Even as Colorado lawmakers button up a school funding plan for next year in the last days of the legislative session, they’re taking preemptive steps to protect the state’s education budget from future cuts.
Legislators late Friday added an amendment to the state’s school finance act, House Bill 1320, that is designed to set the state up to follow through on funding Colorado schools to the degree laid out in the state’s new school funding formula.
Lawmakers plan to set aside about $230 million for schools for the 2026-27 school year in a pot of money called the Kids Matter Fund that will sit inside the State Education Fund, a sort of bank account holding reserves that contribute dollars to the school funding formula and also support a variety of other education programs. The money would come from existing state tax revenue and would be fueled by taking 0.00065% of income tax revenue each year to put directly into the school funding formula.
Since state tax revenue typically grows year after year, the amount of annual dollars for the fund would likely increase from the projected $230 million in its first year. That’s money that would be diverted from other state programs and services.
The adjustment to the bill aims to put school funding on a steadier path in future years following months of lawmakers tinkering with their approach to education spending. A $1.2 billion budget deficit this year prompted the legislature to scale back on promises they made last year when they adopted a new school finance formula set to begin for the 2025-26 school year.
Lawmakers want to start planning now to guard against similar funding cuts in the future.
“This is an amendment that the Senate gets to say, we are putting down a marker that we will never ever return to the day of balancing the budget on the backs of students,” state Sen. Barbara Kirkmeyer, a Brighton Republican and member of the Joint Budget Committee, told colleagues on the Senate floor Friday night. “This is a guarantee the budget stabilization factor does not come back. With this amendment we are setting our priority in the budget, not just this year but every year, that we will put kids and their education first.”
The Great Recession-era accounting tool allowed legislators to give schools less money than the amount required by the constitution.
“We had $10 billion in cumulative costs to education because of the (budget stabilization) factor because we balanced the budget first and said, ‘even though it’s a constitutional amendment, we’re going to just write an IOU to our schools,’” State Sen. Chris Kolker, a Centennial Democrat and chair of the Senate Education Committee, said Thursday during a Senate committee meeting. “This is our chance to start making that up.”
The amendment stems from a bipartisan proposal offered up by Kirkmeyer and Kolker, a former high school teacher, who originally pitched the idea of routing about $250 million to the Kids Matter Fund. They revised the amendment in collaboration with bill sponsors state Sen. Jeff Bridges, a Greenwood Village Democrat and vice chair of the Senate Appropriations Committee, and Senate Minority Leader Paul Lundeen, a Monument Republican and member of the Senate Education Committee.
Bridges is chair of the Joint Budget Committee.
Kirkmeyer told The Colorado Sun that she and Kolker initially planned to use Kids Matter Fund dollars to also benefit higher education. Lawmakers decided to exclude higher education from the account, however, allowing them to pull back the dollars that would flow into it.
Dialing back the amount that will go into the fund represents “the right middle ground for the budget” — one that can mitigate concerns about needing to cut other state programs and agencies next year to fund education, House Speaker Julie McCluskie, a Dillon Democrat, told The Sun.
“We were able to find a way to do an appropriate amount of money into the State (Education) Fund, which is what is so critically important here to protect it for public education,” McCluskie said Saturday. “It’s the right amount of money. It won’t put significant pressure on the budget next year. That was certainly part of my caution.”
State Sen. Judy Amabile, a Boulder Democrat and chair of the Senate Appropriations Committee, said she shares worries about spending money on K-12 to the detriment of other critical programs like Medicaid. Amabile voted against the amendment during Thursday’s Senate committee meeting, acknowledging education as a key priority but concerned about other state priorities.
“I have a person in my family who depends for his very life on Medicaid and it isn’t just him,” Amabile, also member of the JBC, said during Thursday’s meeting. “We have a million people in Colorado who depend for their very lives on Medicaid, and so we are playing a zero-sum game. We have to balance our budget every year and I don’t want to preclude us making sure that people in our state have access to health care, especially people who are poor and people who are disabled as my son is. I want us to strike a balance, but this feels like an out-of-balance attempt to undo the good work that’s been done to come up with what is the right amount.”
“We’re going to have much harder conversations next year”
With similar concerns about preserving enough money for other critical programs, Bridges told The Sun that lawmakers were careful in deciding how much money to direct to the Kids Matter Fund.
“We all fully 100% believe in funding public K-12 education,” he said Sunday. “The danger here is that we don’t have the funds to provide medical care, to provide the outside supports like social services, that we don’t have the behavioral health care supports that some of these kids need. If we put too much money into this fund, we are harming kids in a different way, and so we just need to be really thoughtful about how we approach this.”
Bridges has repeatedly pointed to Colorado’s struggles to equitably and adequately fund its schools. This amendment inches Colorado forward in giving schools more of the money they need, he said.
“The new formula addresses the equity problem,” Bridges said during Friday night’s debate of the bill on the Senate floor. “The adequacy one we still need to work on. This bill moves us in that direction. Most importantly for me, this amendment right here almost virtually guarantees that we will implement the new formula, that we will have the funds to implement the new formula.”
Kevin Vick, president of the Colorado Education Association, the state’s largest teachers union, said he’s grateful that the amendment “strives to put education funding and kids’ futures at the front of the line.”
“I think in general we have been saying for years that the state needs to take a hard look at how it’s funding itself and funding our quality of life in general,” Vick said. “This current situation is really of our own making because of TABOR (the Taxpayer’s Bill of Rights), and so it is time to really start looking at what kind of quality of life do we want as a state and how do we fund that?”
With more budget pressures on the horizon, the amendment will insulate schools in a time of “continuing uncertainty and funding challenges for the immediate future,” said Melissa Gibson, deputy executive director of the Colorado Association of School Executives.
“Anything like this that can help protect against deep cuts for K-12 is very much appreciated and we know it’s hard to come by in this funding environment,” Gibson said.
While the Kids Matter Fund would pad the state’s budget for schools, others say the proposal does not go far enough in improving school funding since it would not create a new revenue stream for K-12 funding.
“I think it’s trying to make a statement around priorities, but it doesn’t solve the revenue problem for K-12 by any means,” said Tracie Rainey, executive director of the nonprofit Colorado School Finance Project. “You’re just adding really a fairly small amount when you’re talking about needing $3.5 billion (to adequately fund education). This is just more of a political statement than it is generating revenue, and you’re taking it away from other state government programs at a time when you’re making cuts. If you were talking about it being new revenue coming from a new source and it was actually meaningful, then that would be a very different conversation. This is just diverting existing dollars into a new pot of money to be used for education.”
Rainey added that because the amendment would be statutory, it would not be “a permanent obligation” for the state, meaning next year lawmakers could pass a bill directing money in the Kids Matter Fund to another part of the state budget.
She worries about the sustainability of the new school funding formula in the absence of structural changes to the way the state funds its schools and at a time the federal government is sowing economic uncertainty in Colorado.
“I think that we’re going to have much harder conversations next year,” Rainey said, “and I’m not really sure that anything that they did this year really gets to the root of the problem unless they’re willing to talk about new revenue coming into the state.”
McCluskie noted that some of the uncertainty in the budget picture could turn into an upswing for schools long term.
“Whether this (amendment) had happened or not, I believe that Republicans and Democrats here are very committed to protecting the investments we made last year, whether we look at paying off the (budget stabilization) factor or implementing the new formula,” she told The Sun. “I believe this is a way to state that commitment and hopefully our budget picture improves. Who knows? Maybe we’ll be able to implement (the new formula) even faster in the years ahead.”
Staff writer Jesse Paul contributed to this report.