What’s at stake in Colorado’s school-funding fight as teachers descend on Capitol

When teachers rally at the Colorado State Capitol on Thursday, the message they intend to bring to Gov. Jared Polis and legislators scrambling to fill a $1.2 billion shortfall is this: Stop using money for K-12 schools to balance the state’s budget.

The planned protest, led by the Colorado Education Association, is striking not only because thousands of educators are expected to participate and the gathering has forced some schools to close for the day, but because it also marks a turnabout for the state, which only a year ago celebrated the “fully funded era” for public schools.

Polis and legislators promised last year to eliminate a maneuver called the “budget stabilization factor,” which lawmakers have used since the Great Recession to divert money from public schools to other state budget priorities.

Lawmakers also created a new school funding formula that is supposed to allocate $500 million more toward K-12 education during a six-year period starting next fiscal year.

But now, legislators are considering giving districts less money than promised as they try to figure out how to plug that billion-dollar hole — leaving district leaders and teachers union representatives frustrated that lawmakers are backing away from last year’s agreement even before it kicks in.

“The deal has already been made,” said Scott Smith, chief financial officer of the Cherry Creek School District. “If (lawmakers) can’t honor that, they need to show up and tell the constituents of this state that, because of their spending habits, they have to cut K-12 again.”

Polis pushed back on accusations that public school funding is being slashed, noting that his plan calls for a $138 million increase to K-12 funding next year.

“We’d love to find ways to better fund schools, but the exercise this year is how do we create a balanced budget that increases funding for our schools,” he said in an interview.

Polis’s budget proposal

Polis has proposed changing the way Colorado determines how much per-pupil funding each district receives, something he said is needed to ensure the state can implement the new school funding formula.

Instead of using a four-year enrollment average as set under the deal struck last year, Polis wants to rely on a single-year enrollment count. In doing so, he said the state would save $147 million — as enrollment has fallen in many districts — and ensure it can still implement the new funding formula.

“There would be no money for that unless there was an infusion of money from voters or other sources,” Polis said. “…That is the mechanism for funding the new formula over time, fully delivering it, leading to significant funding increases for our schools.”

District leaders argued the governor is eliminating multi-year averaging as a way to cut the state’s budget without calling it a cut – something Polis denied.

“We actually told (districts) last year we’d have to get rid of averaging. They just didn’t want to hear it,” the governor said. “This year they have to hear it or they’re not going to get more funding. We have to increase their funding… you can’t increase funding out of nothing.”

By using averaging to set per-pupil funding, the state is paying for students who are no longer in school buildings, Polis said. For example, he said, if a student moved from Longmont to Denver, the state is paying for them in both districts after the pupil hasn’t lived in Longmont for several years.

“We need to invest in kids and teachers and not phantom students from years gone by,” Polis said.

Colorado Education Association President Kevin Vick pushed back on the assertion that schools are operating with excess funding. Class sizes are too large, staffing is turning over and schools struggle to provide enough mental health and other supports to students and districts, he said.

The reason teachers are rallying Thursday is to highlight that “schools cannot absorb anymore funding loss without drastic things happening,” Vick said.

So many educators are expected to attend the protest that major metro districts, including Aurora Public Schools, the Boulder Valley School District and Adams 12 Five Star Schools have canceled all classes districtwide.

More than 100 schools in Denver will also close, although Denver Public Schools plans to keep others open by using substitutes and central office employees.

The impact on school districts

School officials said averaging helps rural districts respond to changes in enrollment, which can create volatility given how small their student populations are.

Districts with declining enrollment will bear the brunt of the budget cuts if averaging goes away, said Brett Johnson, chief financial officer for Aurora Public Schools.

The method also gives districts, including those in metro Denver, a “soft landing” as they battle declining enrollment and weigh difficult decisions, such as closing schools, he said.

“That’s a policy change that is being used to cut our budgets,” Johnson said, adding, “K-12 isn’t always aligned on this… but on this, we are all-but-unanimously aligned that eliminating averaging is a bad policy idea.”

Unlike other metro districts, Aurora is experiencing an increase in enrollment thanks to an influx of immigrant students and higher housing demand. But the district benefited from averaging when enrollment first dropped a few years ago, Johnson said.

School districts are not just facing financial pressure due to the state’s budget gap, but also because of falling enrollment and potential federal funding cuts by the Trump administration.

Last month, DPS eliminated 38 jobs in its central office to save about $5 million. While the state’s largest district expects to balance its budget this year, Superintendent Alex Marrero acknowledged financial challenges in a letter to staff and families.

“We are facing great uncertainty compounded by significant concerns for our future funding from both the state and national levels,” Marrero wrote.

For Jeffco Public Schools, the state’s second-largest district, the end of averaging would lead to a $21 million drop in general fund revenue because 3,400 fewer students would be counted compared to the 2024-25 fiscal year. The district received $982 million in general fund revenue this year, according to a March 5 presentation.

The Cherry Creek School District will receive $17 million less than officials expected. Smith, the district’s chief financial officer, called Polis’s budget proposal a “non-starter.”

“The governor and the leadership and the legislature have spent themselves into a fiscal crisis and now they are trying to scapegoat K-12 to solve that problem for them,” he said.

Rep. Julie McCluskie, a Dillon Democrat, has proposed an alternative to the governor’s proposal, which would maintain four-year averaging but implement the new school finance formula at 10% rather than 18% of the $500 million.

She said the Joint Budget Committee has set aside $150 million in general fund money as a placeholder for education.

“As long as we have that $150 million, which is base funding we were anticipating, we should be able to afford the proposal that we have on the table right now,” McCluskie said.