School Finance 101

There are many thoughts and ideas on how schools receive funding, manage their expenses, pay their staff and we thought some simple facts that explain the details, dispel the rumors and validate the issues would be important for you to have available.

First, some facts about how Colorado ranks against national averages in economic viability from US News and World Reports:  FULL REPORTCO Economy

As you can see, we do well when it comes to economy.  Better than any state in the country.

How does that translate to financial support for our education system?  Full ReportCO Ranks-Education

Not so bright as the economy, right?  Lets dissect some of these numbers a bit.

Colorado ranks 49th in number of novice teachers in the classroom.  Great, we are giving young teachers an opportunity, right?  Well, note another line below where we are 41st in pupil-teacher ratio.  What does that mean?  We are asking the most novice teachers to handle larger classroom sizes, and expecting a good result.  Does that make sense?  Well, lets look at the results listed here.

Colorado ranks 44th in math gap.  What does that mean?  It means only 6 states in the country are worse at math coming out of high school than are we.  Not a proud moment for us is it?

How about reading? Not much better.  39th in reading gap.  In a nutshell, our kids are being taught in large classrooms, with novice teachers and failing to even compete in core subject areas of math and reading.

What about our funding ranks?  If we are doing so good in the economy, our funding should be in line, right?

Well, sorry again, we rank 41st in per student funding.  FULL REPORTState funding for schools

But wait, there is more.  Per student how do we rank?  Note we fund at a per student rate of $2,715 below the national average.  In 1980, we funded above the national average by over $200.00 per student.

Colorado is gaining between 8,000 and 10,000 new students to the system each year.

Well, that’s great, but what about RE-1.  We’re a big, well funded district, right?  FULL REPORT (Scroll down a bit)

Neighbor States

Neighboring states have us beat for funding.  We must be better than the neighboring school districts right?  FULL REPORTNeighbor Districts

Ouch.  That hurts.  Well, we just need to control the administrative costs and our ultra expensive superintendent, right?

Lets see how we compare.  FULL REPORT

Administrative Costs compare BR and FM

Well, that seems like we’re being good fiscally with our money, but what about the superintendent?

Lets look at a few districts of similar size to us:  FULL REPORT


Ok, so we are not being well funded, are showing bad results, are managing our money well and paying fair wages to our administration.  How did we get here?

Well, there are 3 key components that have us in the position we are in.


Gallagher passed in 1982.  Its purpose was to maintain a constant ratio between the property tax revenue that comes from residential property and from business property.  The effect of Gallagher was to reduce the assessment rate whenever statewide total residential property values increased faster than business property values (Great Education Colorado).  The result:  the assessment rate for residential property has declined by more than two-thirds over the last 30 years due to population growth and increases in residential real estate values, which has resulted in a decline in the tax revenue that provides the majority of school funding.


TABOR (Taxpayer Bill of Rights) was passed in 1982.  It prohibited any tax increase without a vote of the people.  It also places strict limits on how much revenue the state can keep and spend.  TABOR has the strictest spending limits in the nation.  Any revenue collected by the state that exceeds TABOR’s revenue limits, must be refunded to taxpayers.  Referendum C passed in 2005 and did suspend that portion of TABOR for five years, which made it possible for some small investment back into public education.  Had it not passed the state would have been forced to make even deeper cuts along with refunding hundreds of millions to taxpayers.  However, that was simply a band-aid fix, as it did not address the underlying constitutional budget issues that TABOR and Gallagher created.  TABOR’s requirements remain in place.

What is the impact of these two amendments?

Schools receive funding from both the local (property taxes) and state revenues.  Currently RE-1 receives 37% of its funding from local funds and 63% from the state.  The Gallagher Amendment limits local revenue by cutting the residential assessment rate by two-thirds since 1982.  Between the years of 1982 and 1992 the district could make up that lower assessment rate by increasing the mill rate.  The state also had the flexibility to increase state spending to combat the losses in the local property tax revenue.  However, TABOR’s passage in 1992 made it increasingly more difficult to fund    education.  TABOR’s revenue limits automatically cut mill rates and limited the states ability to prop up school funding with state dollars (  So, per pupil funding could not even keep up with the CPI (Consumer Price Index) of the 1990’s—even in a booming economy.  Gallagher and TABOR have shifted the burden of school funding from local property taxes to the State General Fund.  The states General Fund is now responsible for 60% of school funding; whereas, it used to be less than 40%(

Amendment 23


Amendment 23 was a constitutional change passed in 2000 to reverse a decade of budget cuts experienced by Colorado school districts throughout the 1990s. During that decade, Colorado’s education spending did not keep pace with the inflation rate. Per-pupil funding for education was well below the national average. Amendment 23 requires K-12 funding to increase by inflation plus 1% from 2001-2011 and by inflation after that. Notably, even with Amendment 23, by 2007-08, per-pupil funding was still $1,400 below the national average (consider how this affects a school of 300 or 700 students). If Amendment 23 had been honored through 2011, we would finally be spending as much per child in real dollars as we did in 1989.

Unfortunately, because of the economic downturn and Colorado’s resulting budget crisis, Amendment 23 was not fully implemented through 2011. Seeking ways to cope with falling revenues, the legislature reinterpreted Amendment 23 in a way that “allowed” them to cut education funding for three years through a mechanism called the negative factor (see more below). The funding level approved by the legislature for the 2015-16 school year is fully $855 million ($1,000 per pupil) below what is required under the traditional and, we believe, correct reading of Amendment 23. In the years since the negative factor was implemented, schools have been denied over $5.1 billion in funding.

How has this “Negative Factor” impacted RE-1 SchoolsNegative Factor RE1


Ok, but since we have legalized Marijuana, that was supposed to help our schools.  Lets just use that money and we solve our problems, right?



The Truth about Marijuana Money.
The first $40 million generated each fiscal year from the marijuana excise tax is credited to the state’s BEST program to renovate existing school buildings or construct new buildings.
BEST grants are competitive, awarded annually and in most cases must be supplemented with local district matching funds.

In 2014, the state legislature created the Marijuana Tax Cash Fund (MTCF) to collect sales tax revenue from retail and medical marijuana.
Fifteen percent of the revenue from the 10 percent tax on marijuana retail sales is allocated to local governments and apportioned according to the percentage of marijuana sales within city and county boundaries. The remaining 85 percent goes to the MTCF.

Revenue from MTCF must be spent the following year on health care, to monitor the health effects of marijuana, health education, substance abuse prevention and treatment programs and law enforcement.

While RE-1 has received some money from Marijuana,

They are not available to increase teacher salaries, fund programming or curriculum.

We are losing teachers at an alarming rate, and cannot even fill some of the open positions.

metal_chair_front_isometric_400_clr_17528RE1 Stats-Turnover









As the state continues to make cuts from their proportion of school finance, our district becomes more crippled and is unable to compensate for the disparity.  With continued cuts to state funding, the only way to compensate is through the support of our community, by raising the local property taxes with a mill levy override.  Our kids deserve an equitable education.



But my property taxes keep going up.  Doesn’t this help fund the schools?

No.  Gallagher prevents those funds from going to the schools, and in fact, when you see property taxes drop next year, that will hurt the schools quite a bit.  Here (Click HERE) is an article that details that odd situation.

Only a Mill Levy Override directly helps with funding of the schools.

What is a Mill Levy Override?

A voter approved Mill Levy Override adds mills to a property tax bill.  Mills are the factor applied to assessed property value (not actual or market value), and together they determine total property tax cost.  Depending on where you live, property tax collection may be allocated to your county, city/town, your water district and/or your school district, etc.  A school district MLO provides additional operating monies exclusively for the school district.

How will this affect you, us in our efforts to help our kids?

Mill Levy Override Tax Increase


Mill Levy: 10.0

Residential Tax Impact (7.96% Taxable Assessment Rate)


Commercial Tax Impact (29.0% Taxable Assessment Rate)


Agricultural Tax Impact (29.0% Taxable Assessment Rate)



We know.  None of us want to give more money.  We all work hard for what we get and deserve a chance to use it how we need.  However, when you evaluate the crisis our local school district is in, and the poor hand dealt to them by the state, we have no alternative but to fund the schools.

This is not a simple matter, but our regions economy and stability depend on strong, successful schools.  New businesses looking to open in the RE-figure_with_empty_pockets_205871 service area ask about our schools all the time and our kids deserve a better hand than they are currently being provided.

We as a committee are extending efforts well beyond the vote.  We will be at school board meetings, district accountability meetings and asking for detailed insights into how all of the funds are used, questioning the costs and ensuring as best we can that your hard earned money is being managed and used wisely.

If there were alternatives, we would pursue them, but we are simply out of options.  Now the choice is yours.

Support our kids and the economic future of the region, or turn your backs and ignore the facts.

We need your vote, we need your help and we appreciate your time.