School Funding 101 Foundation for Advocacy 2017 Action Summit April 21, 2017 All items in this presentation in grey font are meant to be replaced with your own school district information. La Veta School District is used throughout this presentation as an example. Update this slide with: Fill in your school district name

Critical First Question: Do I Need to be an Expert? No. (And, by the way, you are.) You need to care. You need to convey your values. You need to feel comfortable. Everything I talk about today comes down to this: Great schools are the foundation of thriving communities. Prepared, confident, well-round students are the foundation to a strong democracy and economy. Colorado isn’t investing enough – and someone else isn’t going to fix that. All of us have to.

The basics. Funded primarily by state and local revenues (only a limited federal role). Local Sources: $2.3 billion Property Taxes $2.1 billion (93%) Spec. ownership taxes $159 million (7%) State Sources: $4.4 billion General Fund $3.8 billion (85%) SEF $589 million (13%) State Public School Fund $72 million (2%)

How much does each district get? That’s “Total Program” Colorado school funding starts with a “base” amount, which must increase by inflation each year. 2016 = $6368 This base is run through the formula that takes into account “fairness factors”: District characteristics (e.g., district size, cost-of- living, personnel costs) Student characteristics (e.g., at-risk) Negative Factor is applied. That’s “Total Program”

Who pays for it? Once the formula sets a district’s total program: It determines how much local property tax will be collected under the district’s mill rate. Then the state “backfills” the difference between the state-calculated per pupil and local contribution. Total Program State Local

It’s different for every district. District B Why? Total Program: District Size Cost of Living At-Risk kids Local v. State Share: Local assessed value Increases in assessed value 1994-2007 Huge inequities exist District A State State Local Local

Local and state share varies across school districts depending on property wealth

A look at one school district: La Veta School District Student Count: 208.7 Student Poverty (At-risk): 105 Total Program Funding per Student: $12,796 After Negative Factor: $11,322 ($1,473 loss) 43 57 Update this slide with: Your school district name Student Count: (found in the School Finance spreadsheet) Student Poverty (at-risk): (found in the School Finance spreadsheet) Total Program Funding per Student: (found in the School Finance spreadsheet) After Negative Factor: (found in the School Finance spreadsheet) Pie chart needs updated with state/local share information: (found in the School Finance spreadsheet. State share is calculated by dividing Adjusted Total Program Funding by Total State Share)

A look at one school district: Jeffco School District Student Count: 81,405 Student Poverty (At-risk): 21,027 Total Program Funding per Student: $8,178 After Negative Factor: $7,237 ($942 loss) 39 61 Update this slide with: Your school district name Student Count: (found in the School Finance spreadsheet) Student Poverty (at-risk): (found in the School Finance spreadsheet) Total Program Funding per Student: (found in the School Finance spreadsheet) After Negative Factor: (found in the School Finance spreadsheet) Pie chart needs updated with state/local share information: (found in the School Finance spreadsheet. State share is calculated by dividing Adjusted Total Program Funding by Total State Share)

What was that “Negative Factor” thing? Hang on. What was that “Negative Factor” thing?

Amendment 23 Passed in 2000 to reverse cuts to schools in the 1990s. Requires base per pupil funding to increase by inflation + 1% for the first 10 years and by inflation after that. If honored, per pupil funding adjusted for inflation would finally have reached 1989 levels. Until 2010, “total program” was calculated as described above . . .

Then came the Great Recession Amendment 23 required increases in the base, so in order to cut school funding the legislature added another so-called “factor” to the “fairness” factor: Each district’s Total Program is now reduced by the “negative factor” – now 12%.

Statewide Impact of the Negative Factor

The annual Negative Factor reductions: Statewide La Veta School District 2010: $130 million 2011: $381 million 2012: $774 million 2013: $1.01 billion 2014: $1 billion 2015: $894 million 2016: $831 million 2010: $ 57,368 2011: $163,237 2012: $318,972 2013: $402,371 2014: $384,999 2015: $325,717 2016: $315,738 Update this slide with: Negative Factor annual amounts and total: (found in the Negative Factor History chart) Totals over $5 billion Totals $1,968,402

The annual Negative Factor reductions: Statewide Jeffco 2010: $130 million 2011: $381 million 2012: $774 million 2013: $1.01 billion 2014: $1 billion 2015: $894 million 2016: $831 million 2010: $13,107,910 2011: $38,058,436 2012: $75,946,924 2013: $97,914,531 2014: $95,610,711 2015: $82,799,999 2016: $77,845,992 Update this slide with: Negative Factor annual amounts and total: (found in the Negative Factor History chart) Totals over $5 billion Totals $481,284,503

A few more components: Outside “Total Program” “Categoricals” – special education, gifted, ELL, transportation. Total increased by inflation Woefully underfunded Mill Levy Overrides Districts can also pass mill levy overrides of up to 25% to increase local funding (30% for rurals). Additional overrides for kindergarten, transportation and tech are also possible. Federal funding.

Snapshot of our Current System Taxpayer effort is unequal among districts. State share of funding is growing, but total program keeps falling behind inflation. Our economy is strong, but our schools can’t recover from the recession. Colorado is $2,500 behind the national average and $1,050 behind inflation.

Well, how did we get here?

Well, how did we get here?

The local share in Total Program Funding is mostly raised through local property taxes. Gallagher messed with the assessment rate, and TABOR (as applied through the SFA) messed with the local mill levy

TABOR + Gallagher impact on the adequacy and the budget Study: If we paid the same percent of total residential property value in 2009 as in 1994, K-12 would have $3 billion more in local support. Result is the worst of all worlds: State is backfilling property tax relief, and putting greater pressure on the general fund, without providing new resources for K-12.

The Gallagher Amendment locks in a ratio between residential and nonresidential.

When the residential market value grows faster than the nonresidential, a decrease in the assessment rate is triggered.

and School Finance Mill Levy State Constitution constrains property tax gains. Residential Assessment Rate and School Finance Mill Levy Source: CO Dept of Local Affairs, Division of Property Taxation

Tax effort and fiscal capacity across CO Update this slide with: Your school district name Total Mills: (found in Tax Effort and Fiscal Capacity of school districts report) Amount Raised by 1 Mill: (found in Tax Effort and Fiscal Capacity of school districts report) Amount Raised per Student per 1 Mill: (found in Tax Effort and Fiscal Capacity of school districts report)

Tax effort and fiscal capacity across CO Update this slide with: Your school district name Total Mills: (found in Tax Effort and Fiscal Capacity of school districts report) Amount Raised by 1 Mill: (found in Tax Effort and Fiscal Capacity of school districts report) Amount Raised per Student per 1 Mill: (found in Tax Effort and Fiscal Capacity of school districts report)

State Constitution applies pressure on the state budget — Relative State and Local Shares of School Finance have flipped.

Gloomy prospects for education funding. So what happens now (until we fix this)? Sunny economic prospects for the state . . . Gloomy prospects for education funding.

Wait. What?

Our Constitutional Tax Code Prevents Us from Benefitting from a Thriving Economy.

What did you do with YOUR Rebate last year?

Text “CEN” to 94502 or visit www.ColoradoEducationNetwork.org Sign up to be part of the Colorado Education Network Text “CEN” to 94502 or visit www.ColoradoEducationNetwork.org There are so many ways you can help. Probably the easiest thing to do right now is to sign up for our newsletters. I’m passing around a sign up sheet. This will enable us to keep in touch with you and let you know how you can advocate for Colorado’s kids in the future. You can invite us to speak at your school or community group so we can spread the word. Be sure to follow us on Facebook (and Twitter @greated, if you tweet -). If you like our posts, please like & share them. This will enable us to reach a broader audience and build a stronger community of public education supporters. The bigger we are, the more influence we can have with both voters and legislators.

Bonus slide: Mythbuster

Myth: The Marijuana Tax Took Care of School Funding When Colorado legalized recreational marijuana, there was a lot of talk of that money helping schools. So what happened? $40 MILLION SCHOOL CONSTRUCTION AND THEY NEED IT!