More money

What Colorado’s booming economy might mean for the state education budget

More money is forecast to appear below the gold dome (Denver Post photo).

Gov. John Hickenlooper wants to put an extra $200 million into education next year and another $100 million in the 2019-20 fiscal year, but a lot of that money could go to offset hits to districts from anticipated reforms to the state’s pension program and reductions in local tax revenue.

The proposal comes in response to new economic forecasts released Monday that show Colorado having more money than previously expected.

Legislative economists predict that lawmakers will have a whopping $1.3 billion or 11.5 percent more to spend or save in 2018-19 than is budgeted in 2017-18. The forecast from the governor’s Office of State Planning and Budget predicts similar increases in revenue. After meeting the reserve requirement of 6.5 percent, Colorado will have an additional $492 million in reserve for this fiscal year, and even with a higher reserve of 8 percent proposed for next fiscal year, the state would have an additional $548.1 million in 2018-19. 

It’s normal for the forecasts to be slightly different because the economic analysts often use slightly different assumptions. In this case, the governor’s office predicts that the additional revenue will be more spread out over this fiscal year and the next one, while legislative economists think more of the money will be coming in next year. That difference means the legislative forecast shows the state potentially hitting the revenue limits imposed by the Taxpayer’s Bill of Rights, despite lawmakers making more room under the cap just last year, while the governor’s forecast does not.

These are the numbers that the Joint Budget Committee has been waiting for to finalize its recommendations for the 2018-19 budget year. Republicans and advocates for more transportation spending have already seized on the numbers to support a plan to ask voters to approve new debt to pay for road construction and dedicate up to $300 million a year to pay off that debt.

Of course, these forecasts are also inherently speculative – and legislative economists warned these forecasts contain even more uncertainty than usual.

State Rep. Millie Hamner, the Dillon Democrat who chairs the Joint Budget Committee, summed up the message as one of caution about dedicating too much of the new revenue to ongoing expenses. The more that gets committed, the harder it will be for the state to meet all of those commitments in future years.

Those who want to see Colorado spend more on K-12 education have pushed back on the Republican roads bill out of fear that the commitment could make it harder to send more money to schools in the future.

The governor’s budget director Henry Sobanet recommended treating much of this new money as “one-time” funds that should go to “one-time” uses. In a letter to the Joint Budget Committee, he laid out a plan.

In the case of roads spending, he’s recommending an extra $500 million for road construction in 2018-19, but only $150 million in 2019-20. And in the case of education, he’s recommending an additional $200 million in 2018-19 and an additional $100 million the following year.

However, this extra money might not show up in classrooms – or rather, it might show up in a lack of cuts rather than new money.

The governor’s budget request already called for a reduction in the budget stabilization factor of $100 million. That’s the amount by which Colorado underfunds K-12 education compared to the requirements of Amendment 23. In this budget year, it’s $822 million, after a mid-year adjustment. Some of the extra money could go toward reducing it even further.

However, Sobanet said he envisions most of it going to offset reductions in local property tax revenue that will be caused by a provision of the Colorado constitution that governs the ratio between residential and commercial property tax revenue.

It’s also possible that school districts could end up having to pay more toward some sort of agreement on changes to the Public Employees’ Retirement Association, or PERA. The final form of reforms to PERA is far from certain.

“Another downgrade in the residential assessment rate means more state share to keep total per pupil spending up,” Sobanet said. “We know that since the December announcement of property taxes and since we know PERA might be on the table for something, let’s set aside some resources and make sure we can handle this.”

Still walking

Colorado teachers plan more walkouts, and Jeffco canceled classes one day next week

Colorado teachers march around the state Capitol Monday, April 16, to call for more school funding and to protect their retirement benefits. (Erica Meltzer/Chalkbeat)

Teachers from Colorado’s two largest school districts are planning back-to-back walkouts next week to call for more funding for education – and they could be joined by other districts.

Jeffco Public Schools canceled classes for April 26, next Thursday, after many teachers there said they plan to go to the Capitol, while the union representing Denver classroom teachers said they plan to walk out midday April 27, next Friday, to rally at the Capitol early in the afternoon.

In a press release, the Denver Classroom Teachers Association said Denver teachers would be leading a statewide walkout. Corey Kern, the union’s deputy executive director, said he’s not sure yet how many other districts will be represented.

The announcements come after hundreds of teachers marched at the Capitol during a day of action Monday to protect their retirement benefits and call for more school funding. Enough teachers left the suburban Englewood district that classes were canceled there.

Colorado consistently ranks in the bottom tier for school funding and teacher pay, though there is considerable variation around the state. A recent study ranked Colorado last for the competitiveness of its teacher salaries, and nearly half the state’s districts are now on four-day weeks. The 2018-19 budget takes a big step toward restoring money cut during the Great Recession, but the state is still holding back $672 million from what it would have spent on K-12 education if it complied with constitutional requirements to increase per-pupil spending at least by inflation each year.

The wave of teacher activism reflects a national movement that has seen strikes, walkouts, and marches in West Virginia, Oklahoma, Arizona, and Kentucky. Unlike other states, lawmakers here can’t raise taxes to send more money to schools or approve teacher raises on their own. Voters would need to approve more money, and local school boards would need to increase salaries.

Teachers interviewed at Monday’s march said they recognize the fiscal constraints in Colorado, but they’re also inspired by the actions of their colleagues in more conservative states.

Many teachers also said they fear that reductions in retirement benefits could lead to an exodus of younger teachers, further squeezing a profession that struggles to recruit new workers and suffers from high turnover.

A House committee made changes to a pension overhaul this week that removed the provisions teachers found most objectionable, like raising the retirement age and making teachers pay more out of their paychecks, but the final form of the bill still needs to be hashed out between Democrats in the House and Republicans in the Senate.

Jason Glass, superintendent of the 85,000-student Jefferson County district, sent an email to parents Tuesday that said classes would be canceled next week due to a “labor shortage.” Teachers who miss school are required to use their allowed leave time.

Glass called the level of education funding in Colorado “problematic.”

“Public education staff, parents, and other supporters have become increasingly vocal in their advocacy for increased funding for our K-12 public schools and the stabilization” of the state pension plan, he wrote. “There is a belief among these groups that years of low funding is having a significant impact on our ability to attract quality candidates into the teaching profession, and is impeding the ability to effectively deliver the high level of educational experience our students deserve.”

Glass apologized for the “inconvenience” to families and reminded parents that April 26 is also “Take Our Daughters and Sons to Work Day.”

Denver Public Schools, the state’s largest district with 92,000 students, announced late Tuesday that there would be early dismissal April 27, with more details to come.

“Officials across the country and specifically lawmakers in the statehouse must finally recognize that a quality education cannot be provided on the cheap.” Denver union president Henry Roman said in a press release about the walkout. “If we want Colorado’s current economic prosperity to continue, we need to realize the importance of strong schools.”

Advocates are trying to place a $1.6 billion tax increase for education on the November ballot. Voters have twice rejected similar measures in recent years.

priorities

With school finance act, Colorado lawmakers try to pass the hot potato of teacher pay to local districts

State Rep. Barbara McLachlan, a Durango Democrat, calls for more money for education during a rally with teachers and fellow Democratic members of the House Education Committee at the Capitol Monday, April 16. (Erica Meltzer/Chalkbeat)

A school finance act that puts more money into K-12 education than Colorado has spent at any point since the Great Recession passed a key House committee Monday with easy bipartisan support.

Democratic lawmakers on the House Education Committee urged local school boards to turn this money into teacher raises – and Colorado voters to provide even more funds next year.

The hearing on the school finance act occurred as hundreds of teachers descended on the Capitol as part of a day of action to ask for more school funding and protections for retirement benefits. Before the hearing started, Democratic committee members met with teachers in the foyer of the Capitol and joined them in chants of “not enough” and “no more B.S.,” a reference to the state’s budget stabilization or “negative” factor. That’s the difference between what Colorado spends on schools and what it’s constitutionally required to allocate, based on inflation and numbers of students.

A group of education advocates hopes to place a $1.6 billion tax increase for schools on the November ballot. Colorado voters have twice before rejected tax increases for education, most recently in 2013.

“We need to support our teachers, and we need to support our schools, and we need you to ensure not only that we pass the bills that we are bringing this session, but that we unite this November to ensure our kids are put first in Colorado,” said state Rep. Brittany Pettersen, the Lakewood Democrat who chairs the House Education Committee.

The school finance act, which provides more detail on the education funding already set aside in the 2018-19 budget, calls for a little more than $7 billion in total program spending in 2018-19, a 6.95 percent increase from this year. The state portion is $4.5 billion, a 10 percent increase from this year; local districts would provide $2.5 billion, a 1.4 percent increase.

In addition to mandated budget increases, the bill adds $150 million more for education. That leaves the negative factor at $672 million, the smallest it has been since this budget maneuver was created during the Great Recession.

Average per-pupil spending for 2018-19 will be around $8,137, a $475 increase from this year.

During the hearing, state Rep. Barbara McLachlan, a Durango Democrat, asked Matt Cook of the Colorado Association of School Boards why teacher raises seem to come last when districts get more money, and state Rep. Alec Garnett, a Denver Democrat, asked if the legislature needs to have more oversight of how districts spend state money. Colorado does not have a statewide teacher salary schedule, and districts have a lot of discretion on how they set their budgets.

“The people on the ground are hurting,” Garnett said. “They can’t meet their basic needs. And I want to help them, but it’s really your members who hold the key to their solution.”

Colorado consistently ranks in the bottom tier for school spending and teacher pay, and a recent study ranked Colorado last for the competitiveness of its teacher salaries.

Cook said school boards are acutely aware of how low pay hurts their ability to hire and keep teachers. The availability of more money from the state will be a factor in union negotiations currently underway in districts around the state, he said.

But districts have to balance teacher pay with a wide range of needs, including services for students learning English and students with disabilities that are not funded by the state at their full cost, he said.

“We recognize that a qualified, highly motivated teacher in the classroom is a major part of a child’s education,” Cook said. “We’re doing the best we can. Nobody wants to not pay teachers.”

School district representatives told the committee that a promising state budget forecast is already turning into more services for students. An official from the Adams 12 Five Star district said the district had increased interventions for students with dyslexia in anticipation of more state money, and a superintendent from the rural Hanover district said $30 million in extra funding for rural schools – first allocated last year and now extended for a second year – allowed him to hire a second science teacher and a school counselor.

State Rep. Jim Wilson, the Republican co-sponsor of the school finance act and a former district superintendent, said he could just as easily ask lawmakers why the entire $1.3 billion budget surplus isn’t going to schools.

“I won’t ask you to answer that because you already know the answer,” he said. “That’s the same situation that a school district finds itself in.”

The school finance act also:

  • Sends an extra $30 million to rural schools,
  • Creates 1,000 new spots for children with certain risk factors in publicly funded preschool and kindergarten,
  • Allocates money for English language learners based on the actual number of students at various levels of need, rather than dividing it based on a formula,
  • Calls for any general fund surplus at the end of this budget year to go into education next year,
  • Requires that the negative factor for 2019-20 not be any larger than it is in 2018-19.

The school finance act still needs to pass the full House before it goes to the Republican-controlled Senate.