wanted the cuts to be systematic — applied equally across all schools — and transparent. As part of the compromise, the state was required to track how much money it was withholding from schools.

In 2014, funding advocates sued the state, claiming the negative factor was unconstitutional. But the state Supreme Court disagreed.

Since then, Republican lawmakers have become more critical about the provision that requires them to track how much money the state isn’t giving schools. They argue that other state services such as roads, hospitals and parks all share a burden when it comes to balancing the budget.

Lawmakers have withheld about $5.8 billion from schools since the budget balancing tool was created. However, funding has slowly crept up each year, just not as fast as school leaders would hope.