Colorado overhauls student funding model for K-12 schools

In Colorado, the ways public schools are funded has changed with a new proposal aimed at overhauling the student funding formula in the 2024- 2025 fiscal year.

These new changes were spurred by Senate Bill 23-287, which increased the statewide base per pupil funding, set a new statewide base per pupil funding, and set the target number for the 2023-2024 budget.

Under this new funding model, Colorado’s 178 school districts would see the almost 880,000 students receive an additional $474 million, raising the total per-student funding by 4.9 percent with a focus on accounting for poverty, English language learners, and cost of living, among others.

The twenty-member Public-School Finance Task Force was tasked with developing recommendations to support the funding change that helped create a “simpler, less regressive, more adequate, understandable, transparent, equitable, and student-centered” funding model in the state.

The task force had nine meetings from Aug 2023 to Dec 2023, with the finalized the report being introduced at a 10^th meeting in January 2024 to present to the state legislature.

The approved recommendations, which had to be formally motioned, seconded, and approved with a majority vote, focus on student needs, cost of living factors, and multiplicative indexes.

Funding Formula Changes

Specifically, the first ten recommendations developed by the task force focus on the funding formula in the state and recommend to:

• increase the base funding levels for student education in Colorado
• increase the at-risk weight to at least 0.31 and remove the cap (0.3) on the total possible at-risk weight
• increase ELL weight to at least .5 on total possible ELL weight.
• Include additional Tier A and B student weights in the formula
• Remove personnel and non-personnel factors from the funding formula and move cost of living (COL), size factor, and any additional district weigh factors from the preliminary per pupil calculation to the end of the formula in a “district adjustment”
• Rebase the cost of living (COL) factor utilizing 2021 as a base, with it happening every two years at a minimum
• Establish additional or alternative factors (including a potential “cost of doing business” factor) that account for the additional cost of districts to hire and retain staff and the increased cost of basic business needs
• Establish a minimum cap of 0.1 to the cost-of-living factor
• Utilize the current size factor calculation but remove the size factor for districts educating 1,027 students or more
• Recommend legislatures to revisit and update the base and need weights

Additional Recommendations

The additional seven recommendations focus on the needs of students, charter schools, and student needs and recommend to:

• Utilize categorical funding to address students with complex or higher special needs
• Utilize categorical funding to address gifted and talented students with a weight of at least .25 to identified students
• Continue to fully fund the existing MILL Levy Equalization Fund
• Continues to address Mill Levey Override Equalization for all students in Colorado
• Understand that these recommendations have a combined effect on schools, and the legislature should avoid taking them in isolation
• Phasing in changes to the new formula for no longer than a 4-year time period utilizing hold-harmless
• Commission two adequacy studies that meet the intent of the legislature

With these recommendations having widespread support from all members of the task force, there were minority reports authored by five members of the task force that  outlined the following concerns:

• the weight for at-risk students being too low,
• the cost of living  cap  denying students “funding for education they need and creates a gross inequity by zip code”
• the district-based weights are “insufficient” and “excludes too many districts from qualifying,  
• and the funding of the mill-level equalization fund does not do enough to address systematic inequities in the state.

This change in how education is funded in Colorado comes 30 years after the last change in 1994, when there were less than 600,000 students in the state compared with the population in 2024, with over 880,000 students in Colorado.

Implementing these changes for the fiscal year 2025 would require an investment of $64.1 to ensure no district in Colorado would receive less total funding because of the specified formula changes.