Colorado

Colorado's 2019 legislative session began on the heels of an election that highlighted voters' support for public education—but also their reluctance to pay more taxes. At the polls in 2018, voters simultaneously elected Governor Polis (D), who had vowed to fight for adequate and equitable funding of public schools, and rejected Amendment 73, a measure that would have raised taxes on high earners and corporations in order to inject an additional $1.6 billion annually into public school funding. Thus, Colorado's fiscal challenges persisted in 2019, even as the newly-elected Democratic majorities in both houses of the legislature signaled willingness to support the Governor's goal to increase public school funding.

Funding priorities

P-12

Providing full-day kindergarten throughout the state was among the highest priorities in the budget for Fiscal Year (FY) 2019-2020. A bill appropriating $175 million annually to fund full-day kindergarten passed both houses with bi-partisan support before Governor Polis signed it into law.¹ Critics have noted, however, that the required funding depends on a steadily increasing property tax base even as economists predict slower growth in 2019.²

Higher Education

Funding priorities for higher education included two efforts to promote Colorado's chances of reaching its Master Plan goal of a 66% postsecondary attainment rate by 2025. The Higher Education Supplemental Instruction Act (2019) is intended to promote undergraduate success through appropriating financial resources toward supplemental academic support in credit-bearing courses while restricting institutions from enrolling more than 10% of their students in noncredit-bearing remedial courses. The Area Technical College Grant Program Act (2019), also designed to improve the postsecondary attainment rate, has the goal of "mitigating the equity gap by offering affordable and accessible educational opportunities that allow students to graduate debt-free and enter fields with competitive wages and benefits."³

Changes to funding formulas

P-12

Given that the Taxpayer Bill of Rights (TABOR) in Colorado prohibits tax increases without voter approval, the only change to the state funding formula came in the form of The Public School Capital Construction Financial Assistance Act.⁴ This law requires that all state retail marijuana tax revenue be credited to the state's public school construction assistance fund. Although no other changes to the funding formula were made, lawmakers have acknowledged the need for long-term solutions to Colorado's education funding challenges. To this end, lawmakers extended for an additional year the term of a special committee tasked with examining the state's funding formula and proposing improvements.⁵

Higher Education

No changes in the funding formula for higher education were adopted this year.

Pressing state issues affecting funding

P-12

The need to address the Budget Stabilization Factor has been a pressing issue affecting P-12 public education since the Great Recession. Previously known as the "negative factor," this mechanism has allowed lawmakers since FY 2009-2010 to spend constitutionally-mandated education funds on other budgetary needs. In FY 2018-2019, the negative factor withheld approximately $675 million from public schools. The Public School Finance Act of 2019, however, will reduce the withheld amount to $572.4 million.⁶

Higher Education

The current funding formula for higher education, established in 2014, allocates funding primarily based on enrollment, rather than targeting specific needs or institutional goals. Critics point out that the enrollment-based model, in directing more money to the larger and more selective research institutions, does not help the state reach its goal of increasing post-secondary attainment rates for low-income and minoritized students, who predominantly attend smaller and rural institutions.⁷

Forces diverting funds from traditional public school districts

Although property values in Colorado increased at higher rates than economists had projected for 2019, the assessment rate of residential properties declined from 7.2% to 7.15%.⁸ This paradoxical combination of rising property values and declining revenues is a consequence of the Gallagher Amendment and TABOR, which together require reductions in residential assessment rates whenever the growth in value of residential properties outpaces that of nonresidential properties statewide.⁹ Before Gallagher was passed in...