School Finance

Changes�������

August 2024

Colorado School Finance Project

Scan here to sign up for Adequacy Study panels!

Who is CSFP?

• Non-profit, non-partisan
• Supported by school district contributions
• School finance analysis for local and state policy makers since 1995
• Governed by a board comprised of national and state experts on school finance

Our Mission: To compile, collect and distribute research-based, non-partisan information and data on topics related to school finance for state and local policymakers. CSFP also supports school districts by providing expertise, technical assistance and capacity building related to best practices in school finance.

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August 2024

Changes are Here

What will influence these changes:

• Adequacy Studies completed in January 2025
• November Ballot – property tax
• At-Risk to be changed in 2024-25 legislature
• Legislative makeup in 2025 – PERA litigation?

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August 2024

What is the policy for change?

• Has policy been clearly defined in the areas focused on change?
• Can policy be clearly outlined with objectives?
• Do the changes reflect the policy?
• Does the formula reflect the policy?
• If they require a hold harmless or carve out for certain districts, then the formula is wrong.
• A new formula shouldn’t require a hold harmless.

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August 2024

Adequacy Studies

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Have any of you applied for the professional judgment of evidence-based panels?

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It’s not too late to take part!

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Scan here to sign up for Adequacy Study panels

August 2024

Adequacy Studies

• Two different studies being completed.
• One study by the APA team (Alan Odden and Larry Picus, Afton and Tracie Rainey, Molly Homburger)
• Input approach
• AIR – Output approach
• Both approaches will analyze the current funding formula, and the potential changes outlined in 1448.
• Both approaches will be doing surveys that will reach a broad audience.

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August 2024

Adequacy Studies contd.

• The input model will utilize educators in the field for professional judgment panels and evidence-based models.
• The professional judgment panels will ask for individuals from districts various size districts in order build the resources needed to meet the expectations that the state requires.
• These panels will include, teachers, administrators, specialists, superintendents, CFO’s and paraprofessionals.
• These panels will meet virtually for 6 hours between Aug-Oct.

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August 2024

Adequacy Studies – cont.

• These panels will begin at the school level, that builds to the district level, and ultimately a statewide review panel. There are panels for Special Needs, remoteness, and all will include charters schools.
• The end result will produce a base level of funding, adjustments for student and district characteristics.
• There will also be an in-depth analysis of special education – which will hold panels representing different stakeholders.

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August 2024

Output Adequacy study

• The study will provide a base level of funding and adjustments for student and district characteristics.
• It is a statistical model and therefore doesn’t utilize panels of educators in their analysis.
• Reconciliation of the two studies will be important so that an explanation of the differences can be understood by the stakeholders. We are hopeful to provide this as part of this work.

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Questions?

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Sign up for panels

August 2024

November Ballot

November 2024 Ballot

• There are two initiatives – 50 and 108 that could dramatically change local share for all local governments. The dramatic loss in local share of revenue could impact school district funding.
• The backfill needed could be $1.5 billion for K-12 annually.
• The bluebook analysis will be available soon – in the drafts it alludes to bringing back the B/S factor.
• If the property tax measure passed in the 2023-24 session will not go into effect for the current year and assessment rate would increase to 7.15% before the new measures would be enacted.

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August 2024

At-Risk�Changes

At-risk changes and HB24-1448 – new legislators

• The legislature will have new members in November – they will have to decide how to implement the recommendations from CDE on at-risk. This will change how students qualify for funding.
• Items for consideration: does it accurately reflect the students who need services? How difficult/or time consuming for districts to put in census data for each student.
• It will be important to ensure that the formula represents the intended policy.

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August 2024

SB24-233�Property Tax�Bill and 2024 Ballot Initiatives�����

Property Tax Bill - SB24-233

• Property tax bill based on work from Commission on Property Tax that has been meeting since December 2023
• The bill recognizes local governments differently from public schools
• For school districts for 2023-24 assessment year, the current assessment rate remains in place at 6.7%
• Beginning in the year 2025-26, residential assessment rate will increase to 7.15% with a goal of local revenue reflecting 60% of total program funding
• Assessment rate cannot go above 7.15%

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Access full bill here.

August 2024

Property Tax Bill cont’d

• Reduces the valuation of non-residential property stairsteps down from 29% to 25% by January 2027
• State will need to backfill loss of K12 funding $352M in 2024-25
• $74M in 2025-26
• $113M in 2026-27
• No reimbursement for override or bond mills
• Residential property valuation reduced from 7.16% to 6.7%
• Provision that if ballot initiatives are passed this November, then bill will pause

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August 2024

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Access full fiscal note HERE.

August 2024

November Ballot

▰There are two initiatives – 50 and 108 that could dramatically change local share for all local governments. The dramatic loss in local share of revenue could impact school district funding.

▰The backfill needed could be $1.5 billion for K-12 annually.

▰The bluebook analysis will be available soon – in the drafts it alludes to bringing back the B/S factor.

▰If the property tax measure passed in the 2023-24 session will not go into effect for the current year and assessment rate would increase to 7.15% before the new measures would be enacted.

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August 2024

SB24-188�Public School Finance Act

Public School Finance Bill – SB24-188

• Paid off the Budget Stabilization Factor
• Created a Rural Factor for districts 6,500 and less with a guaranteed of $100K minimum per district
• At-risk – districts determine the better of the funding from the last 2 years.
• CDE has been tasked to implement new at-risk measure for 2025-2026 school year

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August 2024

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August 2024

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Access full fiscal note here.

August 2024

SB24-228�TABOR Refund Mechanisms

TABOR Refund Mechanisms– SB24-228

• Legislation only takes effect when there is TABOR surplus
• Temporary income tax reduction from 4.4% to 4.25%
• Given our projected refunds is over $1.5B
• Income tax reduction adjusts based on TABOR refund amounts
• Temporary sales tax reduction is activated if TABOR surplus is over $1.5B
• This reduction is 0.13%

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Access full bill here.

August 2024

TABOR cont’d

• Projected TABOR refunds by legislative council:
• $2.77B for 2023-24 to be paid in 2024-25
• $2.90B for 2024-25 to be paid in 2025-26
• $2.98B for 2025-26 to be paid in 2026-27
• Sales tax refund is applied through the 6-tiered mechanism

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August 2024

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August 2024

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Access full fiscal note

HERE.

August 2024

HB24-1302�Tax Rate �Information to Real Property �Owners�����

Summary of Legislation - HB24-1302

The bill requires taxing authorities to submit information about the structure of their mill levies with the annual certification of levies starting with the 2024 property tax year. The information is required to be available on request in 2025, and thereafter made publicly available. The required information includes:

• The rate of each levy that the taxing authority imposes;
• The prior year levy and revenue collected from it;
• The maximum levy that may be levied without further voter approval;
• Allowable annual growth in revenue collected from the levy;

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August 2024

Summary of Legislation cont’d

• Actual growth in revenue collected from the levy over the prior year;
• Whether revenue from the levy is subject to TABOR limitations;
• Whether revenue from the levy is subject to the statutory 5.5% local revenue growth limit;
• Whether revenue from the levy is subject to any other limit;
• Whether the levy must be adjusted, or a credit allowed, to limit revenue collected for the tax year and the amount if applicable; and
• Any other information deemed necessary by the Department of Local Affairs.

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August 2024

HB24-1302

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Access full bill here.

Access full fiscal note here.

August 2024

Things to Consider

• Annual notice of valuation in May will no longer have to include an estimate of taxes owed.
• Are you in communication with local assessors - what are they thinking as they prepare to implement?
• Department of Education updates and provides technical assistance for a mill levy certification form used by school districts

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August 2024

A new legislature and PERA litigation?�����

On the horizon

• A new legislature in January.
• Will they have the same priorities as the prior legislature on 1448?
• How will the adequacy studies play into decisions?
• How will PERA potential lawsuit impact legislature and K-12?
• Thoughts?

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August 2024

Questions?

• Tracie Rainey�t.rainey@cosfp.org�303-860-9136

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Stay connected

• https://cosfp.org/
• @COSFP
• Colorado School Finance Project -Facebook

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