In State of the State, Colorado governor points to ‘systemic problem’ in school funding, pitches preschool expansion

Coming on the heels of Colorado adopting full-day kindergarten, Gov. Jared Polis made the case for a major preschool expansion and, in a move that one lawmaker said “invigorated the conversation,” pointed to unequal property tax rates around the state as the “root of our school funding issues.”

In his second State of the State address, delivered Thursday to lawmakers, Polis touted the education achievements of his first year in office and pledged more progress on key issues. Polis has taken a special interest in education and has, according to many advocates and lawmakers, taken a much more hands-on approach than his predecessor, former Gov. John Hickenlooper.

As education advocates have called for more investment, a major barrier has been the lack of new revenue. Colorado’s Taxpayer’s Bill of Rights requires voters to approve any new taxes, and voters mostly have declined to do so at the statewide level. Polis himself has been lukewarm toward past efforts to raise revenue.

Exacerbating the problem, the complicated interaction of constitutional provisions has left the state with a patchwork of local property taxes, locked in by statute. Because the state backfills whatever local taxes do not generate, the state has ended up on the hook for a larger share of total education funding over the last three decades and in some cases sends more money to wealthy districts with low tax rates and less to poor ones with high tax rates.

One proposal that’s been floated would generate as much as $450 million in extra money that could be put toward education or other needs in the state budget by requiring districts to raise local taxes. Those that didn’t could lose out on state revenue.

While stopping short of endorsing that specific proposal, Polis surprised many lawmakers by identifying this as the key problem in school finance.

“Because of our fiscal rules, the state spends far too much money backfilling some of the wealthiest districts not only in the state but in the country,” he said. “That is truly at the root of our school funding issues. Together we can fix this systemic problem and finally raise pay for our hardworking educators.”

In an interview after the speech, Polis said he was “open to solutions” and said these property tax disparities are what “led to what we call the budget stabilization factor, the negative factor.”

This “factor” is the amount that Colorado lawmakers have withheld from school districts to pay for other budget priorities since the Great Recession. It’s added up to more than $8 billion over the last decade, and in the 2020-21 budget is likely to be almost $500 million — similar to the amount that would be generated if all school districts had the same tax rates.

Lawmakers said Polis has revived a discussion that had stalled. A special committee on school finance wasn’t able to produce legislation before the session started, and it’s also uncertain whether the Joint Budget Committee will give its influential endorsement to local school tax reform. There’s broad consensus that school finance badly needs fixing, but there are also major political hurdles to any solutions. It’s not clear whether legislation will even be introduced this session, much less make it to a vote.

“It invigorates the dialogue,” said state Sen. Bob Rankin, a Carbondale Republican and member of the Joint Budget Committee. “It means we have to talk about it.”

Rankin has been a major advocate for mill levy reform even as he’s said he cannot vote for the current proposal because the school districts he represents, not all of them wealthy, would be hard hit.

“It is the first time I have heard a governor in my time identify the problems that exist on that part of the formula,” said House Majority Leader Alec Garnett, a Denver Democrat. “When it comes to school finance, he’s the most willing executive partner I’ve seen in terms of really getting into the details.”

Polis ran on funding full-day kindergarten and expanding preschool to all 4-year-olds. Colorado previously only paid for a half day of kindergarten, but in 2019, lawmakers voted overwhelmingly to pay for a whole day, making it free to families. This change also freed up 5,100 preschool spots as districts reallocated money they had previously used for kindergarten.

This year, Polis is asking for $27 million to help another 6,000 preschoolers. If successful, half of all eligible children in Colorado would be able to attend publicly funded preschool. Many lawmakers, while acknowledging the importance of preschool, have been hesitant to endorse more money for it.

Polis said investment in preschool now will pay off later, and he pledged to achieve universal access to high quality preschool for 4-year-olds by the end of his first term.

“Early childhood education isn’t just about giving our kids a great start in life, although that’s truly where we start,” he said. “Every dollar invested in high-quality preschool produces a $7 return on investment due to higher earnings, lower special education needs, greater tax revenues, less dependency on public assistance, and lower crime rates.

“This isn’t just the right thing to do,” he said. “It’s the smart thing to do. And it’s time to get it done.”

Teacher pay has emerged early as a key focus area for this legislative session. The Colorado Education Association, the state’s largest teachers union, has named it a top priority, and Republicans have proposed their own ideas for bonuses for teachers rated highly effective.

Colorado has no statewide salary schedule, and Polis reiterated in his speech that teacher pay is a local issue. But he suggested that broader reform would allow districts to pay teachers more.

The education proposals laid out in Polis’ 57-minute speech are part of a broader agenda that includes changes to the Colorado tax code, a public health insurance option, paid family leave, overhauling the state mental health system, more transportation spending, and expanding renewable energy.

With the exception of income tax changes and transportation funding, Republicans have already pledged to oppose many of the governor’s proposals.

At the same time, Polis and Democrats also face pressure from the left to do more.

Just before Polis was to enter the chamber, climate activists seated in the gallery declared, “This is a people’s State of the State,” and unfurled a banner that read, “No wells at Bello Romero. No more sacrifice zones.” Students at the Greeley elementary school that serves mostly children of color from low-income families play within sight of natural gas wells.

Another major issue this session will be school safety. Polis acknowledged in the audience John and Maria Castillo, the parents of Kendrick Castillo, who was killed in May’s shooting at STEM School Highlands Ranch. He praised the work of a special committee that produced several bills aimed at providing more support for student mental health and improving coordination around threat assessments.

“Every child deserves a safe opportunity to learn, make friends, create memories, grow up, graduate, and move on to a successful life,” Polis said.

State Rep. Dafna Michaelson Jenet, a Commerce City Democrat who chaired the School Safety Interim Committee, said she was “thrilled” to see that work highlighted.

“This was a committee that could have easily blown up and done nothing but instead it produced five pieces of legislation that I believe will really add to the safety of children in our schools,” she said.