Colorado K-12 School Funding

and Cost-Saving Reforms

Independence Institute
Candidates Briefing Presentation
August 3, 2010
Introduction
 Background
 School Finance in Colorado
 Just the Facts
 Reforms
 Amendment 23
 Tuition Tax Credits
 Educator Compensation
 Online Innovation
 Labor Reforms
School Finance in Colorado
 School Finance Act (1994)
 Core state and local K-12 funding
 Total program funding varies by:
 District size (J-Curve)
 Cost-of-living (Aspen vs. Kiowa)
 Personnel costs (Adds Historical Info)
 At-risk student population (Higher)
 Online student population (Lower)
 PPR: $6,358 (Branson) to $14,749 (Silverton)
 $5.441 Billion (2010-11)
School Finance in Colorado
 School Finance Act (Cont.)
 State vs. Local Share
 State fills in formula amounts
 State share: 56.5% (2001) – 63.8% (2009)
 Districts: 1.1% (W. Grnd) - 96.7% (Edison)
 Formula protects declining enrollment
districts: up to 5-yr avg. of actual #
 One earmark for Total Program
 2000-01 to 2009-10: SFA per-pupil
spending grew 15 percent in real dollars
School Finance in Colorado
 Other Major Funding Sources
 Mill Levy Overrides (Local): $591 Million
 Categorical Funds (State): $230 Million
 Special Ed; Gifted / Talented; L.E.P.; Rural
Transportation; Small Attendance Ctrs
 BEST Capital Construction: $78 Million
 CDE Admin (State/Federal): $48 Million
 School for Deaf & Libraries: $20 Million
 Miscellaneous State Program Funding
 Other Federal Funds / Grant Funds
 School Fees / Investment Earnings, etc.
Just the Facts
 Total Spending Per Pupil
 In two decades, CO total per-pupil
spending has grown 31% in real dollars
(compare: 45% growth in national avg.)
 Colorado ranks 32nd (2007-08): $11,133
(National Avg. = $12,121)
 CO regionally outspends:
 Utah, Idaho, Oklahoma, Arizona, Nevada,
Texas, New Mexico, Montana, Kansas
 Only Nebraska and Wyoming spend more
 Per-Pupil Spending, 1988-89 to 2007-08,
Colorado vs. National Avg (2008 Dollars)

$13,000
$12,000
$11,000
$10,000 National Avg
$9,000 Colorado
$8,000
$7,000
$6,000
Just the Facts
 Current spending per pupil
 Excludes spending on capital
construction and debt financing
 Depends whom you ask (2007-08):
 US Department of Educ.: $9,152 (35 th)
 US Census Bureau: $9,079 (36th)
 National Educ. Association: $9,335 (29 th)
 In CO and nationally, per-pupil spending
doubled between 1970 and 2000
Just the Facts
 49th in Education Funding??
 Amount of dollars spent as share of
personal income (Census, NEA)
 Assumes the more earnings in a state,
more must be spent on K-12 Ed
 CO: About 3.5 percent
 Nation: About 4 percent
 Three-fourths of studies show no
correlation between spending & results
 Applies to per pupil & per capita income
Moving On…
 Background
 School Finance in Colorado
 Just the Facts
 Reforms
 Amendment 23
 Tuition Tax Credits
 Educator Compensation
 Online Innovation
 Labor Reforms
Amendment 23 (2000)
 Approved by voters (52 percent)
 Created State Education Fund: offsets
TABOR refunds or other spending
 February: SEF = $188 million & falling
 General Fund “maintenance of effort”
 Mandated spending increases
 Inflation +1% through 2010-11
 Inflation thereafter
Ending Amendment 23
 Repeal of Amendment 23 would
restore flexibility, fiscal responsibility
 Spending could be controlled without
harming total classroom support:
 Classroom: CO 57.9% vs. US 60.8%
 “Other support services”: CO 6.8% (3rd
highest dollars per pupil) vs. US 3.2%
 Business support, planning, research &
development, data
 More than $100 million savings
Tuition Tax Credits
 Offsetting tax benefits for non-public
student education expenses
 States with tuition tax credits:
 Arizona (3), Florida, Georgia, Indiana
(starts 2010-11), Iowa, Louisiana
(deduction), Pennsylvania, Rhode Island
 More than 100,000 students served
 States w/other education tax credits:
 Illinois, Minnesota
Tuition Tax Credits
 Program Essentials (cost-saving
analytical experiment)
 Cover non-public school tuition
 Individual and corporate giving eligible
(families or scholarship organizations)
 Universal, not means-tested
 Phased-in: Public school “switchers” only
eligible in first three years
Tuition Tax Credits
 Variable -- Value of tax credit benefit
as share of state per-pupil spending
(Predicted student migration; 3-yr /
10-yr state impact, in millions):
 25% (44,961; $26.0 / $296.3)
 50% (55,205; $21.3 / $176.0)
 75% (71,131; $13.7 / -$15.5)
 100% (99,339; $0.0 / -$360.7)
 Figures do not include savings at
local school district level
Tuition Tax Credits
SAVINGS: 10 YEARS
State Savings:
Tax Credit Migration 3 Yrs State District Total
10% 40,406 $28,036,079 $348,661,331 $510,509,839 $859,171,170
20% 43,337 $26,735,511 $315,048,938 $547,443,714 $862,492,652
25% 44,961 $26,007,160 $296,288,166 $567,894,481 $864,182,647
33% 47,816 $24,714,232 $263,080,632 $603,840,764 $866,921,396
40% 50,615 $23,433,102 $230,280,716 $639,064,487 $869,345,203
50% 55,205 $21,306,738 $176,030,887 $696,798,073 $872,828,960
60% 60,668 $18,741,195 $110,828,620 $765,462,672 $876,291,292
67% 65,153 $16,611,402 $56,864,427 $821,795,158 $878,659,585
75% 71,131 $13,746,657 -$15,543,274 $896,791,069 $881,247,795
80% 75,436 $11,667,871 -$67,987,703 $950,748,405 $882,760,702
90% 85,767 $6,640,358 -$194,496,835 $1,079,992,057 $885,495,222
100% 99,339 $0 -$360,799,952 $1,248,914,424 $888,114,472
Educator Compensation
 “Master’s Bumps” – automatic pay
increases for teacher master degrees
 One of most consistent findings in
education research is ZERO impact
 Colorado spends 1.8% ($138 million)
of all current education expenditures
 End automatic pay increases vs.
introduce performance pay?
Online Innovation
 Colorado is one of national leaders in
K-12 online education
 Comprehensive look at ways innovation
and entrepreneurship can supplant
bureaucratic regulation to serve more
 Online students funded at 91.7% of
student total program average
 Small cost savings could be found by
serving more students in online / hybrid
programs
Labor Reforms
 Union Release Time
 Audit / demand accountability
 End taxpayer subsidies
 Open Bargaining Negotiations
 Public oversight of decisions for
allocating public resources
 Paycheck Protection / Agency Fees
 Collecting dues for private groups /
respecting educators’ individual rights
Labor Reforms
 School Board Elections
 Aligned with general elections = more
public participation vs. special interests
 Strike Sanctions
 State employees excepted, all public
workers have virtually absolute right
 Union Transparency
 Guarantee public financial disclosures,
member access to information
 Education Policy Center
 Education.i2i.org (NEW!!!)
 www.SchoolChoiceforKids.org
 www.EdIsWatching.org
 www.IndependentTeachers.org
 Education Policy Center
 Pam Benigno, Director (pam@i2i.org)
 Ben DeGrow, Policy Analyst (ben@i2i.org)
 Marya DeGrow, Research Associate
 Raaki Garcia-Ulam, Website Outreach Coordinator
 Office Phone: 303-279-6536