School Finance

K-12 funding issues start to come into focus

The big issues facing K-12 funding were fully framed Wednesday for the legislative Joint Budget Committee, and staff analyst Craig Harper urged members to focus quickly on how to handle those questions.

Colorado Department of Education
Colorado Department of Education

In the wake of Amendment 66’s defeat, school finance is emerging as the top education issue for the 2014 legislature. School districts and some lawmakers are pushing for increases that would help restore some of the cuts of recent years.

But Gov. John Hickenlooper’s proposed 2014-15 K-12 budget suggests a relatively modest hike that basically covers just enrollment growth and inflation. The governor’s budget proposes more significant increases for higher education.

Harper met with the committee for four hours Wednesday during the members’ annual pre-session briefing on the governor’s proposed Department of Education budget for 2014-15. Harper’s presentation was based on a 139-page briefing paper prepared for the committee.

Harper made recommendations on some issues but didn’t make specific suggestions on others, noting they are weighty enough to require discussions between the committee and the department and decisions by the JBC and legislative leadership.

That sets up an interesting session on Dec. 19, when Colorado Department of Education officials will meet with the JBC to answer questions.

Here are the key points of the major issues raised during the briefing:

School finance

Harper suggested that the legislature needs to make key decisions on how much to spend on schools in 2014-15, how to balance that spending between the main general fund and the supplementary State Education Fund (SEF), how to maintain the health of the SEF over several years and how to reduce what’s called the “negative factor.”

During the recession, the legislature reinterpreted constitutional provisions that govern annual increases in school funding, deciding that those provisions applied only to base funding but not to the additional money used to adjust support to districts based on special needs. That mechanism, called the negative factor, allowed the legislature to spend less on schools than it otherwise would have. That gap now is estimated at about $1 billion.

Hickenlooper is proposing a $222 million increase in school funding for 2014-15 but no significant reduction in the negative factor.

The governor wants to take most of the increase from the SEF, something Harper disagrees with because he fears doing so will just put more pressure on the general fund in later years.

Many districts and education interest groups are pushing hard to reduce the negative factor. Harper’s briefing paper agreed that doing so would be a good thing to do – if lawmakers can find the money.

“Staff recommends that the committee and the General Assembly focus early discussions on the broader questions of how much to pay, how to finance any increases in appropriations, and whether to increase the minimum balance in the SEF. Staff recommends that the committee initiate discussions with legislative leadership, the education committees, and the governor’s ofice concerning those broader questions,” Harper wrote.

Harper also analyzed and made recommendations on several other education budget requests.


The Department of Education has requested $3.8 million (most of it from the SEF) for development and administration of new tests. (See this EdNews story for an update on those plans.

Harper’s briefing paper noted that many school districts are worried about being ready for online tests, particularly in 2015, and that there also are concerns about expected drops in achievement levels because of the transition and about the pressure of implementing multiple reforms. But he didn’t make specific recommendations about funding the request, suggesting committee members discuss the issue further with the department.

BEST program

The state’s Building Excellent Schools Today construction grant program is at a crossroads, given that it’s almost out of money for making large grants and because a recent state audit found problems with program administration (see this EdNews story).

Harper recommended that the legislature pass a law to make BEST’s smaller cash grants subject to legislative approval. Another panel, the Legislature Audit Committee, is expected to introduce a bill that would tighten up on BEST requirements for local school district matches.

Other budget issues

The department is requesting a $3.1 million increase and additional staff to beef up its computers and information technology unit to meet the demands of managing the avalanche of new data that will be generated by various reform efforts such as the new teacher evaluation system.

Harper agreed that additional money is necessary but suggested the committee discuss the issue further with the department.

Several lawmakers at Wednesday’s hearings also raised questions about CDE’s current independence from the Governor’s Office of Information Technology, which coordinates IT services for a number of other state agencies.

On another issue, Harper suggested that the state’s English language learners law needs a broad overhaul beyond the $430,000 the department is asking for to provide additional assistance to districts. (Such a bill is in the works.)

JBC vice chair Pat Steadman, a Democratic senator from Denver, agreed, saying, “the issue is far bigger than technical assistance.”

Another department request proposes spending $2.8 million from the SEF to cover continued funding of the early literacy assessment tool required by the state’s early literacy law. Harper again recommended the committee discuss this issue with the department and with leaders of the legislature’s two education committees.

What's fair

Colorado’s state-authorized charter schools could get more money next year

Students at The New America School in Thornton during an English class. (Photo by Nic Garcia)

Charter schools authorized at the state level by the Charter School Institute are likely to get more money in the 2018-19 budget year. That’s one year before most other charter schools will see benefits from last year’s charter school funding equity bill.

That bill was a major compromise out of the 2017 session, and it requires school districts to share money from voter-approved tax increases with the charter schools they’ve authorized, starting in 2019-20. The bill also created the mill levy equalization fund to distribute state money to the Charter School Institute’s 41 schools. Because no local school board approved these schools, they wouldn’t otherwise be eligible for revenue from these increases, known as mill levy overrides.

Charter School Institute administrators came calling for their money this year, though, with a request for $5.5 million from the general fund. They arrived at this number by identifying institute schools within the geographic boundaries of districts that already share some extra revenue with their local charters and assuming institute schools got a similar share.

Institute Executive Director Terry Croy Lewis called it a “first step” toward parity that would bring institute and district-authorized charter schools to the same level in advance of the new law going fully into effect in 2019. Lewis said it seemed like a fair approach because the parents at institute-authorized schools often live within the geographic boundary and pay taxes at the same rates as parents whose children go to traditional schools or district-authorized charters.

However, the charter equity bill says that extra money for institute schools has to be distributed on an equal per-pupil basis. The original approach, which created more equity among schools in the same geographic boundary, created more disparities among institute schools in different regions – and the law might not have allowed it.

“I don’t think you can define equity in this conversation because equity cuts a lot of different ways,” said state Sen. Dominick Moreno, a Commerce City Democrat and member of the Joint Budget Committee.

Budget analyst Craig Harper suggested to the Joint Budget Committee that separate legislation might be necessary to allow the distribution proposed by the Charter School Institute, something no lawmakers wanted to see after the bruising fight over the charter school equity bill.

Instead, the Charter School Institute revised its proposal to distribute the money among its schools on a per-pupil basis, regardless of geography and whether the local district already shares money.

What sort of difference does this make?

In the first distribution scenario, Early College of Arvada, located in the Westminster district, would have gotten nothing – because Westminster doesn’t currently share money with its own charters. Under the new proposal, the school would get $131,233 based on its pupil count. Meanwhile, Colorado Early College – Fort Collins, which would have gotten $621,357 because the Poudre district already shares money, would instead get just $374,952

Lingering confusion over the distribution question led JBC members to postpone a decision several times before they voted 4-2 this week to include the $5.5 million request in the 2018-19 budget.

It still has to survive the extended battle over the budget that takes place in the full House and Senate each year.

Living wages

More than 1,000 Memphis school employees will get raise to $15 per hour

PHOTO: Katie Kull

About 1,200 Memphis school employees will see their wages increase to $15 per hour under a budget plan announced Tuesday evening.

The raises would would cost about $2.4 million, according to Lin Johnson, the district’s chief of finance.

The plan for Shelby County Schools, the city’s fifth largest employer, comes as the city prepares to mark the 50th anniversary of the assassination of Martin Luther King Jr., who had come to Memphis in 1968 to promote living wages.

Superintendent Dorsey Hopson read from King’s speech to sanitation workers 50 years and two days ago as they were on strike for fair wages:

“Do you know that most of the poor people in our country are working every day? They are making wages so low that they cannot begin to function in the mainstream of the economic life or our nation. They are making wages so low that they cannot begin to function in the mainstream of the economic life of our nation … And it is criminal to have people working on a full time basis and a full time job getting part time income.”

Hopson also cited a “striking” report that showed an increase in the percent of impoverished children in Shelby County. That report from the University of Memphis was commissioned by the National Civil Rights Museum to analyze poverty trends since King’s death.

“We think it’s very important because so many of our employees are actually parents of students in our district,” Hopson said.

The superintendent of Tennessee’s largest district frequently cites what he calls “suffocating poverty” for many of the students in Memphis public schools as a barrier to academic success.

Most of the employees currently making below $15 per hour are warehouse workers, teaching assistants, office assistants, and cafeteria workers, said Johnson.

The threshold of $15 per hour is what many advocates have pushed to increase the federal minimum wage. The living wage in Memphis, or amount that would enable families of one adult and one child to support themselves, is $21.90, according to a “living wage calculator” produced by a Massachusetts Institute of Technology professor.

Board members applauded the move Tuesday but urged Hopson to make sure those the district contracts out services to also pay their workers that same minimum wage.

“This is a bold step for us to move forward as a district,” said board chairwoman Shante Avant.