This story was produced as part of the Colorado Capitol News Alliance. It first appeared at coloradosun.com.
Colorado’s spending plan for K-12 schools was among the first bills lawmakers introduced during this year’s session and among the last pieces of legislation they passed, bookending an especially grueling 120 days that included moments of concern over potential school funding cuts.
Despite having to fill a roughly $1.5 billion state budget hole, however, the General Assembly avoided taking an ax to K-12 education. In fact, lawmakers increased education spending to nearly $10.2 billion as Colorado continues to ramp up a new school funding formula.
“No surprises,” state Sen. Chris Kolker, a Centennial Democrat and a sponsor of the school finance bill, said. “No shenanigans. And we kept it transparent.”
But it wasn’t a complete slam dunk for K-12 education. Among the more high-profile programs that the legislature cut for the sake of the state budget is the Teacher Recruitment Education and Preparation program, which helped high school students get a jump on pursuing teaching as a career. The program will end in 2027, serving one more class of high school seniors.
Still, school district officials say they saw lawmakers putting in the effort to protect education.
“The state has a very hard budget,” Chuck Carpenter, chief of finance for Denver Public Schools, the state’s largest district, said in an interview. “It’s a very tough economic environment in the state, and I think it was a pretty good outcome for K-12 as a whole.”
School funding conversations aren’t over yet. Lawmakers referred a measure to the November ballot asking voters to forgo refunds issued through the Taxpayer’s Bill of Rights in order to steer more money to education.
Signatures are being gathered for a separate ballot measure that would generate more funding for schools by introducing a graduated income tax structure to replace Colorado’s flat income tax structure.
Should voters approve one or both ballot initiatives, an infusion of funding could give Colorado the money to continue rolling out its new school funding formula and could also insulate schools from future cuts, particularly with another stormy budget year on the horizon, lawmakers say.
Here’s a recap of some of the most consequential decisions the legislature made for Colorado district budgets and a roundup of some of the funding questions still waiting for answers.
Lawmakers buffered K-12 education against big funding cuts
Many educators, public school advocates and even some elected officials have long pushed back against what they see as chronic underfunding of Colorado education, accusing the legislature of repeatedly balancing the state budget “on the backs of students.”
They softened their criticisms this year as the General Assembly continued marching forward with a school funding formula adopted in 2024, albeit with some adjustments.
“Legislators recognized that investing in kids is the most important investment we can make as a state and that after years of underfunding public schools we still have a long way to go, so prioritizing every dollar possible for students is really important,” said Melissa Gibson, executive director of the Colorado Association of School Executives.
The state is continuing its phase-in approach with its new school funding formula, which will provide schools an additional $500 million once the new formula is fully implemented. As of now, that will be in the 2031-32 fiscal year.
For the most recent school year, the state gave districts an additional $75 million, equal to 15% of the total $500 million. Next year, it is on track to give districts an additional $150 million, or 30% of the $500 million.
Kolker, a sponsor of Senate Bill 23, the school funding bill introduced at the start of this session, said keeping education funding intact was “a bipartisan priority.”
“I put a flag in the ground,” he said. “This is the basic funding we expect to do with the way it was written in the beginning and the JBC (Joint Budget Committee) held to that.”
State Sen. Barbara Kirkmeyer, a Brighton Republican and a member of the JBC, said safeguarding K-12 funding was critical not only because it’s a constitutional mandate but also because it’s a launch pad for the rest of kids’ lives.
“I think education is the way that we get children out of poverty, we get children the opportunity for a great career in life,” Kirkmeyer said. “If we want children to be able to succeed, I think the way they succeed is by getting them a good education.”
State Rep. Emily Sirota, a Denver Democrat and chair of the JBC, which makes final state budget recommendations, said lawmakers are well aware of the funding shortfalls districts repeatedly faced in recent years. School districts lost out on a collective $10 billion over 15 years that began during the Great Recession, when the legislature introduced the budget stabilization factor. The state budget-balancing tool allowed lawmakers to give schools less funding than the amount required by the state constitution.
“The feeling was our schools have been cut a lot and have been really hard-pressed to meet the needs of our communities,” Sirota said. “And so I think that was really in the back of our minds when we were trying to make sure that we were protecting K-12 funding at least for one more year.”
Lawmakers have established an education budget of nearly $10.2 billion for next year, including $5.6 billion coming from the state, and they are increasing the amount they spend per student by $209 to about $8,900.
But not all districts will see a spike in funding, due to enrollment declines and the state’s plan to continue shifting away from giving districts money based on an average of their student counts, according to Tracie Rainey, executive director of the nonprofit Colorado School Finance Project.
The state is chugging forward with its rollback of an averaging provision that has shielded districts struggling with declining enrollment from significant funding cuts. The state has long doled out funding to districts based on an average of their enrollment over five years. Last year, they scaled down to four years of averaging and this next year will shift to three years.
“That does not mean that school districts all received additional dollars,” Rainey said.
Legislators built in a mechanism that will buoy a small number of districts from a drop in funding.
Funding will flow to most districts through the new formula for next year. For some districts that would lose money through the new formula, however, lawmakers have decided on what they call a “hold harmless” maneuver. Instead of getting money through the new formula, they will receive the same amount of funding they received during the 2024-25 school year when the state’s previous funding formula was still in place.
“In a desire to not hurt any district with the new formula, it was very important to me and other legislators that we create a hold harmless (agreement) that was fair to districts and that would ensure they were at what they would have been if not better,” said House Speaker Julie McCluskie, a Dillon Democrat and one of the key designers of the new formula.
What happened to that conversation around specific ownership tax?
Lawmakers also cushioned school districts from funding cuts by rejecting a major change to how some local taxes are counted toward school funding.
Gov. Jared Polis earlier this year argued that Colorado should count the dollars districts receive from local vehicle registration taxes toward the school funding formula. That would allow the state to reduce its own payments to school districts in order to save money in the throes of repeated state budget deficits. Many school districts bristled at the idea as it threatened to pull tens of millions of dollars from some districts in one school year.
Much of the taxes the state collects from vehicle registrations are earmarked for state and local highways construction. But a lot of it is distributed to schools and local governments, instead.
The vehicle registration tax, called the specific ownership tax, works like this: The annual tax stems from vehicle registrations, including from new vehicle sales and driver’s license renewals. Counties disburse the tax revenue to local governments, including school districts, which receive an amount proportionate to the amount of property tax they collect.
The state contributes nearly 55% of the $10.2 billion it takes to fund the school finance formula, with local taxes making up the rest. When local property tax collections rise, the state doesn’t have to contribute as much. But some local taxes — like when local voters approve a bond or mill levy override — don’t count toward the local share. That allows school districts to grow their budgets without losing money from the state. And when school property taxes increase, their slice of the vehicle registration tax does, too.
During the 2025-26 school year, state budget documents showed that school districts received about $451.8 million in vehicle registration taxes. Roughly $190.5 million of that didn’t count toward the districts’ local share but instead was spent at their discretion.
Polis proposed throwing all the extra tax dollars at the school funding formula and then redistributing the funds among all districts. The result: It would boost how much school funding comes from local communities, meaning the state could reduce the amount of money it devotes to education. It would also essentially translate into a funding cut for districts that rely on that additional tax revenue.
The governor had proposed first taking half the extra money to put into the state’s school funding formula in the 2027-28 school year before collecting all the additional tax dollars to roll into the formula starting in the 2028-29 school year. That way, districts would not lose that funding so abruptly.
Lawmakers ultimately rejected that recommendation, opting to make no changes to the way the state counts specific ownership tax toward school funding.
“That’s something that would have to be well thought out and planned out ahead so that (districts) could prepare,” Kolker said. “We can’t just pull out the rug from under them.”
He added that lawmakers could return to a discussion about changing the way the extra tax is counted into school finance if the state sees a boost in revenue and could pump more funding into the state share to spare districts a funding loss.
“That’s going to take a lot more discussion and not just be a middle-of-session choice,” Kolker said.
Lawmakers’ decision to hold off on any changes came as a relief to districts like Denver Public Schools, which adds about $26 million to its general fund from specific ownership tax every year, according to Carpenter.
“Had they not made that decision,” Carpenter said, “they would have had to explain to constituents why they were cutting K-12 education, even though education funding is very popular with Coloradans.”
Some lawmakers would have preferred a compromise, including Sirota, who described changing the way the tax factors into school funding as not a cut but “a rebalancing of funds.”
“I think that certain folks decided that was not politically a feasible path for the current year,” Sirota said. “I think there could have been at least some half measures we could have taken, but there wasn’t the political will to do so.”
How should the state factor the cost of living into the way it funds schools?
Before lawmakers approved their funding plan for the 2026-27 school year, a last-minute unexpected wrinkle sent some district leaders into a panic about possible funding cuts.
With days left in the session, some districts learned they could potentially get less money from the state than what initial projections showed — all because of one element of the funding formula that gives districts money based on the cost of living.
The formula’s cost of living factor does exactly what it sounds like, accounting for differences in how much it costs to live in different parts of Colorado. The state reevaluates the cost of living every two years with a study that assesses costs of necessities like housing, goods and services, and transportation in every district, according to documents from Legislative Council Staff.
The drop in funding was based on a change in how the state allocates funding through the cost of living factor. In the simplest terms, under the old school funding formula, districts would never experience a funding dip due to cost of living — they would only ever stay level from what they received in prior years or see their funding go up. Under the new formula, they could see funding decreases based on the cost of living factor.
For some districts, the loss would have added up to more than a million dollars.
The change in funding projections was made all the more complicated by the fact that many districts had set their budgets for the next school year, or were close to buttoning them up, by the time they learned about the new figures.
The legislature intervened with a late amendment to preserve funding, delaying the new approach to the cost of living factor by a year.
The last-minute amendment also bumped up the timeline for releasing funding projections, first directing legislative council staff to wrap up the cost of living study in the years it’s required by Jan. 1. Additionally, it calls for the Colorado Department of Education, which is responsible for calculating funding projections for the cost of living factor, to update districts with figures by mid-February.
“This year one of the issues is it all happened at the eleventh hour,” Gibson said. “So I think getting that information earlier in the game will be really critical.”
Frustrations mounted against the Colorado Department of Education for releasing updated school funding projections just days before the end of the session. Districts and education advocates questioned why fresh projections weren’t made available shortly after the March economic forecast.
Colorado Education Commissioner Susana Córdova in an interview with The Colorado Sun earlier this month said she is optimistic that the department will push out projections more smoothly in the future. The process of crunching numbers for funding projections is “very manual” and “very labor intensive” and was made more complicated this year by a process that unfolded differently from past years, she said.
“It’s an honest mistake in that none of our normal process was in place for this year,” Córdova said. “School finance was introduced before the cost of living. Cost of living changed. We always wait until we have a more final version to do it. That typically is connected to more current data. This year that did not provide districts with the most timely, accurate information.”
An automated system slated to be in place for the 2027-28 school year will help the department more easily crank out reliable figures, she noted.
Gibson said lawmakers, district leaders and education organizations will have to take a closer look at the cost of living factor over the summer to gauge its impact on districts.
Sirota said it will be important to analyze how the cost of living factor works and impacts individual districts and then decide whether the state should adjust that part of the formula.
Kolker added it is just as critical to give districts a clear picture of school funding figures much sooner in the year.
“Right now, we know what it is,” Kolker said, “and right now it’s about planning and giving them time to plan. And I think that’s what caught us this year. We didn’t give them enough time. Next year they’ll have the time.”
Colorado voters will decide whether to give schools more money
The Colorado House and Senate in one of the last days of the session passed a resolution with broad bipartisan support for a commitment to develop a long-term plan to adequately fund Colorado public schools.
While the resolution does not bind the legislature to any legal actions in pursuit of more money for schools, public education advocates hailed the statement as a significant win after repeated calls to fund schools according to the true cost of educating students.
“There is moral power in a resolution,” said Lisa Weil, executive director of Great Education Colorado. “Having that statement, that official, formal statement by a bipartisan overwhelming majority of both houses says that we all share a goal. And that has never been made so concrete and formal before.”
Democrats behind the resolution, who dub education “the bedrock of our democracy” and “the key to Colorado’s economic prosperity and future,” pledge to analyze the findings of two studies the legislature commissioned to better understand the dollar amount needed to fully fund education. The resolution, in which lawmakers “reaffirm the critical importance of public education and the fair and full funding” of schools, promises to select one of the studies to implement and then hammer out a specific plan to phase in its recommendations.
Results of the studies, released in January 2025, indicated that Colorado would need an additional $3.5 billion to $4.1 billion on schools to fund them to the level needed to cover all costs of educating kids.
Are those figures within reach? Possibly.
Educators are hanging their hopes on one statewide measure lawmakers referred to the November ballot, with another measure a group of advocacy and education organizations are currently working to add to the ballot.
The measure backed by lawmakers, through Senate Bill 135, would ask voters to divert TABOR refunds mostly to K-12 education. If given a stamp of approval by voters, the measure would allow Colorado’s annual TABOR cap on government growth and spending to jump by an amount equal to the most the state has spent on K-12 funding in a single year. That is currently about $4.6 billion but will likely increase in the future.
The additional dollars would first cover a funding increase for K-12 by 2% over the previous year’s spending, which translates to about $107.4 million in the first year. Remaining dollars would be divided among K-12 education and other programs targeting kids, including early childhood programs such as preschool.
The other ballot measure in the works, propelled by a collection of groups that call themselves the “Protect Colorado’s Future” coalition, would establish a graduated income tax structure. That system would increase income taxes on high earners in the state and would reduce income taxes for households and residents who take home less. The measure is projected to generate more than $2 billion that would be split among K-12 education, childcare and healthcare.
Kolker, a supporter of both initiatives, said the passing of at least one of the measures would be the surest way to fully implement the state’s new funding formula. Otherwise, in light of another hard budget year headed for Colorado and economic uncertainty, he said the legislature might have to freeze the new formula in place next year instead of continuing to pump it with more money.
Without the success of at least one measure, he said, “I don’t see where we’re going to get the revenue because we can only cut so much in other places.”
McCluskie said she hopes the measures help drive more funding to students with significant learning needs and students in rural districts — two of the top goals of the new formula — or at very least ignite a discussion about how to boost revenue for K-12 education.
“Seeing the new formula fully implemented and the districts receiving significantly more new money really matters, and I hope one or both of these measures help us get there,” McCluskie said. “And if for some reason they do not, then I hope that there will be a very comprehensive statewide broad conversation about what are we going to do with revenue. If we value these services, we’ve got to do something to ensure that we fully fund what people are hoping for and expecting.”
Other lawmakers like Kirkmeyer, the Brighton Republican, aren’t convinced either measure is the answer to properly fund K-12 education. Kirkmeyer said she believes Colorado has the funding it needs, urging state leaders to settle on their priorities and cut down on spending.
“We need to look at how we are managing our dollars,” Kirkmeyer said. “It’s no different than anybody else sitting around the table at their own home looking at their budget and deciding, gosh, what thing should I fund first?”
