School District Budget Overview

March, 2026

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The Telluride School District will support each and every student in achieving personal success through quality academics while addressing individual needs within a safe and healthy community.

Each and every student will achieve personal success through quality education

• Colorado’s new education funding formula (HB24-1448) negatively impacts Telluride, and would have required us to seek a voter-approved Mill Levy Override increase in 2028

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• Changes to the new funding formula (HB25-1320) increase the negative impact on Telluride, and now require us to seek a voter-approved Mill Levy Override increase in 2026

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• Declining enrollment is a contributing factor to our projected decrease in funding

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Executive Summary

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• Between 2019-20 and 2025-26
• Actual Enrollment decreased by 15%
• Funded Enrollment decrease by 12%
• Total Program Funding increased by 29%
• Average Teacher Salary increased by 30%

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• Between 2025-26 and 2032-33
• Actual Enrollment is projected to decrease by 18%
• Funded Enrollment is projected to decrease by 21%
• Total Program Funding is projected to decrease by 22% (excluding the impact of inflation over 8 years)

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• In 2025-26
• “Adequate” Total Program Funding is projected at $15.4M
• Our Actual Total Program Funding is $13.4M
• New Total Program Funding fully phased with the new state formula would have given us $11.2M if we were not in hold harmless status

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Executive Summary

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• Declining Enrollment
• Colorado School Finance Funding Formula
• 1994 School Finance Act (SFA1994)
• HB24-1448 – revision to SFA1994
• HB25-1320 - revision to HB24-1448
• Adequacy Studies – what we “should” be funded

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• Multi-Year averaging for Funded Pupil Count (FPC)
• Inflation Rate

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Factors Impacting Total Program Funding

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Factors Impacting Total Program Funding

Declining Enrollment and Funded Pupil Count

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• SFA1994 used “5-yr averaging”, which took the best of current yr, 2-r, 3-yr, 4-yr, or 5-yr; with declining enrollment using the higher numbers from previous years gives a higher average
• HB24-1448 moved this to 4-yr averaging in the new formula
• HB25-1320 moved this to 3-yr averaging, with a mechanism to allow a move to 2-yr averaging depending on economic conditions. There had even been a proposal by the Governor to go to 1-yr, which was fought off.
• There is currently a compromise being worked on between 3-yr and 2-yr.
• Any move to a smaller number for averaging hurts us a lot.

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Factors Impacting Total Program Funding

Funded Pupil Count

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• SFA1994: In SFA1994, Telluride had a “Cost of Living (COL)” factor of 1.59, one of the highest in the state. This meant a state base per-pupil rate was multiplied by 1.59, along with other adjustments, in determining our district-specific Per Pupil Rate (PPR), to determine our Total Program Funding.
• HB24-1448:
• In addition to moving to 4-yr averaging, HB24-1448 set a maximum COL factor of 1.23, which significantly hurts Telluride. In addition, a “Locale Factor” was added which hurts us specifically because the Telluride population went from just under 2,500 to just over 2,500.
• HB24-1448 was planned to be phased in over 5 years, because it puts more money into education across the state and the state did not have funds to jump straight into the new formula. Most districts will get more funding under HB24-1448, but Telluride (and a few other districts), will lose money. To “help” the districts who lose, the state did two things:
1. Changed the maximum allowable Mill Levy Override (MLO) for Telluride from 30% to 50% of Total Program Funding (each district has a new max; Telluride’s is the highest in the state)
2. Kept us in a “Hold Harmless” state by funding us with SFA1994 funding until the end of the 5 year phase in period

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Factors Impacting Total Program Funding

Colorado School Finance Funding Formulas

Funded Pupil Count x Per Pupil Revenue = Total Program Funding

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• HB25-1320: Because the state was facing its own budget issues, it passed HB25-1320.
• This put less money into implementing HB24-1448 for 2025-26
• This put 4-yr averaging for 2025-26 for everyone, including Hold Harmless districts, and 3-yr averaging for 2026-27 for everyone, including Hold Harmless districts.
• This flat dollar funded Telluride for 2025-26 and 2026-27 at 2024-25 funding.
• All of this hurts us even more moving forward.

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• HB26-????: The state is in even worse trouble this year, and is looking for ways to “save” even more money.
• They may force 2-yr averaging on everyone
• They may tinker with Specific Ownership Taxes (SOT)

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Factors Impacting Total Program Funding

Colorado School Finance Funding Formulas

Funded Pupil Count x Per Pupil Revenue = Total Program Funding

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The PPR Base Rate set by the state each year is impacted by the Inflation Rate determined the previous December. In general, the higher the Inflation Rate, the higher the increase to PPR, and therefore Total Program Funding (the exception is our current Flat Dollar Funding Hold Harmless from HB25-1320).

• The December 2022 Inflation Rate was 3.5%, and we increased wages by 4.47% on average for 2023-24.
• The December 2023 Inflation Rate was 8.0%, and we increased wages by 10.0% on average for 2024-25.

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CONCLUSION: This perfect storm of factors (declining enrollment, new formula with lower COL, smaller-yr averaging, and locale factor) are combining

to negatively impact our funding.

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Factors Impacting Total Program Funding

Inflation Rate

Funded Pupil Count x Per Pupil Revenue = Total Program Funding

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Funding and Staffing Projections

What is the impact of the perfect storm?

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1. Our current Mill Levy Override of 30% is tied to Total Program Funding, so as Total Program Funding decreases, our MLO decreases, and we lose more money.
2. Total Program Funding is tied to the Funding Formula, not to how much tax we collect (which is called Local Share). Local Share is typically less than Total Program Funding. In a few years, our Local Share will exceed Total Program Funding, so we will be able to keep the excess we collect of Local Share beyond Total Program Funding unless and until they change the laws. That will help us.
3. On top of property tax, we collect Specific Ownership Tax (car registration, etc.). Currently we have flexibility in how we use this, but the state is trying to change this in a way that effectively takes that money away from us.
4. We also get (minimal) grant funding in addition to all the funding we have discussed.

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Additional Information

It’s more complicated than the explanation so far

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1. Reduce staff as enrollment declines without negatively impacting class sizes and quality of education.
2. Pass a Mill Levy Override increase to bring our MLO from 30% to 50% of Total Program Funding. This increase would:
• Raise an additional estimated $2.674M for school district operations
• Increase the education tax rate by an additional estimated 1.63 mills
• Increase taxes on a $1M residential home by an estimated $115.07
• Increase taxes on a $1M business by an estimated $440.71
3. Advocate for state ballot measures to improve education funding:
• Potential 2026 CEA-lead ballot measure to allocate Tabor surplus to education funding.
• Potential 2026 ballot measure to change state income tax structure and dedicate increased revenue to education (and other stuff)
• Future ballot measures to fund education to the levels recommended by the Adequacy Studies.
4. Pressure our state government to adequately fund education.

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What do we need to do?

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