School Finance Reform

Much about Colorado kids, families and communities has changed since the early 1990s. One thing that has remained the same? Colorado’s system for funding its schools. The formula remains largely unchanged since 1994, meaning investments are not strategically targeted to meet the diverse and changing needs of Colorado’s students or the workforce they will enter. That leaves many districts and schools struggling to keep up the pace with what our kids need today, leading to perpetual inequities across the state.

children reading books in a class

Time for a Change

The opportunity to overhaul how Colorado funds schools presents a once-in-a-generation opportunity to reimagine the potential of our education system. In our current system, many children enter school unprepared to succeed, and achievement gaps widen as they progress, resulting in poor academic performance, grade repetition, expensive remedial services, and high rates of school dropout.  This is because, in part, Colorado continues to finance public education with a funding formula with no demonstrable link to the costs of delivering a rigorous education. How many more of our students would reach their full potential if we allocated dollars in fundamentally different ways to support them? With policy success reforming Colorado’s K-12 revenue system in 2020 and 2021, we must now prioritize developing a distribution formula that targets investments to meet the needs of all students and accounts for the unique challenges posed by geography and poverty, among other factors.

 

Recent Policy Successes

HB 21-1164 & SJR 21-006 correct a long-standing error in the state’s property tax system for funding public education, equalizing tax rates and allowing for hundreds of millions of additional dollars to be allocated to Colorado’s students over time. 

SCR 20-001 referred a question to voters to repeal a constitutional amendment that forces permanent property tax cuts to residences. Repealing the amendment is expected to increase property tax revenue for local governments and reduce the state aid requirement for school funding. The referred measure, Amendment B, successfully passed. 

 

Make Investments that Make a Difference

Colorado must make updates to the ways we actually allocate our tax dollars through our funding formula to be more responsive to the challenges facing our students today. At the outset, it is critical to recognize that funding and other resources are necessary but not sufficient for providing high-quality educational opportunities. School funding is associated with children’s access to important learning resources, such as improved class sizes, student-to-teacher ratios and teacher pay. In recent years, the public debate has shifted from does money matter to where money matters. A growing body of research shows the clear link between targeted investments based on student needs and improved outcomes.

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For low-income students especially, adequate school funding is a game changer. Poverty has extensive and damaging impacts on a student’s ability to learn—but adequate investments can help mitigate these effects. States and districts that invest more in schools tend to see stronger academic performance among students in poverty. The achievement gap in Colorado between low-income students and their higher income peers is significant across subject areas, and low-income students make up a large portion (41%) of the student population. 

This means we must create a more student-centric distribution formula that prioritizes the services students need to be successful by strategically investing in increased supports for students living in poverty, learning English, or requiring special education services, among other changes. Modernizing our school funding system also requires structural changes: making the formula more transparent and understandable, updating the student count system, accounting for and equalizing differences in property wealth and ability to raise local revenue across districts, and ensuring funding fairness regardless of public school type. 

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Recent Policy Successes

SB 21-268 makes historic investments in students by expanding the “at-risk” formula factor to include students eligible for reduced-price lunches (not just those eligible for free lunch), and creating a new weighted factor for English Language Learners. It also restores funding to essential grant programs that were cut in response to the pandemic. 

HB 21-1325 creates a Legislative Interim Committee on School Finance that must address specific issues to improve and make more student-centric the state’s allocation of education funding.  

HB 19-1262 provides funding for full-day kindergarten for any Colorado family that chooses it. 

HB 19-1171 & SB 18-013 eliminated the lunch co-pay for middle and high school students eligible for reduced-price lunch. With these changes, Colorado no longer charges reduced-price lunch copays in public schools, removing barriers to nutritious meals for thousands of students and their families.