Download the entire School Finance Act explainer PDF.
Colorado legislators, leaders, and educators worked together across the aisle in 2024 to make two landmark improvements to how Colorado funds education and supports Colorado kids.
First, the state eliminated the Budget Stabilization Factor, a recession-era budgeting mechanism that resulted in the state directing $10 billion away from public education. Second, the state updated the school funding formula for the first time in 30 years. When fully implemented, the new funding formula promises to deliver an additional $500 million to public schools annually. School districts serving students living in poverty, students learning English, and students with special learning needs should see the largest increases.
Just a few months later, in the August 2024 special session, the state reset the property tax rate, causing revenue projections to fall and forcing the state to cut $1.2 billion dollars from the state budget in the 2025 session.
Since then, the governor, legislators, and educators have been working to find a way to fund K-12 education increases within a statewide budget shortfall. In his 2025 budget draft, the Governor suggested that the state eliminate enrollment averaging (an accounting practice that helps districts contend with declining enrollment) and use the savings ($190 million) to pay for the funding increases needed in K-12.
Hearing school district concerns that eliminating enrollment averaging would result in sudden and variable changes to districts’ budgets and ability to staff schools appropriately, Speaker McCluskie negotiated a compromise. The compromise proposal in HB25-1320, described below, would begin implementing the new formula, deliver increased funding to Colorado school districts in July 2025, and ensure predictability and sustainability in the state’s work to increase funding for public schools.
Under this proposal, the total K-12 appropriation for FY 2025-26 would be $10,035,615,918, or a $250+ million increase over FY 2024-25. 21 school districts will be held harmless (no cuts), and the remaining 157 will see an average funding increase of 2.9%. Per-pupil revenue will increase by an average of $380.
The new school funding formula is our best and only chance at sustainably and predictably increasing investment in Colorado’s public education system.