priorities

With school finance act, Colorado lawmakers try to pass the hot potato of teacher pay to local districts

State Rep. Barbara McLachlan, a Durango Democrat, calls for more money for education during a rally with teachers and fellow Democratic members of the House Education Committee at the Capitol Monday, April 16. (Erica Meltzer/Chalkbeat)

A school finance act that puts more money into K-12 education than Colorado has spent at any point since the Great Recession passed a key House committee Monday with easy bipartisan support.

Democratic lawmakers on the House Education Committee urged local school boards to turn this money into teacher raises – and Colorado voters to provide even more funds next year.

The hearing on the school finance act occurred as hundreds of teachers descended on the Capitol as part of a day of action to ask for more school funding and protections for retirement benefits. Before the hearing started, Democratic committee members met with teachers in the foyer of the Capitol and joined them in chants of “not enough” and “no more B.S.,” a reference to the state’s budget stabilization or “negative” factor. That’s the difference between what Colorado spends on schools and what it’s constitutionally required to allocate, based on inflation and numbers of students.

A group of education advocates hopes to place a $1.6 billion tax increase for schools on the November ballot. Colorado voters have twice before rejected tax increases for education, most recently in 2013.

“We need to support our teachers, and we need to support our schools, and we need you to ensure not only that we pass the bills that we are bringing this session, but that we unite this November to ensure our kids are put first in Colorado,” said state Rep. Brittany Pettersen, the Lakewood Democrat who chairs the House Education Committee.

The school finance act, which provides more detail on the education funding already set aside in the 2018-19 budget, calls for a little more than $7 billion in total program spending in 2018-19, a 6.95 percent increase from this year. The state portion is $4.5 billion, a 10 percent increase from this year; local districts would provide $2.5 billion, a 1.4 percent increase.

In addition to mandated budget increases, the bill adds $150 million more for education. That leaves the negative factor at $672 million, the smallest it has been since this budget maneuver was created during the Great Recession.

Average per-pupil spending for 2018-19 will be around $8,137, a $475 increase from this year.

During the hearing, state Rep. Barbara McLachlan, a Durango Democrat, asked Matt Cook of the Colorado Association of School Boards why teacher raises seem to come last when districts get more money, and state Rep. Alec Garnett, a Denver Democrat, asked if the legislature needs to have more oversight of how districts spend state money. Colorado does not have a statewide teacher salary schedule, and districts have a lot of discretion on how they set their budgets.

“The people on the ground are hurting,” Garnett said. “They can’t meet their basic needs. And I want to help them, but it’s really your members who hold the key to their solution.”

Colorado consistently ranks in the bottom tier for school spending and teacher pay, and a recent study ranked Colorado last for the competitiveness of its teacher salaries.

Cook said school boards are acutely aware of how low pay hurts their ability to hire and keep teachers. The availability of more money from the state will be a factor in union negotiations currently underway in districts around the state, he said.

But districts have to balance teacher pay with a wide range of needs, including services for students learning English and students with disabilities that are not funded by the state at their full cost, he said.

“We recognize that a qualified, highly motivated teacher in the classroom is a major part of a child’s education,” Cook said. “We’re doing the best we can. Nobody wants to not pay teachers.”

School district representatives told the committee that a promising state budget forecast is already turning into more services for students. An official from the Adams 12 Five Star district said the district had increased interventions for students with dyslexia in anticipation of more state money, and a superintendent from the rural Hanover district said $30 million in extra funding for rural schools – first allocated last year and now extended for a second year – allowed him to hire a second science teacher and a school counselor.

State Rep. Jim Wilson, the Republican co-sponsor of the school finance act and a former district superintendent, said he could just as easily ask lawmakers why the entire $1.3 billion budget surplus isn’t going to schools.

“I won’t ask you to answer that because you already know the answer,” he said. “That’s the same situation that a school district finds itself in.”

The school finance act also:

  • Sends an extra $30 million to rural schools,
  • Creates 1,000 new spots for children with certain risk factors in publicly funded preschool and kindergarten,
  • Allocates money for English language learners based on the actual number of students at various levels of need, rather than dividing it based on a formula,
  • Calls for any general fund surplus at the end of this budget year to go into education next year,
  • Requires that the negative factor for 2019-20 not be any larger than it is in 2018-19.

The school finance act still needs to pass the full House before it goes to the Republican-controlled Senate.

Round up

What Colorado lawmakers did for and to schools in 2018

Jefferson County educators Joel Zigman and Elizabeth Hall march during a teachers rally for more educational funding at the Colorado State Capitol on Thursday, April 26. (Photo by AAron Ontiveroz/The Denver Post)

The Colorado General Assembly’s 2018 session ended with a down-to-the-wire compromise on pension reform that left some teachers feeling bruised, but Gov. John Hickenlooper said there should be no confusion. In a world of competing priorities, education came out ahead.

The 2018-19 budget puts more into K-12 education than the state has spent in years, and Republicans agreed to put ongoing taxpayer dollars into stabilizing the Public Employees Retirement Association system, something they had long resisted.

Making those investments is why lawmakers ended up budgeting far less money into transportation infrastructure, another top priority, than Republican leaders wanted.

“That money went to PERA and school teachers,” Hickenlooper said. “Let’s be bluntly honest about that.”

Hickenlooper, who began the session with a certain futility about increasing education spending, called it “pretty remarkable” that Colorado’s education funding shortfall is down to $672 million, when it was over $1 billion just a few years ago.

“We made major investments in K-12 education,” he said.

The education bills this year were not just about money. Lawmakers also took modest steps to address the teacher shortage, tightened up the school accountability system, made it a little easier for foster children to graduate from high school – and enabled more children from low-income families to take AP exams or just eat lunch at school.

Here’s a look at the education legislation that made it through this year:

School finance

A little more than $7 billion in base spending will go to K-12 education in 2018-19, a 6.95 percent increase from the current school year, with the state portion going up considerably more than the local share.

In addition to mandated budget increases, the bill adds $150 million more for education. That means Colorado fell $672 million short of its constitutionally required level of education funding, a gap known as the negative factor or budget stabilization factor. That gap is the smallest it has been since this budget maneuver was created during the Great Recession, but for some, its persistence is a major source of frustration.

Average per-pupil spending for 2018-19 will be around $8,137, a $475 increase from this year. That translates into millions of additional dollars for many districts. Lawmakers also sent an extra $30 million to cash-strapped rural districts and set aside $5.5 million for state-authorized charter schools to make up for local property tax revenue they don’t get.

This abundance was made possible by a booming state economy and a major compromise last year that eased the impact of constitutional restrictions on state spending. With teachers marching on the state Capitol, legislators urged local school boards to turn some of this new money into pay raises.

Two efforts to change how schools are funded failed to gain traction, though. One bill would have changed how Colorado shares money with school districts, giving much more weight to student characteristics like disability, poverty, and the need to learn English. It would have only gone into effect if voters approved a major tax increase in November.

A proposal to use incentives to get more school districts to ask voters to raise local taxes never even got introduced. It was one solution to the long-standing problem of unequal mill levies around the state, and its proponents hope that an off-season interim committee on school finance will consider it for next year.

Also going to an interim committee: some sort of fix to constitutional provisions that have had the unintended consequence of ratcheting down property taxes in rural districts.

Teacher shortage

Colorado lawmakers set aside $10 million and passed nine bills to address the shortage of teachers in some subjects and in many rural areas. The bills send $2 million to the Colorado Department of Higher Education to work with educator preparation programs and $3 million to school districts to design their own incentives to keep teachers. There are $10,000 fellowships and $6,000 stipends for rural teachers and a “grow your own” program that pays the final 36 credit hours for student teachers if they make a three-year commitment to a district.

There are also two bills that make it easier for teachers moving here from other states to get licensed and another that simplifies the background check process for student teachers.

Several hundred teachers are likely to benefit directly from these programs, but without money to raise teacher pay, especially in rural districts, the impact will be modest. Bills on loan forgiveness and improving school leadership – two strategies supported by research – didn’t pass.

Pension benefits

To address the unfunded liability in the public employee retirement system, legislators raised the retirement age to 64, increased employee contributions by 2 percentage points, and cut retirement benefits. They also boosted contributions from school districts by 0.25 percentage points.

The deal also promises that $225 million a year in taxpayer money will go into the public pension fund, something Republicans had long opposed.

The Colorado Education Association, the state’s largest teachers union, sees the compromise approved in the final hour of the 2018 session as putting too much burden on teachers.

Accountability

Struggling Colorado schools being monitored by the state will have to show more sustained improvement to avoid intervention under legislation passed this session. Requested by the Colorado Department of Education, this bill also clarifies the next steps after a school or district implements a state-ordered improvement plan, allows the state to step in earlier, and requires more communication with parents.

Lawmakers also approved changes to the READ Act, which requires schools to identify struggling readers in the early grades and provide additional support. The update seeks to ensure that schools are using appropriate materials and that they’re using money for its intended purposes. The law also creates a working group to study the READ Act plans developed by schools and recommend additional changes.

There were two changes to the factors schools use to reach state accreditation. One bill gives schools credit for the number of students who enlist in the military after graduation, similar to the credit they get for students who enroll in college, and the other gives schools credit for students who take Advanced Placement or International Baccalaureate classes or who enroll in college classes while in high school.

Colorado lawmakers also took an additional step to prevent schools from pressuring students to take state assessments, prohibiting the use of rewards like pizza parties or raffle tickets.

College credit

Colorado has had a big push in recent years to expand access to concurrent enrollment and AP courses, particularly for low-income students and students of color. Because the courses allow students to get college credit while they’re still in high school, they’re seen as offsetting some of the cost of college, allowing students to graduate with less debt.

Lawmakers created a $500,000 grant program to help high schools cover AP exam costs for students from low-income families. At $94 apiece, the cost can really add up, yet a passing score on an exam can excuse a student from an entire college course. A federal program that reduced the cost of the exam ended in 2017.

Legislators also continued an existing pilot program that pays rural school districts for every student who takes an AP class and exam. The goal is to encourage school districts with fewer resources to offer more college-prep courses.

Lawmakers also passed a bill that requires school districts to provide more information to students and parents about the benefits of concurrent enrollment options, along with deadlines and requirements.

At the same time, they voted to restrict the expansion of so-called “early college” high schools that allow students to stay in school a fifth and sixth year while taking college classes. These programs in Eagle County and Denver Public Schools are small now, but state budget writers feared that their expansion could put a strain on school finance.

Foster youth

Youth in foster care have the lowest graduation rates in the state, much worse than homeless youth. One bill makes it easier for these children to make it across the finish line. It provides money to pay for transportation to allow them to stay in their home school, and it also provides flexibility in graduation requirements.

This makes Colorado one of the first states to comply with federal requirements about providing school transportation for youth in foster care.

School security

After a deadly shooting in Parkland, Florida, students twice marched on the state Capitol, many of them calling for more gun control. In Colorado’s split legislature, gun control is a non-starter. Instead, lawmakers voted to set aside $30 million for school security. The money can be used to provide additional training to school resource officers who are already employed, to train school staff in crisis response, and to improve the physical security of school buildings. It can’t be used to hire new school resources officers, a provision drafted in response to advocates concerned about the criminalization of students of color.

Legislators also dedicated $5 million for interoperable radio systems to allow rural school districts to more directly communicate with emergency responders.

Schools will have to apply for grants to use this money.

Well-being

Colorado elementary school students who qualify for reduced-price lunch could already get the meal for free, thanks to a state program that picks up the 40-cent cost not covered by the federal lunch program.

A new law extends that benefit to middle school students. School nutritionists had seen a big drop-off in lunch participation in middle school, and they hope this program encourages more kids to eat at school. Advocates also hope it reduces the practice of “lunch shaming,” in which kids are denied hot lunch and given crackers or other small snacks to get their parents to pay outstanding lunch debt.

Lawmakers also made a small step to address youth suicide, the second leading cause of death of people aged 10 to 24 in Colorado. Grants will help schools train staff in recognizing the warning signs of suicide and in how to get help for children in crisis.

Early childhood

Lawmakers extended a tax credit for people who donate to child care centers. This credit, which allows donors to take half the value of their donation as an income tax credit, is an important incentive in the eyes of people who run these businesses.

Another bill created a licensing process for substitute early-childhood teachers that advocates hope will ease staffing shortages.

Of more significance to middle- and upper-class families, Colorado lawmakers expanded the income tax credit for child care expenses. Parents can take a percentage of their federal child care credit as a state tax credit. This bill raises the income limit to take advantage of this tax credit from $60,000 to $150,000 and increases the percentage of the federal credit that can be applied to state taxes.

Rural broadband

Money from a fund previously used to subsidize rural telephone service will be invested in broadband construction through 2023. Bringing high-speed internet to remote parts of Colorado is key to economic development and the provision of modern health care. It also will allow students in rural schools to use the same online resources that other students do. This is a long-standing priority of Hickenlooper, realized in his final year in office.

School construction and repair

Colorado will put more marijuana tax money into the BEST program, which gives out grants to school districts for building repairs and, occasionally, new buildings. A bill lifted a $40 million cap on marijuana excise tax revenue going to the program. However, the money won’t go as far as it could have because lawmakers are hesitant to borrow against pot money in an uncertain regulatory environment.

reality check

Colorado lawmakers’ pension compromise raises teacher retirement age, cuts benefits

Colorado General Assembly in the House of Representatives. (Photo by Joe Amon/The Denver Post)

In the final hour of the 2018 legislative session, Colorado lawmakers adopted a compromise plan they hope will bring solvency to the state’s public employees retirement system.

The deal that emerged from 12 hours of negotiations Wednesday was not the deal that many people expected to see when the day started. It raises the retirement age for new teachers from 58 to 64, requires public employees to put an additional 2 percent of their pay into the retirement system, and reduces cost-of-living raises for retirees. The Colorado Education Association said it shows a serious disregard for the thousands of teachers who rallied at the Capitol just weeks ago.

But the teacher rallies were far from the only political backdrop to the negotiations. This is an election year, and a Republican might be sitting in the governor’s office come January, namely Colorado Treasurer Walker Stapleton. His plan for the Public Employees Retirement Association system includes a freeze on cost-of-living increases for retirees until the fund becomes more financially stable, something that could take decades, and no additional taxpayer contributions.

That gave Democrats an incentive to get a deal done this year. And beyond politics, the problems with PERA only increase every year that more money doesn’t go into the system.

PERA is estimated to have an unfunded liability of between $32 billion and $50 billion, endangering retirement benefits down the road, along with the state’s credit rating.

The bill that passed commits $225 million a year in taxpayer money to shoring up the pension system, something long opposed by Republicans, as well as by Democratic Gov. John Hickenlooper. In an unusual late night appearance to lobby for the bill with skeptical Democrats, Hickenlooper stressed the significance of that compromise.

But last minute changes to the bill mean that the taxpayer contribution won’t increase over time. Instead, public employers – like school districts – will put in an additional 0.25 percent.

Colorado teachers can’t participate in Social Security, which means they rely on PERA benefits in retirement. Those are based on a percentage of what they made in their highest earning years, along with other factors. In 2016, the average pension for a school district retiree was $37,000. The bill freezes pensions for two years, then offers 1.5 percent cost-of-living raises, not the current 2 percent.

“We are very disappointed in our elected officials who did not support educators and retirees, and even chose to take money out of their pockets,” CEA President Kerrie Dallman said in a statement emailed after the vote. She called the bill “an unfortunate lesson in politics, reminding us that those in power who represent the people can still be completely tone deaf to their constituents. … This is bad policy done in haste.”

The version of the pension overhaul that passed the Republican-controlled Senate in March called for employee contributions to gradually go up 3 percentage points, to 11 percent, and for cost-of-living raises to go down to 1.25 percent. The version that came out of the Democratic-controlled House spared employees any increase in contributions. The $225 million taxpayer contribution was secured as a set aside in the budget process.

The final version was always going to be somewhere in the middle, but the reaction from Democrats indicates this deal was not the one they had in mind. Several lawmakers asked to be removed as co-sponsors from the legislation.

Brian Eason of the Associated Press reported that the teachers union was willing to accept a retirement age of 63, but no higher. The union lost that battle. The final bill still does not allow teachers to opt into a 401(k)-like defined contribution plan, something the union adamantly opposed.

House Majority Leader K.C. Becker, a Boulder Democrat and co-sponsor of the bill, pleaded with her colleagues to think of the long-term problems that need to be solved.

“We have to reform the system in a way that spreads the burden and has shared sacrifice,” she said. “Some people are not happy that there’s an additional taxpayer contribution. Some people are not happy that there’s an additional employee contribution. But the system is not going to fix itself.”

She said a no vote was a vote to “leave a $32 billion problem unaddressed.”

On the floor of the House, with the clock ticking down, no Democrats argued against the bill, but 25 of them voted against it, including Speaker of the House Crisanta Duran and every Democratic member of the House Education Committee.

On Thursday morning, Duran said she thought the retirement age and the employee contributions in the bill were too high.

“These are tough conversations,” she said. “PERA could have been solvent without the proposal that was passed last night. There were some things they didn’t have to push as hard.”

Some conservative Republicans also voted no in the House – they don’t think this bill does enough to fix the public pension system. But over in the Senate, where state Sen. Jack Tate of Centennial led negotiations, the GOP presented a unanimous bloc of yes votes. All 11 no votes came from Democrats.

Senate Majority Leader Chris Holbert, a Parker Republican, said that the PERA bill represented a compromise for both sides, and he had no criticism of it after all the effort that went into making a deal.

“I see folks on the right saying it doesn’t go far enough, and I heard that people from the teachers union were quite upset,” he said. “In a split legislature, I don’t know how much better it could have got done, but it got done.”

This story has been updated with comments from House and Senate leadership.