Call to action

Hickenlooper calls for “common sense” plan to fund Colorado schools

PHOTO: Andy Cross, Denver Post
Gov. John Hickenlooper delivered his State of the State speech on Jan. 11.

Gov. John Hickenlooper called on leaders from both parties Thursday to find a “common sense” plan to fund the state’s schools.

Hickenlooper, in his second-to-last State of the State address, described it as the only way the state can close the gap between its low-performing students and its high achievers.

“Closing the gap means giving students a solid foundation for success at every step of their education, as they move from preschool through K-12, toward college, certificate, or apprenticeship and onto a good job,” Hickenlooper said. “Part of that work includes a common sense plan to fund education.”

Although Hickenlooper did not describe possible solutions, his call for lawmakers to take on the issue is significant, lawmakers and advocates said.

“Calling it out, on his part, is raising the issue and challenge,” said Rep. Millie Hamner, a Democrat from Frisco and a member of the state’s Joint Budget Committee, which writes the state budget.

Hamner said she especially appreciated Hickenlooper spotlighting that the share of local property taxes that fund public schools is expected to shrink by about $170 million this year.

The amendment, approved by voters in 1982, maintains a constant ratio between the residential property taxes and from business property taxes. When revenue from personal property taxes surpasses a threshold, the state must reduced the rate at which property is taxed to reset the ratio. That’s expected to happen this year.

School funding advocates received Hickenlooper’s speech tempered optimism.

“We’re gratified when the importance of adequately funding education is elevated,” said Lisa Weil, executive director of Great Education Colorado, a nonprofit that advocates for better school funding. “Now we need bold and visionary action by our elected leaders.”  

Before the session started, Weil’s group called on lawmakers and the governor to send more money to schools. Great Education Colorado is also leading a diverse group of education officials and other civic leaders considering a push to get a school funding measure on the 2018 ballot.

Following Hickenlooper’s speech, Senate President Kevin Grantham, a Canon City Republican, said he agreed that the Gallagher Amendment was damaging the way the state funds schools.

But Grantham was skeptical about asking voters to reset a statewide tax on personal property — an idea being explored by a bipartisan group of lawmakers.

“That’s going to be a lightning rod,” he said. “I don’t know if it will happen this year, or next year, or at all to be honest.”

How to fund the state’s public schools has been a long-running debate at the legislature and intensified after the Great Recession drove millions of dollars in cuts. A complex combination of constitutional amendments, such as Gallagher, and statutes largely has tied lawmakers’ hands in changing the system.

Changing the way the state funds its schools has been broached in the past, but changes have not materialized.

Speaker of the House Crisanta Duran, a Denver Democrat, said Wednesday her party is interested in exploring all options to increase school funding.

Both Duran and Hickenlooper have asked Republicans to rethink their position on changing how the state classifies state tax revenue from hospital visits. That, in turn, could allow the state to avoid constitutionally mandated taxpayer refunds, providing for more spending flexibility.

But like last year, Republicans are not interested.

“If they want to keep beating a dead horse, they’re welcome to,” Grantham said.

Grantham said he hopes next year’s budget can stave off increasing the state’s funding shortfall for schools. He praised his colleagues’ work in keeping cuts away from schools the last two years.  

“We’re looking at every single thing that is considered a core function of this government,” he said, adding that he believes lawmakers have lost sight of what taxpayers want. “I think the voters were clear with Amendment 23. But after 2009, our state priorities have gone down a different path.”

Amendment 23, passed in 2000, requires the state to fund its schools to keep up with population growth and inflation.

Hickenlooper in his speech also called on the state to find away to provide high speed broadband to all the state’s schools.

“Tonight, somewhere in one of these (rural) communities, a high school student will sit in a parked car outside her town library,” he said. “She’ll huddle over her laptop, face glowing from the screen as she tries to finish her paper, because it’s the only place she can get wifi. That isn’t right.”

The perennial debate

How the heck does Colorado fund its schools? (And six other money questions you might be embarrassed to ask.)

PHOTO: Nicholas Garcia
A high school student at Vista Peak Preparatory works on a computer during an engineering class.

Since public schools were founded, arguments have raged over how to pay for them.

In Colorado, it’s one of the perennial debates that gets the best of lawmakers, lobbyists, school leaders and advocates every year. Further frustrating things, lawmakers can only do so much because constitutional amendments lock in much of the state’s budget.

It’s no chump change: More than $6 billion in Colorado tax money goes toward schools.

As Colorado lawmakers get to work on crafting the state budget, here are some questions and answers about how the school funding system works in the Centennial state.

How the heck does Colorado fund its schools?

Colorado funds its schools from two major sources of revenue.

The first pool of revenue is called the “local share.” This money comes from local property taxes on homes and businesses. The second pool is the “state share.” This revenue comes from income and sales taxes.

PHOTO: Sarah Glen
Over time, the state has had to increase its contribution to the state’s schools.

Historically, schools received about an equal share of their funding from the local and state shares. However, for a variety of reasons, the state has had to dramatically increase its contribution to schools during the last two decades.

Many schools, especially those that serve large populations of at-risk students, also receive federal money.

What about marijuana taxes? Aren’t schools seeing a windfall from recreational sales?


The first $40 million of tax revenue collected from marijuana excise taxes — a wholesale tax — goes to a special fund to help school construction. That doesn’t go very far.

However, given a tightening state budget, Gov. John Hickenlooper has suggested increasing taxes on pot to help fund school operations. Lawmakers haven’t been keen on that idea.

Does every school district get the same amount from the state?

No. Lawmakers use a funding formula to determine how much money each school district gets. The formula, which was written in 1994, takes in a variety of factors including student enrollment, the district’s cost of living and how many at-risk students the district serves.

The large suburban district in Douglas County received $7,050 per student this year. Thirty-four percent came from local taxes, while the state picked up 66 percent of the cost.

The smaller Mapleton school district in Adams County, which serves a large Latino population, got $7,303 per student. But only 24 percent came from local property taxes, while the state kicked in 76 percent of the cost.

The tiny Aguilar school district in southeastern Colorado received $13,600 per student. The locals pitched in 25 percent and the state took care of the rest.

What determines the size of the local share?

School boards have no say in how much local property taxes contribute to their funding. That’s left to a complicated constellation of constitutional amendments and state law.

First there’s the Gallagher Amendment. Adopted in 1982, the amendment requires the state to maintain a 45 percent to 55 percent ratio ratio between the revenue collected from personal property and business property. When home values go up, the state is required to drop the percent on which property can be taxed. In 1980, the rate was 21 percent. In 2013, it was 7.98 percent. That means a smaller proportion of a home’s actual value can be taxed by school districts.

The second constitutional amendment in play is the Taxpayer’s Bill of Rights, or TABOR. Approved by voters in 1992, TABOR puts a cap on how much revenue the state and local governments can collect from taxpayers. It also requires governing bodies to seek permission from voters before increasing taxes.

While all but four school districts have received voter approval to keep excess tax revenue, lawmakers have put two key restrictions on school districts.

First, school district property taxes can only increase by inflation and enrollment growth. When that revenue exceeds the limit, school districts must reduce their tax rates. And because of TABOR, once the tax rate is lowered by statute, it can’t be raised without voter approval.

(If you want to sound super-smart at your next PTA or school board meeting, this is known as the “ratchet effect.”)

Lawmakers put an additional check on school districts in 2007 when they put a statewide cap on school districts’ tax rates.

What determines how much the state is supposed to kick in?

While there are two amendments that put restrictions on how the state can generate revenue to fund its schools, there is another Constitutional amendment that spells out how the state is supposed to spend that money.

Amendment 23, approved by voters in 2000, did a few things, but two points are still relevant today.

First, Amendment 23 requires the state to increase funding based on population growth and inflation. Second, it created the State Education Fund, an account lawmakers are relying on more heavily to pay for schools. It is financed by one-third of 1 percent of federal taxable income that is exempt from TABOR limits.

Wait, if lawmakers are required to increase funding each year, why does the state have an education funding shortfall?

During the Great Recession, when lawmakers were forced to slash hundreds of millions from the state budget, they argued that Amendment 23 only covers “base funding,” or the average every school district receives per pupil.

The amendment, they argued, doesn’t govern the additional money districts receive to compensate for size, at-risk students and other factors.

So in 2010, lawmakers created “the negative factor,” a new tool they could use to make across- the-board cuts to school funding after all other factors (size, at-risk students, cost-of-living) are taken into consideration.

As part of a compromise, lawmakers are required to report how much money they’re not giving to schools based on that legislative tool.

A lawsuit challenged the negative factor. But the state Supreme Court ruled in favor of lawmakers.

So while a large portion of funding must increase every year, lawmakers have places to cut education in a pinch. The current shortfall is at $828 million, down from a $1.01 billion in 2013.

Didn’t a bunch of school districts just pass tax increases?

Yes, and according to some, that’s making the situation worse.

As the state’s finances have squeezed, some school districts have turned to local voters to ask for more local revenue. These tax increases, known as mill levy overrides, exist outside of the state’s school funding system. The more voters approve doesn’t lessen the state’s burden.

There are some school districts like Boulder, Denver and Cherry Creek that have generated millions of local revenue but are still getting their equal share from the state. Meanwhile, districts like Greeley, Pueblo and Sheridan have never been able to convince their voters to approve a tax increase. That means they have to get by with whatever the state gives them.

Not ready for prime time

Lawmaker kills bill that would have allowed unlicensed teachers in rural Colorado classrooms

A bill that would have allowed understaffed rural Colorado school districts to hire unlicensed teachers was spiked by its sponsor after he was unable to find enough support.

“I’ve gotten a lot of flack over it, and it’s not ready for prime time,” said Rep. Jim Wilson, a Salida Republican. “If your troops are still arguing, I’m not dumb enough to lead the charge.”

Along with providing flexibility on hiring unlicensed teachers, House Bill 1178 would have created a process for rural schools to receive waivers from state law.

The State Board of Education, which is responsible for granting waivers, and the Colorado Education Association, the state’s largest teachers union, criticized the bill.

The union is a stalwart defender of the state’s licensure policies and objects to allowing unlicensed teachers in the classroom.

Wilson took a shot at the objections.

“My question is: Who is going to be concerned between unlicensed educators versus no educators?” he said. “There’s no easy simple solution to going out and finding (licensed teachers). They’re not there. I’ve never seen this kind of crisis — ever.”

State lawmakers are considering two other bills to address the shortage of teachers, which is concentrated in certain geographic areas and subjects.

On Monday, the House Education Committee on a party-line vote approved a bill that calls for the state’s education and higher education departments to create a strategic plan on the issue.

Lawmakers are also considering a bill that would grant rural school districts more flexibility in hiring retired teachers.