Colorado school finance bill would spare districts from impact of enrollment declines

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Colorado school districts would avoid the worst budget hits from losing 30,000 students this school year under a bill that received initial support from the Joint Budget Committee Thursday.

The bill sends an extra $60 million to school districts — $41 million to make up for lost local tax revenue and another $19 million to districts that saw particularly large enrollment declines or that experienced a notable decrease in the number of students living in poverty.

Rural districts will share another $25 million from a new nicotine tax approved by voters in November.

Colorado funds districts based on how many students they have, as well as other factors like district size and student poverty, with the state and school districts sharing the costs. With the state budget set in the spring, lawmakers always adjust school funding midway through the year to account for changes in enrollment and local tax collections from the previous year’s estimates.

Many school districts were bracing for significant cuts this year — on top of cuts the legislature already made last year in response to a pandemic-related economic slump — because 3% fewer students have showed up to school.

According to the school finance formula, the full hit to school districts should have been almost $121 million. But Colorado lawmakers already hold back hundreds of millions every year that the state constitution says should go to K-12 schools to pay for other priorities. The withholding reached $1.2 billion this school year, as lawmakers struggled to balance the budget during the height of business restrictions and job losses. Colorado’s K-12 budget is about $7.2 billion.

Rather than claw back $121 million for the state, the school funding adjustment bill essentially treats it as part of the amount that was already withheld.

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