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July 20, 2024

$36 billion Colorado budget boosts K-12, higher ed spending

Colorado’s proposed $36 billion 2022-23 budget places significantly more money into K-12 classrooms and higher education while avoiding steep tuition hikes. But facing inflationary pressures and economic uncertainty, lawmakers on the Joint Budget Committee stopped short of developing a plan to reach full funding for K-12.

Colorado’s coffers are currently full with federal relief money and tax revenue from a strong economic recovery, but that only helps the budget so much. Federal funds won’t be replenished, and under Colorado’s Taxpayer’s Bill of Rights, the state can’t keep money above a cap determined by inflation and population growth. Taxpayers are expecting refunds of $2 billion this year and $1.6 billion next fiscal year.

Introduced in the House Monday, the budget calls for a 3% raise for state employees and sets aside 15% of appropriations or roughly $2 billion in a rainy day reserve. General fund spending is up 12.7% to $13.6 billion. After two weeks of amendments and lengthy debates in both chambers, the budget goes back to the Joint Budget Committee, where the six members usually reject most of the amendments before sending the budget back to the legislature for final approval. Approving the budget is the only action the legislature is required to take before adjourning May 11.

The budget allocates $7.2 billion for K-12 education, an 11.7% increase from this year. That amount includes more than $5 billion for school districts, as well as grant programs, the operating budget of the Colorado Department of Education, and other programs outside the core education budget.

Including local property tax revenue, total base spending for K-12 classrooms is estimated to be $8.4 billion, a 5.4% increase from this year. Average per-pupil spending would be $9,560, $545 more than this year, a 6% increase.

Colorado’s constitution requires that education funding increase every year by population and inflation, but since the Great Recession, lawmakers have withheld money to pay for other budget priorities. This amount, known as the budget stabilization factor, has totaled more than $10 billion over the last decade.

The budget proposal sets next year’s withholding at $321 million, down from $503 million this year, the lowest it’s been since 2010. This represents a dramatic improvement for schools from two years ago, when lawmakers withheld more than $1 billion at the depths of a pandemic-related economic downturn.

However, lawmakers on the Joint Budget Committee had hoped to come up with a plan to fully fund schools by 2024 or sooner. The March economic forecast dashed those plans by predicting average annual inflation of 7.1% through this year, along with the potential for a ballot measure that would reduce property tax revenue. Without rising local revenue, increasing state funding over time becomes less sustainable, state budget analysts said.

Many details of school funding get worked out in a separate school finance act, but the budget includes a placeholder for a 38% increase in special education funding. Another $262 million in general fund money is set aside for potential education legislation making its way through the legislature.

The budget also sets aside $16 million, a 77% increase, for charter schools authorized by the state. School districts have to share a portion of voter-approved tax increases with the charter schools they authorize, but state-authorized schools don’t get that money, leaving them with less per-pupil revenue. New money in the state budget makes up for some of that difference.

The budget also includes an additional $2 million in grants to improve instruction. These will be available to a wider group of schools as the state transitions back to the school accountability system.

The budget allocates $8.2 million to get a new Department of Early Childhood off the ground in preparation for launching universal preschool in 2023.

Colleges and universities secure more funding

The state budget for higher education would grow to about $5.4 billion next fiscal year, or a 4.3% increase over this year. The funding includes state and federal spending, as well as tuition revenue.

The budget would send about $129.6 million in state money to colleges and universities for operating and financial aid increases.

The state would grant colleges and universities $105.3 million in general funding, 11.4% more than this year. The state would also increase financial aid by $24.3 million.

Gov. Jared Polis pitched in November a $52.5 million increase for colleges and financial aid.

But 15 college and university presidents issued a warning in a January letter that his proposal wouldn’t meet the cost of pay raises for public employees outlined in the budget, as well as the rising costs of health care, goods, and services. School leaders said they’d need nearly 3.5 times as much. The letter said to meet those obligations, they’d need to make cuts that would hurt students, especially those most at risk of not graduating, or steeply raise tuition.

Despite the better outlook for colleges and universities in next year’s budget, tuition will still increase.

Under the proposed budget, the state assumes tuition at most institutions for resident undergraduate students would increase 2%. For out-of-state students, tuition would rise by 3%.  The University of Colorado System would increase tuition by 4.3% for freshmen and then freeze tuition for them for four years.

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