1. Colorado K-12 Funding Glenn Gustafson, Colorado Springs D-11
Deputy Superintendent/Chief Finance Officer
July 27, 2017

2. Role of the Board of Education
Financial Accountability (budget, audit, debt,
and elections)
Personnel Hiring
Salary Schedule/Compensation Systems
Establishes Graduation Requirements
Adoption of Curriculum

3. 178 School Districts 21 Medium Districts (5,000 to 25,000 pupils)
State of Colorado
178 School Districts
21 Medium Districts (5,000 to 25,000 pupils)

4. State of Colorado FY 17-18 Budget
See PDF Document of 2017 leg session

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

6. Per-Pupil Revenue (FY 17-18)
Basic School Finance
Per-Pupil Revenue (FY 17-18)
Base Funding $6,546.20
Cost of Living Factor
District Size Factor
Personnel Cost Factor %
Non-personnel Costs %
Subtotal $7,990.90
At Risk Factor
Negative Factor
PPR $7,581.85
Keep referring to spreadsheet in book.

7. English Language Proficiency Act (ELPA)
Basic School Finance
Categorical Funding
English Language Proficiency Act (ELPA)
Gifted & Talented
Small Attendance Centers
Special Education (ECEA)
Transportation
Vocational Education

8. Basic School Finance Mill Levy Overrides Maximum MLO – 25%
Charter School Allocations (Revised )
Allowable for Capital or Operating

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

10. TABOR/Gallagher Article X, Section 20 of the Colorado Constitution
FY92/93 Base Year
Limits Government Growth to Inflation Plus Growth
Spending and Revenue Limits
Reserving Technique – Ties to Audit
TABOR Emergency Reserve = three percent
Ratchet Down Effect!
Gallagher Amendment
- 55%/45% Ratio Assessed Property
- Doesn’t Affect Per-Pupil Revenue
- Limits Bond and Mill Levy Override Revenues

11. TABOR Who is NOT De-bruced? 4 School Districts State of Colorado!
Colorado Springs D-11
Harrison D-2
Cherry Creek
Steamboat Springs
State of Colorado!
State has $4M to $5M room under revenue cap

12. 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.

13. Residential Assessment Ratio
School Finance
Residential Assessment Ratio
Prior to 1983 – 30%
– 21%
1987 – 18%
1988 – 16%
– 15%
– 14.34% %
– 10.36% %
– 9.15%
– 7.96% %

14. Dramatic increases in health costs and in Medicare will squeeze K-12 and other programs9

15. What the General Fund Pays For FY 2016-17
State Share
What the General Fund Pays For FY
FY General Fund
Operating Budget
$9.6 billion

16. 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.

17. Medicaid Eligibility Growth10

18. Per-Pupil Spending Comparison10

19. Per-Pupil Spending Comparison10

20. State of Colorado

21. 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

22. What About Pot? Difference between Medical and Recreational
K-12 Funding set at $40M for Capital Const
Capital Constr through BEST grant
Best Grant Criteria includes local property wealth
D-11 unlikely to see ANY MJ funding

23. Local Tax Collections State Rank Tax Alaska 1 $206.46
Table 1
Combined State and Local Tax Collections Per $1,000 Income, FY
Source: U.S. Census Bureau.
State
Rank
Tax
Alaska 1
$206.46
U.S. Avg. (all states)
N/A
$102.10
Colorado 45
$86.82
South Dakota 50
$79.32

24. Tax Comparisons to Other States
Combined State and Local Taxes in Colo
and Neighboring States Per $1,000 Income, FY

25. Colorado Negative Factor History
: $830M
: $830M
– : $880M
– : $1.004B
– : $1.001B
– : $774M
– : $381M
What does this mean for school districts?
State leaders warn of increasing negative factor

26. Challenges
K-12 Initiatives (SB 163/191/212, Early Literacy, testing requirements & standards)
Competitiveness of Salary and Benefits
Declining Physical Plants and Grounds
Aging Vehicle Fleet
Technology Obsolescence
Increasing PERA Pension Requirement
Healthcare Costs and Affordable Healthcare Act
Declining Reserves and Matching Grant Obligations
Reporting Requirements and Automated Data
Exchange
Won’t solve this problem in one year
Mike to chime in on rural changes
Reporting Requirements:
Financial Reporting
State Reporting and ADE
Health Care Reporting

27. 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 through and annually by at least the rate of inflation for fiscal years thereafter;
Refer to Chart in the book.

28. Hitting the Base! Colorado K-12 Funding Year Inflation Assumption
Funding Above the Base
FY 16/17 to FY 24/25
Year
Inflation Assumption
K-12 Base Funding
Inflationary Increase
K-12 Negative Factor Cushion
State Increase in Negative Factor (non K-12)
Cumulative Increase in Negative Factor (non K-12)
Combined State Budget Cushion
# of Districts at the Base
FY 16-17
$6,367.90
N/A
$896,845,104 $0
FY 17-18
2.50%
$6,527.10
$159.20
$595,098,671
$165,000,000
$430,098,671
FY 18-19
$6,690.27
$163.18
$619,851,633
$454,851,633
FY 19-20
$6,857.53
$167.26
$311,418,269
$146,418,269 3
FY 20-21
$7,028.97
$171.44
$329,025,044
$164,025,044 1
FY 21-22
$7,204.69
$175.72
$128,935,362 45
FY 22-23
$7,384.81
$180.12
$87,631,745 54
FY 23-24
$7,569.43
$184.62
$62,142,494 72
FY 24-25
$7,758.67
$189.24
$55,903,117 82

29. Glenn Gustafson glenn.gustafson@d11.org 719-650-1960
Questions?
Glenn Gustafson