Hitting the Base Glenn McClain, Platte Valley SD Superintendent & Glenn Gustafson, Colorado Springs D-11 Deputy Superintendent/Chief Finance Officer

Amendment 23 Language Shall there be an amendment to the Colorado Constitution concerning increased funding for preschool through twelfth-grade public education, and, in connection therewith, requiring the statewide base per pupil funding for public education and funding for specifically defined categorical programs to grow annually by at least the rate of inflation plus one percentage point for fiscal years 2001-02 through 2010-11 and annually by at least the rate of inflation for fiscal years thereafter; Refer to Chart in the book.

Amendment 23 Language What does Amendment 23 do? Amendment 23 changes the way in which the state funds K-12 public schools by requiring the General Assembly to provide specific increases each year. The amendment makes four major changes: • it requires that the statewide "base" in the school finance act be increased by at least inflation plus one percent for ten years - through FY 2010-11 - and at the rate of inflation thereafter; • it requires that total funding for all categorical programs be increased by at least inflation plus one percent for ten years and at the rate of inflation thereafter; • it creates the State Education Fund and transfers to the Fund an amount equivalent to a tax of one-third of one percent of federal taxable income. These revenues are exempt from TABOR limitations, and spending of such revenues is not subject to the six percent statutory limitation on General Fund appropriations; • for the next ten years, it requires the state's General Fund contribution to the school finance act to increase by a minimum of five percent annually if personal income grows by at least 4.5 percent. This is known as the maintenance of effort provision. Refer to Chart in the book.

Basic School Finance Total Program Funding Total Program Calculation Per-Pupil Revenue x Pupil Count Total Program Components Property Taxes Specific Ownership Taxes (Yeah Hail!) State Equalization Refer to Chart in the book.

Per-Pupil Revenue (FY 16-17) Basic School Finance Per-Pupil Revenue (FY 16-17) Base Funding $6,367.90 Cost of Living Factor 1.205 District Size Factor 1.0297 Personnel Cost Factor 90.50% Non-personnel Costs 9.50% Subtotal $7,772.73 At Risk Factor 512.32 Negative Factor -953.96 PPR $7,331.12 Keep referring to spreadsheet in book.

What the General Fund Pays For FY 2015-16 State Share What the General Fund Pays For FY 2015-16 FY 2015-16 General Fund Operating Budget $9.6 billion

Relative State and Local Shares of School Finance, 1983 to FY 2015-16 Note: Prior to 1993, K-12 funding was done on a calendar year basis.

Dramatic increases in health costs and in Medicare will squeeze K-12 and other programs 9

Colorado State Budget Caseload Growth & the General Fund Budget Sources: Colorado Department of Education, U.S. Census Bureau, & Bureau of Labor Statistics, and JBC Staff.

Colorado Negative Factor History -- 2016-17: $830M -- 2015-16: $830M – 2014-15: $880M – 2013-14: $1.004B – 2012-13: $1.001B – 2011-12: $774M – 2010-11: $381M What does this mean for school districts? State leaders warn of increasing negative factor

School Finance Scenarios Going Forward State Share School Finance Scenarios Going Forward Local Share Total Program Funding Projections LCS December 2015 Revenue Forecast JBC Staff Recommendation $40.8M one-time increase in negative factor Eliminate negative factor Current law: constant $830.7M negative factor Statewide Base Per Pupil Funding Current funding level