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How Colorado counts kids eligible for subsidized lunch is a recipe for school budget disaster

As lawmakers sit down to reform the state’s school finance formula, they’re worried using help with meals as an indicator of poverty will cause districts to lose money dedicated for “at-risk” students.

A Centennial Elementary School fifth grader drinks water from a carton during lunch in the school cafeteria on Wednesday, Feb. 10, 2021, in Colorado Springs. (Mark Reis, Special to The Colorado Sun)
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As the pandemic closed schools and businesses and put livelihoods on the line last year, Colorado state lawmakers predicted many more students would fall into poverty — about 51,000 more. But the state counted about 3,000 fewer students living in poverty — also known as at-risk students — than the number tallied during the 2019-20 school year.

The wide gap raised all kinds of questions for lawmakers and legislative budget analysts, who wondered how the state could record dramatically fewer at-risk kids when a COVID-19-fueled recession was making it so much harder for many families to cover their basic needs.

One problem: paperwork. 

Remote learning challenged many families in being able to submit applications for free and reduced price lunch, applications the state relies on to determine students who are at risk, said Leslie Colwell, vice president of K-12 Education Initiatives at the Colorado Children’s Campaign. Additionally, the federal government enabled districts to serve universal free meals to all students, regardless of their family’s income. That meant that families didn’t have as pressing of a need to turn in an application for free and reduced price lunch to their districts because their kids were already able to access free school meals.

Counting the number of at-risk kids properly is a critical part of a district’s bottom line. Districts receive at least 11.5% or 12% additional funding per at-risk student and up to 26% more funding per at-risk student if they have a particularly high population of students from low-income homes. Without an accurate count of at-risk students, districts lose out on state funding and can find themselves trying to support more vulnerable students with fewer dollars.

Free and reduced price lunch forms factor into a much bigger problem — a systemwide problem. Even before the pandemic, the state’s approach to counting students living in poverty likely excluded many kids whose families struggle to make ends meet. 

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By using free and reduced price lunch applications as the sole tool for determining student poverty in the state, “we know we’re not accurately capturing how many of our kids are really coming from need,” said Rep. Julie McCluskie, a Dillon Democrat who serves as vice chair of the Joint Budget Committee.

Lawmakers are setting out to make major changes, overhauling how the state defines and counts at-risk students in hopes of devising an approach that will truly capture all Colorado kids who come from poverty. They’ve already taken steps to that end, shifting from including only students who qualify for free lunch to also include students who are eligible for reduced price lunch — an expansion that will cost the state an extra $77 million. The change was outlined in Colorado’s School Finance Act, Senate Bill 268, during the most recent legislative session.

A Centennial Elementary School staff member wheels lunches through the cafeteria on Wednesday, Feb. 10, 2021, at the Harrison School District 2 school in Colorado Springs. (Mark Reis, Special to The Colorado Sun)

McCluskie believes lawmakers are moving in the right direction, but she also wants the state to explore other approaches to defining what it means to live in poverty and how students from low-income households are counted.

She anticipates that given the large increase in unemployment during the pandemic, there were more students living in poverty.

“But we had no way of measuring that,” McCluskie said.

A legislative interim committee on school finance could help. The committee, created by legislation passed during the 2021 legislative session, will bring together four senators and four representatives from both parties who will work with a third-party vendor to anayze approaches that might better reflect student poverty.

“I’m very hopeful that this study will help us better understand how we can do this right in Colorado for our kids,” McCluskie said.

“A one-dimensional approach”

Colorado takes stock of its at-risk student population during the annual October count, when all 178 school districts must calculate how many students they’re educating, said Jennifer Okes, chief operating officer for the Colorado Department of Education.

Data points included in the count focus on students who qualify for free or reduced price lunch.

Students can qualify for free lunch in a few different ways, Okes said, including through a method called direct certification. Students who are directly certified include those who are eligible for the Supplemental Nutrition Assistance Program, which gives benefits to families in need to ensure they can buy nutritious food, and Temporary Assistance for Needy Families, a federal grant program that helps states support families through financial assistance and other resources. Other students can be directly certified if they are in Head Start, are homeless, in foster care or a migrant.

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Outside of direct certification, families can apply for free and reduced price lunch with a form that asks them about their household income and the number of people who are part of their household. Okes noted that for the next school year, a household of four can earn no more than $34,060 to qualify for free lunch and no more than $48,470 to qualify for reduced price lunch, as set by federal guidelines.

Districts file information about their students who can eat meals for free or at a reduced price as part of the October count, Okes said. The state enters enrollment counts into the school finance formula, calculating the dollar amount each district should receive and then sending funds to districts monthly. Districts have received more state funds for kids who qualify for free lunch and now will also get more money for kids eligible for reduced price lunch.

She added that using free and reduced price lunch forms to indicate student poverty in Colorado has been highly debated. However, in past years, that method has been in line with how other states look at their own populations of students living in poverty, Okes said.

Colwell, of the Colorado Children’s Campaign, raises a lot of concerns with relying on free and reduced price lunch forms as the primary metric to inform student poverty. In December, she helped craft a memo detailing the shortcomings of leaning so heavily on those applications.

Gov. Jared Polis, alongside Rep. Julie McCluskie and Sen. Rachel Zenzinger, signs Senate Bill 268 into law on June 11, 2021, at the Boettcher Mansion in Denver. (Olivia Sun, The Colorado Sun)

Among them, she said, free and reduced price lunch forms. Which consider only family income, are “a one-dimensional approach,” that lacks perspective on a family’s overall well-being. Other elements like wealth, parents’ educational attainment and community resources can impact a student and the direction their education takes, but none of those are reflected in free and reduced price lunch, the memo states.

Another problem: Colorado defines poverty among students with “a binary lens,” in which kids are characterized as at-risk if they qualify for free and reduced price lunch and are not categorized as at-risk if their family’s income is even one dollar above the threshold. That means that families in a district who are experiencing varying levels of poverty are lumped together and receive the same degree of support and resources through funding for at-risk pupils.

Colwell said she encouraged that the state is recognizing that defining poverty in terms of only students who qualify for free lunch is “woefully inadequate.” But she also is pushing Colorado to move away from using free and reduced price lunch eligibility as a measure of student poverty.

“It’s increasingly becoming an inaccurate measure of students who are experiencing economic disadvantage,” Colwell said.

Centennial Elementary School cafeteria staff members prepare lunches for students at the school on Wednesday, Feb. 10, 2021, in the kitchen at the Harrison School District 2 school in Colorado Springs. (Mark Reis, Special to The Colorado Sun)

Danielle Bock, director of nutrition services in Greeley’s Weld County School District 6, said at-risk populations of students likely are broader than those who qualify for free and reduced price lunch. In September, the district had more than $147,000 in student meal debt, accrued by kids whose families have not completed applications for free and reduced school lunch.

No child is turned away from school meals. Bock does contact families to alert them that their child is racking up debt and will inform them that they need to fill out a form for free and reduced price lunch, something they’re often not aware they need to handle.

There are language barriers to filling out the paperwork. Bock said families in District 6, the 13th largest in the state with close to 22,000 students, speak about 80 different languages. It’s hard to find language translation services for families so that they can submit applications.

Colwell worries that Colorado could see another undercount of its at-risk student population during the next school year, in part because of the U.S. Department of Agriculture’s decision to extend universal free meals for all students through the 2021-22 school year.

The extension means families won’t have to submit a free and reduced price lunch application to their districts to gain access to subsidized school meals, and so the count of kids from struggling families could be low. Colorado’s most at-risk kids will then receive less money than they deserve, Colwell said.

Expanding the definition of at-risk is one thing. Expanding funding is another.

Tracie Rainey, executive director of the Colorado School Finance Project, said that if the state wants to have a real grasp on how many kids are facing economic hardship, it needs to look beyond just those who qualify for free and reduced price lunch.

“Does it truly capture poverty?” she asked. “Probably not.”

As Colorado incorporates students who qualify for reduced price lunch into its at-risk population, that population will grow by about 10% to represent about 43% of all public school students in the state, Rainey said.

But simply adding more students into the at-risk mix won’t solve any problems. It’s also critical to increase the weight of funding that those students receive if state leaders want to ensure districts have enough revenue to serve at-risk students with adequate resources, Rainey said.

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Currently, most districts receive 11.5% or 12% more funding per at-risk student. Districts that have more at-risk students than the statewide average can receive more — up to about 26% more funding per at-risk student, Rainey said.

But research into the cost of educating at-risk students shows that Colorado should be providing districts 33% to 35% more funding per at-risk student, she said. 

McCluskie said she hoped more money would be carved from the state budget to better support low-income kids, by even a percentage point or two. But the state did not make even a modest increase, and so it will continue to give the majority of districts 12% more funding per at-risk student. 

As the state’s economy gets back on track, McCluskie said, she’s eager to revise the formula so that districts have more funds for each at-risk student they’re supporting.

State Rep. Julie McCluskie, D-Dillon, speaks on June 11, 2021 , before Gov. Jared Polis signs Senate Bill 268, which is aimed at increasing statewide funds per student at the Boettcher Mansion in Denver. (Olivia Sun, The Colorado Sun)

Rainey said lawmakers need to have a bigger conversation about what they’re trying to accomplish by revising the way education is finded in Colorado, and they must better understand the cost of the state’s current education system. 

Otherwise, she fears they will simply rearrange priorities and make changes without knowing if they’ve actually addressed the problem.

Redefining at-risk students to include more kids without elevating funding for those students creates something of a “false assumption that you’re actually making an improvement.”

“You might be identifying more, but you aren’t giving districts more revenue to actually meet the needs of those students,” she said.

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