More than 50 Colorado school district leaders are urging House Speaker Julie McCluskie to plow forward with the state’s new school funding formula next year, despite a longtime funding miscalculation that threatens to upend the formula.
Superintendents, leaders of boards of cooperative educational services, or BOCES, and other district executives — representing a variety of large and small districts across the state — signed on to a letter sent to McCluskie, a Dillon Democrat, on Feb. 20. The district leaders wrote that adopting a new school funding formula “marked a significant step forward” in providing “sustainable, equitable funding” for Colorado students.
“We must not allow technical misunderstandings or political maneuvering to hinder its implementation,” the letter stated.
Setting the new funding formula in motion starting in the 2025-26 school year has become a bigger question throughout the legislative session, both as lawmakers figure out how to address the technical error and as they wrestle with an estimated $1.2 billion budget deficit.
Superintendents are calling on the legislature to protect education funding at all costs.
“There’s never a wrong time to do the right thing, so look to other areas of the (state) budget to preserve this needed plan, intentional change,” said Brett Ridgeway, chief business officer for Lewis-Palmer School District 38 and one of the leaders who signed the letter.
Districts’ concerns outlined in the letter stem from funding errors going back nearly 20 years. Colorado’s new funding formula, designed to funnel an additional $500 million into schools over six years, includes three so-called triggers that automatically stop the implementation of the new formula should the economy suffer a downturn.
Lawmakers intend to use the state education fund to cover much of the additional funding required by the new formula. Under Amendment 23, which voters passed in 2000, the state must transfer a specific amount of money from its general fund to the state education fund every year: one-third of 1% of taxable income.
One of the formula’s triggers turns on if the sum the state transfers into the state education fund falls by 5% from one year to the next.
Nothing is firm until mid-March, when the Joint Budget Committee selects the revenue forecast it will use to inform the state budget. But current projections from Colorado Legislative Council staff suggest that the amount transferred to the state education fund during this current fiscal year will be at least 5% less than the amount shifted during the last fiscal year.
The result: Colorado will hit one of the formula’s triggers — but not because of economic troubles. A one-time boost in revenue due to consistent funding calculation errors sparked the trigger. The legislature’s chief economist Greg Sobetski, who identified the errors and helped to correct them, previously told The Colorado Sun he discovered mistakes in the amount of money deposited into the state education fund over 19 years.
Sobetski discovered the errors while investigating whether the amount of money transferred to the state education fund accurately represented Colorado taxable income in the 25 years since Amendment 23 was created.
The funding miscalculations indicated that the state transferred $135 million less to the state education fund than what was owed. That equals 1.3% of the $10.5 billion the state has transferred from the general fund to the state education fund over the past 19 years.
That extra $135 million has since been added to the fund. Now lawmakers must figure out how to disarm the trigger that would stop the rollout of the new formula, but they disagree over how to respond to the trigger.
In their letter to McCluskie, district leaders asked for “the immediate and full implementation” of the new school funding formula and to avoid “unnecessary political delays regarding the technical adjustment” to the state education fund.
Delaying the new formula based on the technical error “would set a dangerous precedent, allowing routine budget adjustments to derail critical policy progress,” their letter states.
The district leaders also asked McCluskie to develop “a statutory clarification,” if needed, to make clear that a technical fix is different from an economic downturn when looking at triggers and does not warrant a halt of the new formula.
McCluskie wrote in a text message to The Sun that she is determined to debut the new school funding formula for the 2025-26 school year as lawmakers intended when they established the new formula.
“We will turn on this new formula that the legislature overwhelmingly supported and that increases funding for every district because it’s clearly what is best for our students,” McCluskie said in the text. “I fully agree with the superintendents that the new formula is a significant step forward and that this technical issue that can be easily fixed should not stand in the way of what we promised our students.”
District leaders say they worry about the possibility of some lawmakers seizing on the technical error and making a political play to stop the formula from launching next year.
State Sen. Barbara Kirkmeyer, a Brighton Republican and member of the JBC, has repeatedly questioned whether the state has adequate funding to pull off the new funding formula.
“Last year, the governor and speaker of the house, who supported this new school finance act, said they were convinced that the state had the revenue and the ability to sustain the new formula long term,” Kirkmeyer wrote in a text to The Sun. “Less than a year later they have been proven wrong. Colorado faces a budget shortfall exceeding $1 billion. It is irresponsible to continue promising funding to school districts that the state simply does not have.”
“It’s sustaining the problem indefinitely”
Ridgeway, from Lewis-Palmer School District 38 in Monument, added his signature to the letter, eager for increased funding for students whose learning needs are influenced by disabilities, living in poverty and learning English.
He believes his district would be largely unaffected by a delay in the rollout, noting other districts that educate more students with significant learning needs would draw more of the additional dollars from the new school funding formula. Ridgeway worries about those struggling students across the state who could benefit from the extra spending.
Districts will be “less able to improve their student outcomes if we slow it,” Ridgeway told The Sun.
He also rejects the idea that a technical error should set off a trigger that pauses the formula.
“My impression would be that we had these trigger clauses that we put into the school finance act to provide real boundaries if the economic environment or the state budget environment changed in certain ways,” Ridgeway said. “Trying to grasp onto this technical correction and say that it applies to the boundaries that were established is not a good faith interpretation of that.”
Cañon City Schools Superintendent Adam Hartman agrees, adamant that the trigger was not activated for the reason in which lawmakers created it in the first place — a backstop against an economic downturn.
“The last thing I want to see is them not get started on implementing what we’ve worked so hard for and what our kids deserve,” Hartman, who also signed the letter, told The Sun.
Hartman said kicking off the new formula next year as intended is critical as education costs continue to jump and as a sense of uncertainty swirls around the future of federal dollars under the Trump administration.
His district, southwest of Colorado Springs, is looking at a possible $81,000 year-over-year rate hike for electricity and is also trying to figure out how to take on significant increases in health benefits packages for staff. Revenue, Hartman said, is not keeping pace with rising expenses and delaying the new school funding formula will only exacerbate that challenge.
Hartman said he especially worries about how a lag in the new school funding formula could impact students, noting that less funding leads to the district cutting back on staff, which directly affects the programs and opportunities available to kids.
“It’s sustaining the problem indefinitely,” he said, “and it needs to get started.”