Colorado schools likely won’t see big increase in revenue as once hoped

It’s become increasingly apparent in recent weeks that the state’s schools would receive only a modest funding increase next year, and that fact was underlined with Tuesday’s introduction of the annual school finance bill.

The measure proposes only a $25 million reduction in the state’s school funding shortfall, commonly known as the negative factor. The shortfall currently is about $880 million.

“That’s our starting point,” said Rep. Millie Hamner, D-Dillon. She’s the House prime sponsor and a member of the Joint Budget Committee.

The $25 million is a far cry from the $200 million one-year cut in the negative factor originally proposed by Gov. John Hickenlooper. It’s also far below the additional $70 million urged by the state’s superintendents for at-risk students and rural districts.

The bill would set what’s called total program funding at $6.23 billion next year, up from $5.93 million in the current school year. (Total program is the combination of state and local revenues used to fund basic classroom and administrative functions.)

Senate Bill 15-267 was introduced late Monday and is the second piece of legislation needed to provide annual school funding. Base support, including constitutionally required increases to cover inflation and enrollment growth, is contained in the annual state budget, Senate Bill 15-254.

In past years the school finance bill has been used to enrich school funding beyond the amount in the state budget, but it doesn’t look like that will happen this year.

Hopes for a bigger cut in the negative factor have been blighted by the state’s paradoxical financial situation. A healthy economy is driving higher state tax collections and other revenues, but that income has pushed the state above the annual spending limit imposed by the Taxpayer’s Bill of Rights. That triggers refunds to taxpayers.

Introduction of the finance bill disappointed but didn’t surprise education interest groups. Some lobbyists feel schools are lucky to get the $25 million while others want the legislature to try to do more for districts.

Hamner said she hopes some additional funds can be found so “we can do some one-time spending” on education needs. “There could be some changes,” she said, acknowledging that the bill probably won’t see any big increases.

The legislature has some options for freeing up revenue that could be used for schools, but the odds of that happening may be long, given that only three weeks remain in the 2015 session.

Both tax collections and income from various fees drive state revenues above the TABOR limit. One large source of cash funds called the hospital provider fee generates money for Medicaid programs. There’s been talk of redefining those revenues so that they don’t count in the TABOR formula, but no such bill has been introduced yet.

“There are still pieces in motion that could affect” school finance, Hamner said.

See the link on this page for a spreadsheet listing how SB 15-267 would affect individual school districts. Read the bill here.