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I_SFinance_2019A 06/25/2019 09:05:23 AM Committee Summary

PUBLIC
STAFF SUMMARY OF MEETING
INTERIM COMMITTEE  LEGISLATIVE INTERIM COMMITTEE ON SCHOOL FINANCE
Date 06/25/2019
Attendance
Baisley X
Bird X
Bridges X
Geitner X
Lundeen X
Sonnenberg *
Todd X
Wilson X
Zenzinger X
X = Present, E = Excused, A = Absent, * = Present after roll call
Time 09:05:23 AM to 02:29:32 PM
Place HCR 0112
This Meeting was called to order by Representative McCluskie
This Report was prepared by Meghan MacKillop
Hearing Items Action Taken
Call to order and opening remarks Committee Discussion Only
Election of Vice Chair Elect Senator Lundeen As Vice Chair
Colorado's School Finance System: The School Funding Formula Committee Discussion Only
Colorado's School Finance System: State and Local Shares Committee Discussion Only
Guiding Principles and Values for COlorado's School Finance System, EdBuild Move to Contract with EdBuild
Committee Agendas, Logistics, and Next Steps Committee Discussion Only

Call to order and opening remarks - Committee Discussion Only


09:08:05 AM  

Representative McCluskie made opening comments and reviewed the committee's agenda for the day.

09:11:26 AM  

Committee members also made opening comments, and discussed the charge of the committee as outlined in the committee charge memo (Attachment A).

09:15:54 AM  
Committee discussion continued.



Election of Vice Chair - Elect Senator Lundeen As Vice Chair


09:20:39 AM  

Senator Todd nominated Senator Lundeen as the Vice Chair of the committee. Senator Bridges seconded the nomination. Committee discussion ensued.



09:23:33 AM
Motion To elect Senator Lundeen as the Vice Chair of the Legislative Interim Committee on School Finance.
Moved Todd
Seconded Bridges
Baisley Yes
Bird Yes
Bridges Yes
Geitner Yes
Lundeen Yes
Sonnenberg Yes
Todd Yes
Wilson Yes
Zenzinger Yes
McCluskie
YES: 10   NO: 0   EXC: 0   ABS:  0   FINAL ACTION:  PASS



Colorado's School Finance System: The School Funding Formula - Committee Discussion Only


09:24:51 AM  

Julie Pelegrin and Brita Darling, Office of Legislative Legal Services, introduced themselves to the committee and began their presentation regarding the school funding formula. The presentation was sent to members of the committee and can be accessed here: http://leg.colorado.gov/sites/default/files/images/committees/2017/final_-_2019_sf_committee_formula_presentation.pdf.

09:27:34 AM  

Ms. Darling reviewed base per pupil finding.  The school finance formula begins with a base per pupil (BPP) funding amount statewide.  This figure is established in statute through the annual school finance bill.  The school finance formula increases BPP funding for districts that have a higher cost of living or a smaller district size, as measured by pupil enrollment.  Ms. Darling reviewed the formula for calculating funding based on school district characteristics, including the statewide base funding, personnel costs, cost of living, nonpersonnel costs, and the size of the district.

09:34:12 AM  

Ms. Darling explained how the funding formula funds districts based on student characteristics, such as how many at-risk students are enrolled in the district and multidistrict online or extended high school students. At-risk students include students that are eligible for free or reduced lunch and certain English language learners. Ms. Darling discussed how the state counts students in each district. This is called the October count, which is the actual number for the current year, or an average of the current year and the last one, two, three, or four years, whichever is highest. Ms. Darling explained how the budget stabilization factor impacts a district's share of total program funding. The budget stabilization factor is applied to total program funding and is a percentage reduction in total program funding to reflect the actual amount of funding available for the state share of total program funding.

09:41:12 AM  

Ms. Darling explained that in FY 2019-20, the statewide funded pupil count was 894,569 and the total program funding after the budget stabilization factor was $7.58 billion.

09:41:51 AM  

Leanne Emm, the former head of school finance for the Colorado Department of Education (CDE), introduced herself to the committee, and stated that she was available for questions from the committee. Ms. Emm, Ms. Pelegrin, and Ms. Darling answered questions from the committee regarding the school funding formula, the budget stabilization factor, and how certain factors impact total program funding.

09:58:52 AM  

The panel continued to answer questions from the committee regarding the funding formula, funding for English language learners, the impact on a district's funding as it relates to BOCES, and how the student count impacts total program state share payments.  The panel explained the funding of phantom students, which is the count of students through averaging the current year count. This occurs in districts with declining enrollment.

10:36:34 AM  

The committee recessed.



Colorado's School Finance System: State and Local Shares - Committee Discussion Only


10:47:17 AM  

The committee came back to order.

10:47:52 AM  
Craig Harper, Joint Budget Committee Staff, introduced himself
to the committee and began his presentation regarding state and local shares
in the school finance system (Attachment B). Mr. Harper explained the total
sources of revenue, which includes school district property and specific
ownership tax, General Fund support, and other state money contributions.
The statutory formula produces a total program funding for each of Colorado's
178 districts. Statewide total program funding is the sum of those amounts.
The formula does not consider revenue sources. The local share, including
property taxes generated by each district's total program mill levy and
specific ownership taxes paid with vehicle registrations, provides the
foundation for total program funding. Property taxes provide about 93 percent
of the local share. The state share fills the gap between the local revenues
available for school finance and the total program amount for each district.
The budget stabilization factor represents the shortfall in available funding.
11:00:18 AM  

Mr. Harper discussed sources of state revenue for school finance. State funding for school finance comes from the General Fund, State Education Fund, and State Public School Fund. Mr. Harper discussed how the state share can fluctuate between districts, depending on the school district's property tax revenues. He also discussed the changes over time of state and local shares. Local shares have generally decreased over time, as the state share has increased in an attempt to offset those decreases. Three constitutional factors have driven this change -- the passage of the Gallagher Amendment in 1982; the passage of the Taxpayer Bill of Rights (TABOR) in 1992, and the passage of Amendment 23 in 2000. Both the Gallagher Amendment and TABOR have put downward pressure on local property tax revenue, and the passage of Amendment 23 has driven increases in total program funding based on inflation and enrollment growth.

11:16:05 AM  

Total program funding only includes the money distributed according to the formula and does not include other sources of funding.  Mr. Harper discussed these other revenues, including mill levy overrides, categorical funding, federal revenues, other local revenues, and other state funds.

11:24:54 AM  

Mr. Harper answered questions from the committee regarding any impacts of new legislation on oil and gas tax revenue, and mill levy overrides.  Mr. Harper discussed the history of mill levy revenue in the state and how certain constitutional provisions have impacted mill levy revenue in school districts.  He discussed how a uniform mill levy would impact the school finance system.

12:10:28 PM  

The committee recessed.



Guiding Principles and Values for COlorado's School Finance System, EdBuild - Move to Contract with EdBuild


12:32:07 PM  

The committee came back to order, and Rebecca Sibilia, founder and CEO of EdBuild, introduced herself to the committee and provided the committee with background regarding EdBuild. The presentation can be accessed here: http://leg.colorado.gov/sites/default/files/images/committees/2017/briefing_materials_on_ed_finance_0.pdf.

Ms. Sibilia mentioned the different states EdBuild has partnered with and discussed the history of EdBuild's work with the committee. Ms. Sibilia answered questions from the committee, and committee discussion ensued.

01:08:30 PM  

Ms. Sibilia continued with the EdBuild presentation and discussed the different services EdBuild can offer. Matt Richmond, Chief Programs Officer, introduced himself and discussed funding of special education students. Ms. Sibilia discussed nationwide funding for special education and how Colorado compares to other states. Committee discussion ensued.

01:33:56 PM  

The committee continued to discuss special education funding. Ms. Sibilia and Mr. Richmond reviewed the EdBuild tool with the committee, using at-risk funding mechanisims as an example.

 

 

01:56:48 PM  

The committee recessed.

02:04:51 PM  

The committee came back to order.

02:05:07 PM  

The committee discussed the presentation from EdBuild and whether the committee would like to work with EdBuild to provide consultative services to the committee.



02:17:04 PM
Motion Motion that the interim committee on school finance contract with EdBuild to provide consultative services, as will be defined in the contract, to the committee for the 2019-20 interim.
Moved Lundeen
Seconded Sonnenberg
Baisley Yes
Bird Yes
Bridges Yes
Geitner Yes
Sonnenberg Yes
Todd Excused
Wilson Yes
Zenzinger Yes
Lundeen Yes
McCluskie
YES: 9   NO: 0   EXC: 1   ABS:  0   FINAL ACTION:  PASS



Committee Agendas, Logistics, and Next Steps - Committee Discussion Only


02:17:34 PM  

The committee discussed future meeting dates and plans for the upcoming meetings.


02:29:32 PM   The committee adjourned.






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