Here we go again

Lawmakers go back to class on school funding

More than a quarter of Colorado’s 100 lawmakers are finding time in their frantic schedules for a deep look at one of the Capitol’s most head-hurting issues – how to pay for schools.

Rep. Millie Hamner says the formal effort by three committees is a way of “stepping back, regrouping” on a difficult subject. By educating a wide group of lawmakers, “Hopefully we’ll have some sense of buy-in about what needs to be done.” The Dillon Democrat is chair of the Joint Budget Committee and promoted the idea along with a budget panel colleague, GOP Rep. Bob Rankin of Carbondale.

But some people who follow school finance are at least somewhat skeptical of the effort and worry it might provide an opening for proposals to redistribute existing K-12 support rather than finding a way to increase school funding.

“Dividing inadequate revenue in different ways doesn’t look very appealing to us,” said Boulder Valley Superintendent Bruce Messinger. Specifically, some district leaders fear that the legislature may consider shifting state support among districts to increase funding for poorer districts.

The six-week effort kicked off Wednesday with a joint meeting of the JBC and the legislature’s two education committees. Combined, the three panels have 26 members.

School funding’s been studied more than once

There’s been no lack of school finance studies in recent years. A special legislative panel studied it in 2009, and an effort spearheaded by the Colorado Children’s Campaign took on the issue in 2012.

Two lawsuits that challenged aspects of the finance system, the Lobato and Dwyer cases, produced reams of documents and data about K-12 funding.

Both the Colorado Supreme Court rejected those challenges, and voters defeated proposed statewide tax increases to fund schools in 2011 and 2013.

So Colorado continues to allocate money to school districts according to a formula created in 1994 and a constitutional amendment passed in 2000. And school funding continues to be squeezed by the vagaries of the annual state budget process and by the negative factor. That’s the mathematical device the legislature uses to reduce school funding from what full application of the finance formula would provide.

The Supreme Court last fall ruled that the negative factor was constitutional, dashing the hopes of people who wanted a court-ordered solution to underfunding.

Funding equity a rising concern

The last couple of years have seen a new wrinkle to the debate – funding equity.

The current funding formula does provide districts additional funding based on numbers of at-risk students and to very small districts. Money also is allocated based on cost of living for staff, a factor that benefits all kinds of districts but not necessarily poor ones.

Critics feel the formula doesn’t provide enough extra money to districts with high percentages of poor students and English-language learners, the kinds of students that need more intensive instruction.

A law passed in 2013 would have provided more money to such districts, but it never went into effect because voters defeated the tax increase needed to pay for it.

Another piece of the equity puzzle are local property tax revenues called “mill levy overrides.” Those are additional taxes approved by a district’s voters.

Those revenues aren’t included in the state funding formula so are purely “extra” money for districts that have them.

Some lawmakers have noted that the statewide total of override revenues, about $826 million, is very close to the current state funding shortfall of $855 million. That’s the negative factor.

In a December briefing paper prepared for the JBC, staff analyst Craig Harper noted, “With the inclusion of override revenues, 58 school districts … were funded at or above pre-negative factor levels in FY 2014-15, some of which were well above that level. An additional 58 school districts offset at least a portion of the negative factor reduction with override revenues. Finally, 62 districts did not collect override moneys and absorbed the full 13.0 percent negative reduction in FY 2014-15.”

Override revenues are not evenly distributed and vary widely by district. Some districts don’t have them at all.

District leaders fear some lawmakers may be interested in placing a greater reliance on local revenues, perhaps going so far as to reduce a district’s state funding by the amount of its override revenues.

“Recalibrating the process would create a lot of tension,” Messinger said. Others agree such a change would trigger a serious political backlash from districts.

While some statehouse observers used the terms “rearranging the deck chairs” and “Groundhog Day” when asked about the study, others think it will hold educational value for lawmakers.

“It’s a great chance to start a conversation,” said Sen. Mike Johnston, D-Denver. The last time lawmakers took a truly in-depth look at school finance was 2013, when Johnston pushed through his proposed rewrite of the funding formula.

Normally, he noted, committees are preoccupied with debating and voting on bills and “don’t have time to absorb detailed content.”

Study kicking off with experts

This week’s first meeting of the three committees featured a briefing by Marguerite Roza, a school finance researcher and consultant from Georgetown University and the Center on Reinvesting Public Education. She focused on ways to improve school productivity and target financial resources more closely on student achievement. (See her presentation below.)

Interestingly, Roza didn’t mention key Colorado problems — the constitutional limits on raising taxes and on annual spending increases and the negative factor. Roza recommended shifting more funding to at-risk students. But the negative factor has reduced the amount of money available for such extra support.

The speaker at the Feb. 17 meeting is Andrew Reschovsky, a University of Wisconsin expert of property taxes. The committees hope to wrap up their business with a final meeting on April 13.

Learn more about school finance in Chalkbeat’s archive.

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.


Aurora’s superintendent will get a contract extension

Aurora Public Schools Superintendent Rico Munn. (Photo by Andy Cross/The Denver Post)

The Aurora school board is offering superintendent Rico Munn a contract extension.

Marques Ivey, the school board president, made the announcement during Tuesday’s regular board meeting.

“The board of education believes we are headed in the right direction,” Ivey said. Munn can keep the district going in the right direction, he added.

The contract extension has not been approved yet. Munn said Tuesday night that it had been sent to his lawyer, but he had not had time to review it.

Munn took the leadership position in Aurora Public Schools in 2013. His current contract is set to expire at the end of June.

Munn indicated he intends to sign the new contract after he has time to review it. If he does so, district leaders expect the contract to be on the agenda of the board’s next meeting, April 3, for a first review, and then for a vote at the following meeting.

Details about the new offer, including the length of the extension or any salary increases, have not been made public.

Four of the seven members currently on the board were elected in November as part of a union-supported slate. Many voiced disapproval of some of the superintendent’s reform strategies such as his invitation to charter school network DSST to open in Aurora.

In their first major vote as a new board, the board also voted against the superintendent’s recommendation for the turnaround of an elementary school, signaling a disagreement with the district’s turnaround strategies.

But while several Aurora schools remain low performing, last year the district earned a high enough rating from the state to avoid a path toward state action.