cloudy with a chance of cuts

Colorado schools face an uphill battle as lawmakers wrestle with budget

PHOTO: Nicholas Garcia
Students line up in the hallway at the Cole Arts and Science Academy in Denver.

Colorado lawmakers learned Friday that balancing the state budget just got about $135 million harder.

That’s the increase in the shortfall between available money and spending obligations according to a new estimate from the governor’s office.

In total, that gap between revenue and demands is nearly $700 million.

The impact on schools is unclear. But a growing consensus from budget officials, lawmakers and observers is that the state’s education funding shortfall will grow — maybe to $1 billion.

That doesn’t mean schools will get less money than they got for the current school year, but it’s clear districts won’t see the increase they say is prescribed in state law to help them keep up with inflation and rising costs.

“The amount of money to fully fund our schools is more than the amount we have available for the entire budget,” said Rep. Millie Hamner, a Frisco Democrat and member of the budget committee.

The state would need to spend $370 million just to meet constitutional and statutory obligations for schools, according to the governor’s office. But lawmakers only have discretion over about $375 million in new revenue for all their priorities including roads and health care.

Officials from the governor’s office pointed to an anticipated drop in the amount of money the state will be able to collect from personal property taxes to fund schools as the main cause of the increasing gap.

Lawmakers also were told Friday they’ll need to save between $135 million and $256 million for taxpayer refunds because the state is expected to collect more money than is allowed by a constitutional amendment known as the Taxpayer’s Bill of Rights, or TABOR.

Hamner said she hopes Friday’s budget news provides lawmakers an opportunity to seriously debate new ways for the state to generate more revenue. A growing list of ideas are circulating the Capitol. They include a bill to recalculate how much revenue the state may collect under TABOR, the governor’s proposal to increase sales tax on recreational marijuana and a budget committee proposal to create a single tax rate on personal property to fund public schools.

Meanwhile, Republican leaders suggested the state will be able to bridge the growing gap.

“As in recent years, the budget gaps facing the state are daunting but not impossible to bridge if we are willing to make some tough calls on priorities in bipartisan fashion,” said budget committee chairman Sen. Kent Lambert, a Colorado Springs Republican. “We just need to keep our spending appetites in check, and our priorities properly ordered.”

life support

Partisan bickering puts financial lifeline for rural schools in danger

PHOTO: Nicholas Garcia
Students at Merino Elementary School work during class.

A bill that would send hundreds of millions of dollars to Colorado’s rural schools faces an uncertain future after party leaders in both legislative chambers Thursday accused each other of not negotiating in good faith.

The multifaceted bill is one of the most complicated of the session. It would send money to rural hospitals, roads and schools. But if lawmakers fail to resolve their differences, hospitals would face severe cuts — forcing some in rural areas to close altogether.

What makes Senate Bill 267 so controversial is that the cornerstone of the bill would redesignate a fee collected by the state that helps pay for Medicaid.

The money the state collects from hospital patients is funneled to the state’s general operating budget. The state’s constitution limits how much that pot of money can grow each year. The bill would redirect the hospital fee to an enterprise account that isn’t subject to that constitutional provision.

Democrats have wanted to redesignate the hospital fee since 2015. They believe reclassifying the fee would elevate some budgetary pressures that have forced schools and other state services to be underfunded. Republicans have staunchly opposed the change. They’ve said it would violate the constitution and the will of voters.

State Sen. Jerry Sonnenberg, a Sterling Republican, changed his mind this year after seeing the potential cuts to rural hospitals. He introduced the bill with state Sen. Lucia Guzman, a Denver Democrat, and state Reps. K.C. Becker, a Boulder Democrat, and Jon Becker, a Fort Morgan Republican.

The bill was always a long shot. There are plenty of provisions neither chamber liked. And it would potentially take a coalition of both parties to pass the bill

But a disagreement over whether the state should lower its spending gap in tandem with redesignating the fee has thrown negotiations into further peril.

Early Thursday, Sonnenberg told reporters he was done negotiating with Democrats. He signaled he would kill the bill that was scheduled for a second hearing later in the morning. While he backed away from his threat, he took shots at Democrats.

“We didn’t kill it,” he told Chalkbeat after sparing the bill. “I’m not ready to give up. But I’m close.”

Sonnenberg said he believes he’s given Democrats more than he should, increasing the amount he’d cap government spending at. But that hasn’t been enough for them, he said.
“I want to save hospitals,” he said. “They want more tax dollars.”

Democrats said they’re concerned the bill as written would trigger another round of budget cuts to all government services, including schools

“It puts our budget in problem territory in no time at all,” said Becker, the Boulder Democrat.

“The numbers just don’t add up,” said Speaker Crisanta Duran, a Denver Democrat.

House Democrats said they’re hoping to restart negotiations soon and will offer “creative solutions.”

Senate Bill 267 is scheduled for another hearing Tuesday.

“We are still holding out hope for rural schools,” said Michelle Murphy, executive director of the Rural Alliance, which represents the state’s rural schools. “We’re grateful to Sen. Sonnenberg and the bill’s other sponsors for their leadership and efforts to bring critical resources to rural communities.”

Show me the money

Why a key piece of legislation to fund Colorado schools is on hold

PHOTO: Nicholas Garcia
Students move about a classroom at the Denver Green School.

Funding for Colorado’s schools is caught in the political crosshairs at the statehouse with only 23 days left for lawmakers to complete their work this year.

Republican leaders of the state Senate called on House Democrats Monday to finish their work on the budget so the legislature can move on to flushing out specifics on how much money each of the state’s schools districts will receive.

But Democrats who control the House say they want to hold off on passing legislation needed to balance the budget while the Senate considers bills that could alleviate some financial pressure.

State Sen. Owen Hill, a Colorado Springs Republican, is the sponsor of this year’s School Finance Act, an annual bill that sets how much each school district receives per pupil.

Hill said he won’t move forward with the school funding bill until the House is finished considering two pieces of legislation that must be passed to balance the state’s budget.

The state’s budget locks in funding for the education department but the annual school finance bill spells out how much each district receives.

“We’re in a holding pattern,” Hill told reporters Monday morning. “Constitutionally, we have to fund our schools. And we can’t do that until the House finishes up the package of the budget.”

GOP leaders admitted they could introduce the funding bill at any time. For example, last year’s bill was introduced at the same time as the state’s budget. But given the complexity of this year’s state budget, leaders said they want more certainty before introducing this year’s school finance bill.

“The numbers don’t mean anything until we balance the budget and I refuse to do that on the backs of our school districts,” Hill said.

This year’s budget calls for a modest increase in school funding. On average, schools will receive about $185 more per student than this year.

That doesn’t mean the bigger picture is bright for school funding, though. The state is already not fulfilling its obligations to fund schools, and the shortfall is projected to increase by about $45 million, to $881 million. That’s because the state doesn’t have enough money to cover all of its costs.

Hill said his funding bill could include more money for rural schools and resources to address the state’s teacher shortage.

House Democrats said they’re waiting for the Senate to take up two bills that could free up more money in this year’s state budget, including a bill that would send $400 million to rural schools.

“With a bill addressing the hospital provider fee working its way through the Senate, and multiple transportation funding measures in different stages of the legislative process, we need to ensure that the entire budget package brings our budget into balance,” Speaker of the House Crisanta Duran said in a statement to Chalkbeat. “All of the bills have to work together, and we want to see how the bills currently in the Senate progress.”

State Rep. Brittany Pettersen, a Lakewood Democrat who is expected to co-sponsor the school funding bill, said it’s time to introduce the bill.

“We need to move forward,” she said. “There are a lot of balls in the air. And these bills are all intertwined. But I’m hopeful.”