School Finance

School finance plan a tale of 178 districts

The proposed $950 million education tax hike is garnering broad support across Colorado’s education community. But because the plan affects school districts in so many different ways, the intensity of that support varies.

StockA66Logo92613“You almost have to take it district by district” to gauge the impact of Amendment 66 and its companion Senate Bill 13-213, said Jane Urschel, deputy executive director of the Colorado Association of Schools Boards.

Despite those differences, many school administrators support the plan. Opinions vary more widely among school board members and candidates.

EdNews reviewed district-by-district projections compiled by legislative analysts and the Department of Education and interviewed education leaders around the state to develop a picture of how districts would be affected and how people are responding. The database that accompanies this article allows you to find the figures for individual districts.

Key features of the bill would change the state’s school funding formula to provide more support for full-day kindergarten and the state preschool program and to shift more support to at-risk students and English language learners, particularly in districts where such students are concentrated.

PLAN AT A GLANCE
Key features of SB213
  • Changes the current single-date enrollment count to a system called average daily membership, intended to provide more accurate student counts
  • Significant changes in the weights used to calculate individual district funding
  • Full funding of state program for at-risk preschoolers and for full-day kindergarten
  • Increased funding for charters
  • Somewhat more flexibility for principals in spending at-risk funds
  • $411 per student for districts to spend on reform implementation
  • Grant program to fund innovations and measures such as longer school days
  • More funding for special education and gifted and talented
  • Increased flexibility for districts in local tax increases
  • Detailed reports required on spending and effectiveness

Funding for some parts of the bill may fluctuate depending on actual revenues, and many observers think additional legislation will be needed to fine-tune the bill.

Legislative staff analysis

Key features of A66

  • Requires that 43 percent of state general fund revenues be devoted to P-12 education
  • Removes the requirement for annual inflationary increases from the constitution
  • Raises the individual income tax rate from 4.63 percent to 5 percent on incomes up to $75,000
  • Income above $75,000 would be taxed at 5.9 percent
  • Small business owners who file taxes as individuals would be affected

“Blue Book” explanation of A66

How at-risk funding works

Every district would receive at least 20 percent of the statewide base per pupil amount for every at-risk and ELL student on top of the regular funding for that student

Districts whose populations have more than the statewide average of at-risk or ELL students (43.8 percent) could receive up to 40 percent of the base per pupil amount

The definition of at-risk is expanded to include students eligible for reduced-price or free lunches, not just free lunch as is the case now

Students defined as both at-risk and ELL would be given double weight

Statewide average per-pupil funding would move from the current $6,652 to an estimated $7,426, an 11.6 percent increase for total annual spending of about $6.5 billion on basic school operating costs.

But that system won’t go into effect unless voters pass Amendment 66, which would raise state income tax rates to generate an estimated $950 million in the first year. That’s projected to rise to $1.01 billion in 2015-16, when the SB 13-213 formula would kick in. Another key provision of the amendment would require that 43 percent of annual state revenues from income, sales and excise taxes be devoted to P-12 education.

At the big-picture level, there are two important things to remember about SB 13-213 and Amendment 66. First, the new system would significantly increase funding for some districts and provide more modest growth for others. Second, the new revenue basically would restore overall state and local per-pupil funding to the level of 2009-10, the funding high point that came just before the recession and declining state revenues forced about $1 billion in cuts to school spending.

Differences in funding for individual school districts are nothing new. The current funding formula, in place for about 20 years, weights individual district funding based on size, cost of living for staff and numbers of at-risk students.

Per-pupil district funding ranges from a low of $6,205 to a high of $15,472.

The new system would change the current weights, restricting use of a size factor to smaller districts and eliminating the cost of living factor, which tended to benefit wealthier districts. Instead, the new system would increase aid to districts with the highest concentrations of at-risk students and English language learners. Under the new formula per-student funding would range from $6,608 to $19,597.

A story of four districts

A look at four Denver area districts illustrates the effect of the new formula.

In the Denver Public Schools, with 76.6 percent at-risk students, per-pupil funding would rise from $7,045 to $8,131, a 15.4 percent increase.

To the west, Jefferson County, with 36.4 percent of its students considered at-risk, would see per-pupil funding rise from the current $6,486 to $7,112, a 9.7 percent increase.

The current difference in funding between the two districts is $559 per student; it would rise to $1,019 under the new system.

Per-pupil funding in Aurora, with an at-risk population of 71.7, would rise from $6,933 to $8,104, a jump of 16.9 percent.

To the south, the Cherry Creek district has 27.5 percent of its students classified as at risk. Its current per-pupil funding $6,576 would rise to $7,016, an increase of 6.7 percent increase.

So the current $357 gap between Cherry Creek and Aurora would rise to $988.

(SB 13-213 defines at-risk as students who are eligible for free and reduced-price meals.)

Concerns about the impact of the original SB 13-213 led to several compromises as the bill moved through the legislature last spring, with the key amendments adding more money for some districts.

What people are saying

While those changes didn’t turn every district leader into an unabashed cheerleader for the new system, there is generally wide support for Amendment 66 among administrators, because it would increase P-12 funding overall and because many educators see it as the state’s best shot at recovering some of the cuts of recent years.

Jeffco Superintendent Cindy Stevenson summed up the feelings of many in a comment during a recent panel discussion at the University of Colorado Denver.

“Amendment 66 will make a difference. It will make a bigger difference for Denver,”  she said in response to a question. “Am I excited about that? No. Do I understand that? Yes.”

Glenn Gustafson, chief financial officer for Colorado Springs District 11, says he hears comments about funding differences from other districts. “My rebuttal to that is, ‘Yeah, but you don’t have 56 percent free and reduced lunch. You don’t have the challenges we do.” District 11’s per pupil funding would increase 9.1 percent under the plan.

Diana Sirko, superintendent of the Glenwood Springs-based Roaring Fork district, said she also hears varying degrees of support in different districts. “A lot of it is, ‘What’s in it for our district and our children?’” Roaring Fork would see a 4.6 percent per-pupil increase. Neighboring Aspen would have a 2.5 percent cut on a per-pupil basis.

The Roaring Fork board recently endorsed Amendment 66, while the Aspen board is staying neutral.

This issue also has cropped up on the school board campaign trail.

During a recent candidate forum in Jefferson County, candidate Jeff Lamontagne said, “Schools in Colorado have been underfunded for a long time.” But he added, “As I go door to door I do hear concerns and questions” about how the new system would affect different districts.

His opponent, John Newkirk, said, “I would prefer that any money raised in Jeffco should stay in Jeffco. As written I oppose Amendment 66.”

Feelings about Amendment 66 seem to vary more widely among school board members, who as elected officials are sensitive to community divisions over the proposed tax increase.

“The mood is hesitancy and ambivalence,” said Urschel. “A lot of [boards] will perhaps not bring it to a vote.”

Chart“The majority of rural boards are staying neutral,” said Paula Stephenson of the Colorado Rural Schools Caucus. “I think it’s a difficult issue for everyone.” The caucus steering committee, however, voted Friday to endorse the amendment.

Boards in some larger urban districts have endorsed Amendment 66, including Denver and Aurora. The Boulder board also endorsed the proposal – but on a split 4-3 vote – while the neighboring St. Vrain board supported it unanimously. The Douglas County board opposes the amendment, and the Jeffco board hasn’t considered the issue. Cherry Creek has decided to remain neutral.

Among many school administrators there’s a feeling that SB 13-213 and Amendment 66 offer an opportunity that shouldn’t be missed.

“Is it perfect? No, but it is way, way better than the alternative,” said Sheridan Superintendent Michael Clough.

Cheyenne Mountain Superintendent Walt Cooper noted districts “have had different perspectives on some aspects of the amendment or Senate Bill 213 [but] we shouldn’t let the perfect get in the way of the better. … We’re not going to ever get to perfect.”

In the weeds on SB 13-213

Calculations are tricky

The per-pupil funding figures in this article provide estimates for comparison, and figures likely be different in 2015-16 when SB 13-213 would go into effect if Amendment 66 passes.

In some cases districts whose per-pupil funding would decline actually would see increases in what’s called Total Program Funding. That’s because of complex interactions between projected preschool and kindergarten growth and the weights used to give some small districts more money. In many instances districts have local tax overrides that provide funding not reflected in these figures.

SB 13-213 also proposes some additional funding, such as nearly $190 million for special education that could increase district revenues. However, the total for special education is dependent on the actual revenues generated by the amendment if it passes.

If you’re really curious about how the bill works, this CDE spreadsheet walks through the calculations for every district. It’s complicated – each district’s entry runs for 237 lines in the spreadsheet. See also this CDE primer on SB 13-213.

Recovering what was lost

As noted above, many district leaders support Amendment 66 partly because it would restore the estimated $1 billion in school funding lost during the recession and the resulting state budget cuts.

Average statewide per-pupil funding was $7,242 in 2009-10, the high-point budget year before the recession’s effects hit. SB 13-213 would provide a 2.5 percent increase.

But the effects would be uneven for individual districts, with some growing beyond 2009-10 levels and others not recovering what was lost. That’s because the SB 13-213 formula is different than the one used to allocated funds in the past.

Different funding for different districts

The first version of SB 13-213 would have cut funding for some districts because of the shift of resources to early education and to at-risk and ELL students. A series of three key compromises during legislative debates adjusted the bill’s formula to increase funding for the following districts. Based on how the new formulas applied to them, some districts received more than one kind of additional revenue.

Hold harmless funding – $37 million

Agate, Arikaree, Aspen, Bayfield, Campo, Cheyenne (Cheyenne County), Clear Creek, Cripple Creek, DeBeque, Durango, Gilpin, Hanover, Ignacio, Kim, Kit Carson, Norwood, Ouray, Parachute, Plateau, Platte Canyon, Primero, Rangely, Ridgway, Steamboat Springs and Telluride

Floor funding – $117 million

Academy, Adams 12-Five Star, Bayfield, Boulder, Branson, Brighton, Buena Vista, Cherry Creek, Cheyenne Mountain, Delta, Douglas, Durango, Elizabeth, Falcon, Florence, Fountain, Gunnison, Jefferson, Johnstown, Keenesburg, Lewis-Palmer, Littleton, Mesa Valley, Parachute, Poudre, Pueblo County, Rangely, St. Vrain, Salida, Steamboat Springs, Thompson, Widefield, Windsor and Woodland Park

Supplemental funding for at-risk students – $28.1 million

Adams 12-Five Star, Bayfield, Brighton, Buena Vista, Delta, Florence, Fountain, Jefferson, Johnstown, Keenseburg, Mesa Valley, Parachute, Pueblo County, St. Vrain, Salida, Thompson, Widefield and Woodland Park

Leaving money on the table?

SB 13-213 creates a formula for determining how much each district “should” contribute to total costs through its property taxes and how much the state should be responsible for. The formula uses property values, income of district residents and percentages of at-risk students.

Under that calculation, many districts are currently raising less local revenue than they could – about $81.8 million statewide. SB 13-213 does not reduce the amount of state money to such districts, but they theoretically could spend more money on their students – if voters approved local tax-rate increases.

The per-pupil figures in this article and the accompanying database are based on current levels of district support and would be higher if all districts paid their full local amounts. With full district support the average statewide per-pupil funding is estimated at $7,522.

The affected districts are:

Aguilar, Akron, Arikaree, Ault-Highland, Bayfield, Bennett, Bethune, Branson, Briggsdale, Burlington, Byers, Campo, Cheyenne (Cheyenne County), Colorado Springs 11, Cripple Creek, Crowley, DeBeque, Delta, Dolores (Dolores County), Dolores (Montezuma County), Durango, Eads, Eagle, Elbert, Falcon, Florence, Fountain, Fort Lupton, Gilpin, Gunnison, Hanover, Harrison, Hayden, Hi Plains, Hoehne, Idalia, Ignacio, Johnstown, Keenesburg, Kim, Kiowa, Kit Carson, Lamar, Lewis-Palmer, Liberty, Limon, McClave, Mancos, Manitou Springs, Manzanola, Mesa Valley, Miami-Yoder, Montrose, Mountain Valley, North Conejos, North Park, Norwood, Ouray, Parachute, Pawnee, Peyton, Plainview, Plateau, Plateau Valley, Platte Canyon, Platte Valley (Sedgwick County), Prairie, Primero, Pritchett, Rangely, Ridgway, Rifle, Roaring Fork, St. Vrain, Salida, Silverton, Steamboat Springs, Swink, Telluride, Thompson, Walsh, West End, Widefield, Woodland Park, Woodlin and Wray

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.