Legislative Preview 2016

Lawmakers face tricky choices on education funding, data privacy and more

Colorado’s 100 lawmakers return to the Capitol this week facing a budgetary squeeze and some important unfinished education business.

The budget is expected to dominate debates this year. Many lawmakers are looking for a way to work around constitutional restrictions that may require taxpayer refunds even as some state programs face cuts. The outcome will carry important implications for school districts and state colleges and universities.

Beyond money, protection of student data already is teed up to be a major education issue this session, as it was last year. Testing, school ratings and teacher evaluation also are expected to be in play.

Some Capitol observers think 2016 could be as busy as the 2015 session, when nearly 120 education-related bills were introduced. The vast majority died.

The Capitol cast of characters looks much the same as 2015. Republicans hold a one-vote majority in the Senate while Democrats control the House. The membership of the House and Senate education committees remains largely the same.

Lawmakers are more seasoned than last year, when a fifth of the 100 members were freshmen. But 2016 is an election year, which creates partisan dynamics that can make compromise harder.

Handicapping a legislative session is tricky, but here’s a look at the education issues taking shape for 2016.

The big issues

Budget & school finance

“Our budget is our biggest challenge this year,” Democratic House Speaker Dickey Lee Hullinghorst of Boulder told reporters at a recent briefing. “We are going to have to cut education this year if we don’t find a solution.”

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Gov. John Hickenlooper’s proposed 2016-17 budget includes such cuts, including a $50 million increase in the K-12 “negative factor.” That’s the formula the legislature uses to reduce school funding from what it otherwise would have been in order to balance the overall state budget. The budget also calls for a $20 million cut in higher education support and recommends that college and university boards be free to raise tuition rates as they see fit.

Here’s the dilemma lawmakers face: A formula mandated by the state constitution limits annual increases in spending. Revenues that exceed the limit are supposed to be refunded to taxpayers, and that’s the situation Colorado now faces.

Those revenues include both taxes, which can spent at the legislature’s discretion, and various revenues called “cash funds,” which generally can be used only for specific purposes.

A $750 million chunk of cash is generated by something called the hospital provider fee, which is used to support the Medicaid program.

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Hickenlooper and Democratic leaders want the legislature to change the provider fee so that it doesn’t count against the revenue limit, freeing up tax revenues for spending on things like transportation and education and eliminate the requirement for taxpayer refunds.

But Republican leaders last week hardened their opposition to reclassifying the provider fee, casting new doubts on whether a deal can be struck.

Education advocates also are eying another pot of money as a way to ease the pressure on school and college funding.

Total school funding — $6.2 billion this year — comes from a combination of state and local tax money. If there’s more local revenue than projected, the state is able to reduce its share. District property tax revenues are higher than projected last spring, and enrollment is down, meaning the state could cut its contribution by about $159 million in the middle of the current school year.

Districts will fight to keep that money for their budgets, but some lawmakers will argue that state support should be cut for the current year so the money can be saved for the 2016-17 budget.

Both Republicans and Democrats are pledging to keep the negative factor at is current $855 million.

“It will not be my intention to let the negative factor grow,” said Rep. Millie Hamner, D-Dillon at a recent legislative forum sponsored by Chalkbeat. (Listen to the audio of that event.) She’s the chair of the Joint Budget Committee and will be a sponsor of the 2016-17 school finance bill.

Many observers are skeptical there will be major movement on school finance.

“It’s just very bleak, how we are going to fund education,” said Jane Urschel, deputy executive director of the Colorado Association of School Boards.

Data privacy

The spread of online testing, use of new tools to evaluate the readiness of preschool and kindergarten students and the proliferation of classroom apps have generated a lot of anxiety among some parent groups and policymakers.

A bill intended to impose greater privacy and security requirements on software and service vendors died in the 2015 session after lawmakers couldn’t reconcile a stronger Senate bill with a somewhat softer House version.

The issue is back this year, with Republican Rep. Paul Lundeen of Monument and Democratic Rep. Alex Garnett of Denver trying to reconcile the wishes of parents, school districts and the software industry.

The key questions are disclosure of what data is collected, how it’s protected, whether it can be sold or shared, how long student data is retained and whether personal information about individual students can really be protected when data is aggregated.

Any legislation on data privacy will need to walk a fine line between protecting student privacy and not stifling educational innovation. “This is an extremely heavy lift,” Lundeen said.

Sen. Chris Holbert, R-Parker, was the author and would-be broker of last year’s unsuccessful data privacy bill. He’s not closely involved in the issue this year, but feels, “We have a better chance.”

Garnett, Lundeen’s partner in the effort, said the state “can’t go another year without putting some guardrails” on data privacy.

Testing, ratings & evaluation

There’s rising chatter about assessments and how test results are used, but no big initiatives have jelled yet.

Here are the key questions in the air:

  • Will the legislature revisit testing issues in 2016, perhaps sparked by the controversy over whether SAT tests should replace ACT tests that have been given to all high school juniors?
  • Will recent changes in federal education law – the new Every Student Succeeds Act – prompt lawmakers to try to take advantage of the additional flexibility the federal government has given states?
  • Will there be moves to extend current timeouts in use of state testing data for rating districts and schools and in evaluating teachers?
  • Will the relatively high rate of opting out of last spring’s PARCC tests raise doubts about the reliability of that data in rating schools and evaluating teachers?
A sixth-grader in Sheridan takes part in a PARCC practice session in March 2015.
PHOTO: Craig F. Walker, Denver Post
A sixth-grader in Sheridan takes part in a PARCC practice session in March 2015.

There’s talk about testing bills, including proposals to eliminate 9th grade testing and perhaps pull Colorado out of the PARCC tests. A couple of legislators say they’re “looking into” the switch to SAT tests for 11th graders, which is all but certain to be delayed until spring 2017.

But it’s unclear whether such ideas will go very far.

“I don’t think there will be a lot stomach in the legislature to deal with more testing bills,” said Sen. Andy Kerr, D-Lakewood.

A similar air of uncertainty hangs over possible changes to the accountability and evaluation systems.

There likely will be bills to exempt teachers in early elementary grades and nationally board certified teachers from some provisions of the teacher evaluation law. There’s also talk of trying to change the current law’s requirement that 50 percent of teacher evaluations on student academic growth.

Whether lawmakers tackle those issues in a serious way may depend on how they look at the reliability of last spring’s PARCC testing results.

In a recent meeting with lawmakers, interim education Commissioner Elliott Asp defended the PARCC exams as “well designed” and “valid.” But he acknowledged “what makes the data questionable” for use in rating districts and schools is the participation rates.

The testing law passed last year requires the Department of Education to recommend to the legislature’s education committees whether the accountability timeout should be extended, based on whether test results can be used fairly. The department hasn’t yet made a recommendation.

Colleges also face a money pinch

School districts would receive an increase in funding next year under Hickenlooper’s budget, even they wouldn’t get all the money they want because of the proposed increase in the negative factor.

In contrast, state colleges and universities would take an actual cut of $20 million in their state support.

During meetings with the Joint Budget Committee last week, college presidents gently suggested that lawmakers find money to avoid those cuts. But higher education leaders are realistic about what’s possible.

“If there’s a cut, let’s just take the cut and move on,” said University of Colorado President Bruce Benson.

Tuition increases, the inevitable side effect of state budget cuts, likely will the big higher education issue of 2016. The Hickenlooper administration is proposing that college trustees be given full discretion to raise tuition. A 6 percent annual cap on tuition hikes imposed by lawmakers two years ago is expiring.

Statehouse observers expect bills to set a new cap will be introduced. “It’s low-hanging fruit,” said one lobbyist.

Other issues to watch

Despite perennial promises to restrain themselves, lawmakers love to introduce bills about schools. Here’s a sampling of other issues that are being bandied about at the Capitol:

Charters – Lobbyist Dan Schaller of the Colorado League of Charter Schools said the group is looking at a legislative package to deal with charter funding inequities. Schaller said the league hasn’t decided what it might propose on the touchy issue of districts’ authority to authorize charters. A measure to reduce those powers died last year.

Concurrent enrollment – More than 20,000 Colorado high school students take college classes, and some lawmakers would like to boost that number. Lundeen said he’s planning a bill on the issue. The trick is figuring out how to split student funding between school districts and community colleges.

Construction – State aid for building and renovating schools has plateaued ever since the Building Excellent Schools Today program reached its annual cap on debt repayments a couple of years ago. BEST board members are pushing for an increase in that $40 million cap. They may get a sympathetic ear, because some lawmakers now are more comfortable with the stability of marijuana tax revenues, a small portion of which go to BEST.

Early education – Recent efforts to increase funding for the state preschool program and for full-day kindergarten have fallen afoul of budget realities. That doesn’t mean the issue won’t be debated again this year as both Wilson and Kerr promise bills on full-day kindergarten.

School safety & district liability – The 2015 legislature passed a law that make school districts liable, in some cases, for violent acts committed on school grounds. Districts were nervous about the idea from the start, even the law doesn’t fully go into effect until next year. A legislative study committee took a lot of testimony about the law over the summer but recommended no changes. Districts still want more specificity about what they should do to keep students safe, but it’s unclear if legislation will be proposed or be successful this year.

Teachers – Expect to see a bill to change the current law requiring mutual consent for placement of teachers in schools. This has been a sore subject for teachers unions, particularly in Denver, for five years. But previous attempts to change this portion of the teacher evaluation law have gone nowhere. And heightened worries about teacher shortages, particularly in rural districts, are expected to prompt legislation intended to help teacher recruitment and retention. This is another issue where lack of money may stymie meaningful action.

But wait, there’s more …

Here’s a quick list of other education ideas and issues that are in the air as the session prepares to kick off: Reduction of the paperwork and data reports districts have to file with CDE, expansion of blended learning opportunities, possible tweaks to current school readiness and graduation guidelines requirements, a bill on suspension and expulsion of children in early grades, resident tuition eligibility for homeless students, STEM and career and technical education, adjustments to the breakfast-after-the-bell law, changes in regulation of multi-district online schools, tax credits for donations to private school scholarships and limits on campaign contributions to school board candidates.

If most of those sound familiar, they should. Almost every education issue in play this year has been kicked around in previous sessions. Of course, most of those bills have died, which is why they’ll be back this year. Hope springs eternal at the Capitol.

Need to refresh your memory about what lawmakers did and didn’t do last session? Check this article.

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.