School Finance

School funding proposal fleshed out

The Colorado School Finance Partnership today issued “Financing Colorado’s Future,” an expanded version of a March report that calls for “a school funding system that drives student achievement and aligns with our state’s values around educational access and excellence.”

Photo illustration of piggy bankThe report argues, “Now is the time to create a system that is equitable, innovative and sufficiently funded.”

The new report asserts the same major principles and goals as did the March document, but it expands on those issues and provides more background.

The partnership held a lengthy series of meetings in 2011, and a 16-member steering committee representing a wide range of educational and civic groups developed the report.

The eight-page March version of the report was issued partly in hopes of sparking legislative action this year on some school funding issues, and Sen. Mike Johnston, D-Denver, promised to carry legislation on the subject. But Johnston was preoccupied with bills on undocumented student tuition and early childhood literacy, and he said near the end of the session that school finance needed more study before it was ready for legislative discussion.

The partnership’s report calls for creation of a state “task force charged with creating a new School Finance Act in accordance with the principles and recommendations developed by the School Finance Partnership. … The state should contract for a cost analysis of reaching state education standards using a balance between all available methods” of calculating school costs.

The partnership’s future role in the school finance discussion hasn’t been fully determined, Chris Watney told Education News Colorado in a recent interview. Watney is president of the Colorado Children’s Campaign, which organized the partnership. Watney said that regardless of the partnership’s future form, the children’s campaign will continue to be active on the issue.

The partnership’s study is the most recent in a long series of finance studies done in recent years by legislative committees, advocacy groups and research organizations.

But the school finance document that carries the greatest urgency is the December 2011 ruling by Denver District Judge Sheila Rappaport, who held that the current finance system is unconstitutional because it doesn’t meet the state constitution’s requirement for a “thorough and uniform” educational system. The Lobato v. State case is on appeal to the Colorado Supreme Court, and Attorney General John Suthers recently filed the state’s opening brief in the case.

Most observers doubt there will be any significant movement on school finance reform until after the supreme court rules on Lobato. A decision could come late this year or early in 2013.

The partnership’s report echoes some of the points made by the Lobato plaintiffs, including a guiding principle that the state funding system “should provide revenue sufficient for districts to meet state standards as well as assessment, accountability and evaluation expectations.”

The other three guiding principles of the report are:

Alignment & Accountability: A portion of funding should follow students, individual schools should have significant budget flexibility and funding intended for particular groups of students should in fact go to those students. The paper also urges funding of full-day preschool for at-risk 4-year-olds, half day for 3-year-olds, plus full-day kindergarten and funding of high school/college dual enrollment programs.

Innovation: A new finance system should give districts flexibility in using funds, include a grant program for innovative programs and encourage a competency-based system, rather than one focused on seat time.

Equity: The system should include extra funding for students with special challenges and needs, should recognize different costs in different kinds of districts, strengthen regional services for small districts and be based on research. The paper also urges reform of state and local revenue sources and tax structures.

About the School Finance Partnership

  • The group was organized early last year by the Colorado Children’s Campaign and operated on two levels.
  • A Partnership Committee was open to any interested groups and individuals and met several times last year for briefings and discussion. See the partnership website for links to meeting reports and documents about school finance.
  • A 16-member steering committee deliberated and produced the recommendations, reaching all decisions by full consensus. Members of the steering committee represent the Colorado Association of School Boards, Colorado Association of School Executives, Colorado Education Association, Colorado Forum, Colorado Legacy Foundation, Colorado Succeeds, Denver Metro Chamber, Donnell-Kay Foundation, Great Futures Colorado and the Children’s Campaign.
  • See the full list of steering committee members here.

Piece of the pie

Colorado bill would take back money from state-authorized charter schools

PHOTO: Denver Post
Students at James Irwin Charter Academy in Colorado Springs

A bill introduced in the Colorado House this week would take back money set aside for state-authorized charter schools and return it to the general fund, where it would be available for any purpose.

The bill, sponsored by state Rep. Cathy Kipp, a Fort Collins Democrat and former Poudre School District board member, would repeal one portion of a key compromise from the 2017 legislative session.

That bill required school districts to share money from mill levy overrides, a kind of local property tax increase, with charter schools that they had authorized. It also said that the legislature should set aside state money for schools authorized by the Charter School Institute, a state entity, to serve as the equivalent of that mill levy money. This money is on top of the base per-pupil funding that goes to all schools, much of it provided by state dollars.

This new proposal doesn’t affect charters that are authorized by districts, which would still be required to share additional local property tax money. But it does away with the fund within the state budget that provides extra money to state-authorized schools.

The Charter School Institute oversees 39 schools serving more than 18,000 students.

It’s unclear whether the bill will get traction. Kipp is the sole sponsor right now, and charter schools have enjoyed broad bipartisan support at the Capitol in the past. Gov. Jared Polis, a Democrat, is the founder of the New America charter network, which has schools authorized by the Charter School Institute as well as by local districts.

Charter schools are publicly funded but independently run nonprofit organizations. Opponents see them as siphoning students and money from traditional, district-run schools, while proponents argue they provide much needed diversity of school types within the public system and with that, options for parents and students.

The 2017 legislation passed with bipartisan support but divided Democrats, who now control both chambers of the Colorado General Assembly. This is the first legislation of the 2019 session to attempt to roll back gains made by charter schools under previously divided state government.

The 2018-19 Colorado budget includes $5.5 million, roughly $300 per student, for state-authorized charter schools to make up for local mill levy money they don’t get, and the proposed 2019-20 budget calls for that to almost double to $10.5 million. “Fully funding” the charter institute schools — meaning providing them the equivalent of what they would get from local property taxes if they were authorized by their districts — would cost $29.7 million.

Kipp said that with education funding tight, the state cannot afford to share with charters. She calls the plan to spend state money to make up for local property tax revenue “taxation without representation.” Mill levy overrides are approved by voters in those school districts, while there is no equivalent special tax approved statewide to help charter institute schools — or any Colorado schools, for that matter.

“You have a person who has never voted for a mill levy override, and their school may be drowning, and their tax dollars are going to another district,” she said.

Mill levy overrides, which can amount to thousands of dollars per student, provide important supplemental funding in districts where voters agree, but they’re also a major contributor to inequity in Colorado school finance. In the case of charter schools, the 2017 legislation means district-authorized schools benefit from those dollars, and state-authorized schools get some extra money from the state.

But district schools in places where voters have turned down requests for additional property taxes don’t get any additional money, even as the state continues to withhold money from schools under the budget stabilization factor.

Terry Croy Lewis, executive director of the Charter School Institute, calls the bill “very disappointing.” The extra state money, known as the mill levy equalization fund, represents a fraction of the money that charter schools would get if they had district authorization and access to mill levy overrides. It’s also a tiny fraction of the more than $7 billion that Colorado spends on K-12 education.

“We’re starting from way behind on funding equity,” she said. “To say that any charter is getting more than their share is just inaccurate. We still have a long way to go.”

Lewis sees the taxation question differently than Kipp. Parents are paying higher property taxes to support their district schools, while their children in charter schools don’t see the benefit. Meanwhile, charter schools have to pay for their buildings out of operating costs, meaning they have less money for teacher salaries and other educational needs.

At Mountain Song Community School, a 300-student Waldorf charter school in Colorado Springs, the extra $300 per student has allowed the school to hire an additional special education teacher and classroom aides to better serve students with disabilities.

“Our costs are rising rapidly because more and more severe needs students are coming to our schools,” said Teresa Woods, principal at Mountain Song. “Districts have economies of scale. As a single school, we’re doing the work that a district would do to meet our students’ needs, but we don’t have any resources to pool.”

“If the mill levy funds were cut, it would definitely cut into our ability to meet the needs of all our students, and we’re mandated by law to serve those students, including severe needs students,” she added.

At the Thomas MacLaren School, another Colorado Springs institute-authorized charter school serving roughly 800 students, administrators have treated the mill levy equalization money as one-time funds and used them for building upgrades, but if that money were reliable each year, the school would raise teacher salaries, which lag far behind those in the surrounding school district, Executive Director Mary Faith Hall said.

The Colorado Early College network, serving more than 2,900 students on campuses in Colorado Springs, Aurora, Parker, and Fort Collins, has used the additional money to provide bus transportation, to increase teacher salaries, and to cover some tuition, books, and fees for college courses. The early college model helps students earn college credit while still in high school, with many students graduating with both a high school diploma and an associate degree.

“The CEC Network of schools would be devastated to lose this funding” Chief Executive Administrator Sandi Brown wrote in an email.

Kipp said these financial challenges don’t mean the state should kick in more money than it does for district-run and district-authorized schools. These issues are embedded in the charter school model, she said, and it’s not the state’s job to solve them.

“Charter schools have always said they can do better for cheaper,” Kipp said. “So do better for cheaper, and don’t ask for disproportionate share.”

behind the budget

With House plan that adds money for vulnerable kids, all Indianapolis districts would gain

PHOTO: Scott Elliott
Perry Township, along with the other Marion County districts, would see more per-student funding if a House budget proposal moves forward.

Every district in Indianapolis is tentatively slated to get more state dollars per student under House Republicans’ 2019 budget plan released this week — exceeding some school leaders’ expectations.

For the most part, new money added to the budget to fund each student along with higher enrollment estimates are driving the increases. But even though some districts are projected to lose students, they would still get more money because of changes to Indiana’s funding formula that add money for vulnerable students and because lawmakers put more money in the budget overall.

“I just didn’t think they’d be able to reach that level when they started the session,” said Patrick Mapes, superintendent in Perry Township. “It’s very much appreciated.”

In Indianapolis Public Schools, the city’s largest school district, per-student funding is expected to go up more than 3 percent to $8,029 from $7,764. Overall, the district would see about 4 percent more in total state dollars. Compared to other districts, IPS receives more per student in part because of the number of students there from low-income families. Having more English-learners and students with disabilities can also bring in additional funding per-student.

“There are still too many moving pieces in other parts of the comprehensive budget proposal to get a clear picture of what this will ultimately mean for our students and employees,” an IPS spokeswoman said in an emailed statement.

The estimates are far from final, as the Senate will still offer its own budget draft and lawmakers will eventually have to come to a compromise. But the House draft, which easily passed out of the Ways and Means Committee on Monday, will likely see support from the full House in the coming week.

This year, district funding estimates could be even more volatile because of problems with a calculation that drives extra aid to districts with larger shares of students from low-income families. It’s unclear how this might affect schools because the calculations were not changed from last year.

“We used the numbers that we felt gave schools the most realistic proposal,” said House Ways & Means Chairman Todd Huston. He said that he was not sure when more accurate projections would be available, but House Republican staff was working with other state agencies to dig into the problem.

The budget draft proposes increasing Indiana’s contributions to schools by $461 million — or 4.3 percent — through 2021, a little more than increases in years past. The basic per-student funding that all districts get would jump from $5,352 per student this year to $5,442 per student in 2020, and $5,549 per student in 2021.

House lawmakers also made some big overall changes to how schools are funded that do more to support some of the state’s most vulnerable students.

Funding for preschool for students with disabilities increased for the first time in more than 25 years, going from $2,750 per student currently, to $2,875 per student in 2020, and $3,000 per student by 2021. In 2018, about 13,000 students qualified for the program, costing the state about $36 million. The increased grant would up those totals to about $37.3 million in 2020 and $39 million in 2021.

The budget draft would also send more money to educate students learning English as a new language for the fourth year in a row. Last year, lawmakers set aside about $32 million. Over the next two years, there’d be more than $40 million available for grants, at $325 per student, up from $300 previously.

Higher per-student grants for English learners would help the district shift more money to teachers and other employees, said Mapes, the Perry Township superintendent. Raising teacher salaries has been a hot topic during this year’s legislative session, and while money is not specifically earmarked for raises in the House budget plan, Mapes said it doesn’t need to be.

“That’s local control,” Mapes said. “We have an elected school board whose job is to make that decision for each school corporation in the state. It’s not the job of the legislature to direct down a salary schedule.”

In Beech Grove, the funding forecast is slightly less optimistic — the district is the only in the county projected to lose funding overall through 2021, by a small margin of less than 1 percent. That’s driven by a projected loss of about 116 students out of a total of 3,033.

“We all need to take three steps back and not panic because … there’s a factor here that’s real critical — the standpoint that our enrollment has gone up for nine straight years until this year,” said Paul Kaiser, superintendent in the district. Lawmakers “are estimating our enrollment is going to continue to drop.”

Kaiser noted that the district does have a high rate of students transferring in from outside the district — Beech Grove had the second highest rate of students transferring into the district last year, with almost 1,200 students coming in. Like the rest of the county, Beech Grove is expected to get more dollars per student, so if transfers work out like Kaiser expects, the additional money would turn things around. He said he isn’t sure why enrollment was down last year.

“We’re hoping last year’s drop in enrollment was a blip on the horizon,” Kaiser said. “And if it’s not, then we’ll have to decide what we want to do.”

Part of Kaiser’s strategy is going to district voters in the fall to ask them to approve a tax increase — a move many school districts across the state, including IPS, are increasingly making to bring in more revenue.

One group that would see reductions under the House plan were virtual schools and virtual programs operated by school districts — they were cut from 100 percent of what students in traditional schools get to 90 percent, equivalent with students at virtual charter schools.

Lawmakers made the change in response to a rapidly growing virtual school in the Union school district, near Modoc, helped throw off school funding estimates in 2017. Even with the funding cut, budget projections show Union still would receive more state money, driven largely by growing enrollment.

House Republican staff did not confirm whether the change in all district-based virtual school funding resulted in cost-savings for the state, but a fiscal analysis from legislative staff estimated it could save the state about $3 million in 2020.