Explaining school financing

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As we begin to build our budget for the 2016-17 school year, I thought I would inform the stakeholders of our school district of the problem of school finance and the challenge it presents in our state. With the entire state in a pie chart, K-12 Education is 40% of the State’s budget. The other areas are Healthcare Policy (like Medicaid), Human Services, Corrections/ Public Safety/Judicial and Higher Education.

According to the Colorado School Finance Project our state spent 12% less in 2013 on K-12 than they did in 2008. Colorado spent 8.37% below the US average. In 2011, Colorado ranked 44th in funding for K-12 per $1,000 of personal income. There are only six other states that spend less on education than our state does. Just to get to the national average, Colorado would have to spend almost $2,000 more per student. In Education Week’s Quality Counts report for 2015, Colorado earned a grade of D+ for its school finance system. Within that report, Colorado received a B+ for equity within its finance formula, but an F for overall spending. This same report showed that Colorado’s per-pupil funding for K-12 education is more than $2,700 below the national average. I believe schools could provide a number of wonderful opportunities for our students if Colorado were merely average in regards to education funding.

Our schools are funded by local property taxes and by the state, in what they call “equalization.” This means, if our school district can’t operate on our local monies that we collect in property taxes, the state will then cover the rest of it out of the state budget. Our school is funded on a complicated formula based on student enrollment. Our total budget is around $4.3 million dollars, which is figured on student count. As the student count goes down, per pupil funding goes up to create stabilization. For example, West Grand’s funded pupil count in 2011-12 was 446.7 students and we received $7,881 per pupil. That is compared to our 2015-16 count of 429.2 at $8,822 per student. Also figured into this formula is students that are “at risk”, mostly based on our Free/Reduced lunch percentages. We get approximately 65% of our $4.3 million through our local property taxes of residential and commercial properties in our school district, while the state picks up the other 35%. All of these figures are calculated after the “negative factor.”

As we hit the halfway mark in the Legislative session on Capitol Hill in Denver that ends in May, we have to be diligent as to any new monies that are coming our way due to the “negative factor.” In 2009, the Colorado State Legislature added another factor to the finance formula to help balance the State’s budget. This became known as the “negative factor” and is the mechanism the state uses to reduce funding for schools, and, subsequently balances the State’s budget.

For the 2016-2017 school year, the negative factor is estimated to be at approximately $522,000 for the West Grand School District and $850,000,000 statewide. Over the past five years, the state has taken over $2.5 million from West Grand School District to help them balance the state’s budget. If you have any questions about school finance or how schools are funded, please feel free to call me at 724-3217 or email at [email protected]