Tense night in Senate Ed

School finance fight takes on new intensity

PHOTO: Chalkbeat Colorado
Democratic Sens. Jessie Ulibarri (left) and Mike Johnston.

Sen. Mike Johnston Thursday night lost key parts of his Student Success Act to a bipartisan coalition in the Senate Education Committee, but he may have a chance to recover because House Bill 14-1292 now heads next to Senate Finance – which the Denver Democrat chairs.

Thursday’s developments added a new element of intrigue to the months-long tug of war over how much money to spend on reducing the state’s $1.04 billion school funding shortfall and how much to use for targeted programs like early literacy and services for English language learners.

A coalition of mainline education interests – school boards, administrators and teachers – has mounted a tireless campaign to reduce the shortfall (called the “negative factor” in statehouse lingo) and to resist targeted funding.

That lobbying paid off in the House, which increased the negative factor buy-down and watered down other elements of the bill.

Senate Education continued that process Thursday, voting for amendments that added to the negative factor reduction, further loosened the bill’s financial transparency requirements and reduced the amount of extra money that would be given to districts for implementation of the READ Act, which requires literacy evaluations of K-3 students and development of individual literacy plans for students who are lagging.

But the bill goes next to Senate Finance, which Johnston chairs and whose five members include Democratic Sens. Andy Kerr of Lakewood and Jessie Ulibarri of Commerce City, both Johnston allies on HB 14-1292. (Interestingly, Ulibarri officially was added as a co-prime sponsor of the bill only on Thursday morning.)

Asked by Chalkbeat Colorado if he intends to undo Thursday’s amendments in the finance committee, Johnston was diplomatic, saying only that  “We’ve got to take a look at what passed tonight. There’s work left to do.”

Johnston opponents clearly were taken aback by the committee assignment, and the committee took three breaks to huddle about the parliamentary question before voting 7-0 to send the bill to finance.

When the committee meeting adjourned after more than five and a half hours, district lobbyists huddled in the hallway outside the committee room, grousing about what had happened and noting that similar bills in past sessions hadn’t been routed to the finance committee before heading to Senate Appropriations.

Johnston was bested Thursday by a coalition of Sen. Nancy Todd, D-Aurora, and the committee’s three Republicans, Sens. Vicki Marble of Fort Collins, Scott Renfroe of Greeley and Mark Scheffel of Parker.

They successfully pushed through amendments that would:

  • Increase the money devoted to reduction of the negative factor to $120 million. (The reduction was $110 million in bill as it came from the House.)
  • Reduction of additional READ Act funding from the $20 million to $10 million. (Districts already receive $16 million a year for this program.)
  • Elimination of funding for a proposed state website that would link users to information about district and school spending. Instead, districts would post that data on their own websites.
  • Elimination of a proposed study of new enrollment counting methods by the Department of Education.

The Success Act is the 2014’s key education funding bill and originally was proposed by sponsors as a way to recover a few of the education reforms contained in Senate Bill 14-213, the comprehensive funding reform bill that never was implemented because voters didn’t approve the tax increase necessary to pay for it.

But HB 14-1292 has been steadily whittled down under that lobbying pressure from school districts and other interest groups intent on winning as large a reduction as possible in the negative factor.

House sponsors worked hard to meet concerns about the bill (see story), partly in hopes of reducing controversy and changes in the Senate. That obviously didn’t work.

Thursday’s extensive testimony touched on familiar themes, with school administrators and board members stressing the importance of reducing the negative factor and other witnesses urging spending on early childhood and English language learners.

Here’s the shape of the bill as it heads to finance:

  • Negative factor: The proposed reduction now is $120 million, up from the $110 million approved by the House. Sponsors originally included no reduction in pre-introduction versions of the bill.
  • Transparency: School districts would be required to post financial information, broken out by school, on their websites, but there would be no central website compiling information statewide. This $5 million has been a key item of contention between school districts on one side and bill sponsors and Gov. John Hickenlooper on the other.
  • Construction funding: HB 14-1292 proposed taking $40 million in marijuana tax revenues and diverting them to kindergarten construction, technology grants and charter facilities funding, instead of letting the funds flow into the main Building Excellent Schools Today construction program. A successful House amendment eliminated most of those earmarks but retained a 12.5 percent diversion to a fund for charter school facilities. Senate Education didn’t change this, despite testimony in support of doing so.
  • Charters: Also still in the bill is $13 million in additional funds that would be allocated for charter facilities, split between per-student grants to schools and supplementing a reserve fund that backs charter construction debt.

Here’s what was cut out of the bill or significantly changed as it’s moved along:

  • Implementation funding: $40 million in per-pupil aid to districts to help cover the costs of implementing education reforms such as new content standards, new tests and educator evaluations was eliminated in the House during negotiations over the negative factor.
  • Enrollment counting: There’s noting left in the bill about this.

Senate Education also considered amendments to House Bill 14-1298, the 2014-15 school finance act. A committee amendment removed a House proposal that $17 million in at-risk early childhood funding be focused on full-day kindergarten. Senate Education restored a provision that lets districts decide whether to use the money on preschool or kindergarten.

The Senate panel also voted for a modest increase in full-time kindergarten funding, under which those students would be paid for as .6 of a full-time student, instead of the current .58. The committee agreed to retain $30.5 million in additional funding for English language learner programs but moved that funding to a separate account that won’t be subject to the automatic annual increases required by the constitution for some types of school funding.

The next installment in this drama likely will come next Tuesday, when Senate Finance is scheduled to meet.


Colorado schools are getting a major bump in the state’s 2018-19 budget

Students waiting to enter their sixth-grade classroom at Kearney Middle School in Commerce City. (Photo by Craig Walker, The Denver Post)

Colorado’s strong economy has opened the door for state lawmakers to send a major cash infusion to the state’s public schools.

As they finalized the recommended budget for 2018-19, the Joint Budget Committee set aside $150 million, an additional $50 million beyond what Democratic Gov. John Hickenlooper had asked for, to increase funding to schools.

“We believe this is the most significant reduction in what used to be called the negative factor since it was born,” said state Rep. Millie Hamner, the Dillon Democrat who chairs the Joint Budget Committee.

Colorado’s constitution calls for per pupil spending to increase at least by inflation every year, but the state hasn’t been able to meet that obligation since the Great Recession. The amount by which schools get shorted, officially called the budget stabilization factor, is $822 million in 2017-18. Under state law, this number isn’t supposed to get bigger from one year to the next, but in recent years, it hasn’t gotten much smaller either. 

But a booming economy coupled with more capacity in the state budget created by a historic compromise on hospital funding last year means Colorado has a lot more money to spend this year. In their March forecast, legislative economists told lawmakers they have an extra $1.3 billion to spend or save in 2018-19.

The recommended shortfall for next year is now just $672.4 million. That would bring average per-pupil spending above $8,100, compared to $7,662 this year.

Total program spending on K-12 education, after the budget stabilization factor is deducted, should be a little more than $7 billion, with the state picking up about $4.5 billion and the rest coming from local property taxes.

The budget debate this year has featured Republicans pressing for more ongoing money for transportation and Democrats resisting in the interest of spreading more money around to other needs. The positive March forecast reduced much of that tension, as a $500 million allocation for transportation allowed a compromise on roads funding in the Republican-controlled Senate. That compromise still needs the approval of the Democratic-controlled House, but suddenly a lot of things are seeming possible.

“We knew we were going to have more revenue than we’ve ever had to work with,” Hamner said of the status at the beginning of the session. But that presented its own challenges, as so many interest groups and constituencies sought to address long-standing needs.

“The fact that we’ve been able to reach such incredible compromises on transportation and K-12 funding, I think most members will be very pleased with this outcome,” Hamner said. “Where we ended up is a pretty good place.”

The big outstanding issue is proposed reforms to the Public Employees Retirement Association or PERA fund to address unfunded liabilities. A bill that is likely to see significant changes in the House is wending its way through the process. The Joint Budget Committee has set aside $225 million to deal with costs associated with that fix, which has major implications for teachers and school districts budgets.

The Joint Budget Committee has also set aside $30 million for rural schools, $10 million for programs to address teacher shortages, and $7 million for school safety grants.

The budget will be introduced in the House on Monday. Many of the school funding elements will appear in a separate school finance bill.

Going forward, there is a question about how sustainable these higher funding levels will be.

“It does put more pressure on the general fund,” Hamner said. “If we see a downturn in the economy, it’s going to be a challenge.”

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.