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School Funding

Update: Learn about proposed updates to Colorado's school funding system in 2024.

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 by which the state allocates dollars to school districts remains largely unchanged since 1994, meaning investments are not strategically targeted to meet the diverse and changing needs of Colorado’s students nor the workforce they will enter.

Time for a Change

The opportunity to overhaul our state’s school funding system 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 that has 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, 2021, and 2022, we must now prioritize the development of a distribution formula that targets investments to meet the needs of all students. Colorado needs a formula that accounts for the unique challenges posed by poverty and geography, among other factors.

children reading books in a class

Recent Policy Successes: K-12 Revenue System 

SB22-202 (Zenzinger & Rankin/ McCluskie) State Match for Mill Levy Override Statute makes a targeted state investment in low-wealth school districts that constantly struggle for adequate funding to meet student needs. The bill creates a Mill Levy Override Match Fund, which will recognize local, voter-approved property tax investments and meet that effort with a state match on a sliding scale. 

HB21-1164 (Esgar & Garnett/Zenzinger & Fenberg) Total Program Mill Levy Tax Credit and SJR 21-006 (Esgar & Garnett/Zenzinger & Fenberg)Interrogatory Regarding School Dist Mill Levies 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.  

SCR20-001 (Esgar & Soper/Tate & Hansen) Repeal Property Tax Assessment Rates referred a question to voters to repeal a constitutional amendment that forces permanent property tax cuts to residences. Repealing the amendment was 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 in 2020.


Make Investments that Make a Difference

Colorado must update the ways we allocate tax dollars through our funding formula to be more responsive to the challenges facing our students today. School funding is associated with children’s access to important learning resources, such as research-based support and interventions, improved student-to-teacher ratios, and teacher pay. A growing body of research demonstrates the impact of targeted investments based on student needs on improved student outcomes. 

Recent Policy Successes: K-12 Funding Formula and Investments in Kids 

SB23-287 (Zenzinger & Lundeen/McLachlan & Kipp) Public School Finance Act creates a task force of school finance experts to deliver specific recommendations for a modernized, equitable, and student-centered school finance formula by January 2024. The School Finance Act also fully funds the Mill Levy Override Match Fund, which supports school districts that struggle to raise local revenue to meet student needs due to low property wealth.

While these are exciting wins for public education, Colorado’s School Finance Formula is still very much outdated, inequitable, and not serving the needs of students throughout the state. Policymakers must do more to prioritize student learning needs rather than maintaining an inequitable status quo.

HB22-1202 (Herod & McCluskie/ Zenzinger & Coleman) School Finance Student Poverty Measure establishes a process for creating a new measure to identify students at risk of poor academic outcomes due to economic disadvantage. This will shift Colorado away from relying on the submission of free and reduced-price lunch eligibility forms as the state’s only proxy for poverty, and allow the state’s school funding formula to more accurately and adequately allocate resources to serve students. 

SB21-268 (McCluskie & McLachlan/Lundeen & Zenzinger) Public School Finance made 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.  

HB21-1325 (McCluskie & Herod/Zenzinger & Rankin) Funding Public Schools Formula created a Legislative Interim Committee on School Finance to improve and make more student-centric the state’s allocation of education funding.   

HB19-1262 (Wilson & McLachlan/Bridges) State Funding for Full-day Kindergarten provides funding for full-day kindergarten for any Colorado family that chooses it.  

HB19-1171 (Michaelson Jenet/Fields & Priola) Expand Child Nutrition School Lunch Protection Act and SB18-013 (Fields & Gardner/Michaelson Jenet) Improving Access to Affordable School Lunch 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.