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DougCo's Economic Boom Is State of Colorado's Gain Where School Finance is Concerned

The state funding model, the negative factor and the impact to DCSD.
Observing the overwhelming population growth in Douglas County, it's easy to conclude that many new residents are likely not native to Colorado or to Douglas County. Other Colorado natives may not have paid much attention to school finance issues and are beginning to see the effects of the lack of funding provided to the school district by the State of Colorado.
 
It would be simple to assume that, because of the vast economic growth and the high property values in Douglas County, the Douglas County School District would be dripping with funds – but that is not the case.  In fact, DCSD is the lowest funded school district on the Front Range.
 
See, all those great businesses that have moved into our county, creating the economic boom and vast development is great news for the State of Colorado. That’s where the revenue goes – to the state – not to the district. Our local property taxes go to the district, and when Douglas County property values increase or new construction occurs, the state provides even less to our school district in terms of funding because locally, we are contributing more to the set funding amount. It doesn’t mean we generate more funding
 
Essentially, when local property taxes go up, state funding goes down. Currently, Douglas County School District is funded about 1/3 from local property taxes and 2/3 from the state.  When our local property taxes go up, our total funding doesn’t change – we just save the state money on their end.  We are simply changing the mix of funding, not overall funding. 
 
The funding model is such that Douglas County receives the lowest per pupil school funding on the Front Range. In fact, if DCSD received the average state “per pupil revenue” or PPR, we would gain an additional $14 million annually.  All of your local property taxes paid for schools stay in Douglas County.  Any state income taxes and state sales taxes you pay go to the state and they redistribute those funds as they want.  There is no guarantee that state taxes paid by Douglas County residents are returned to the benefit of Douglas County. 

But let me give you a background into how it all began and ended with the Negative Factor providing an additional burden. The Negative Factor was created when the legislature, lacking funds in the general fund due to depressed economic conditions, found a loophole to cut funds to education within Amendment 23.
 
Amendment 23 required K-12 funding to increase by inflation plus 1% from 2001-2011 and by inflation after that. 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.
 
Then, 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 six years through a mechanism called the Negative Factor. The funding level approved by the legislature for the 2015-16 school year is fully $855 million below what is required under the traditional and, we believe, correct reading of Amendment 23.
 
In effect, the legislature now decides how much it wants to spend on school finance, and then adjusts the Negative Factor to meet that funding target.  In other words, school finance is no longer based on an independent formula but based on how much funding the state WANTS to provide K-12.    
 
The cuts are made by calculating what is required under Amendment 23 and then cutting each district’s per pupil amount to get to the desired funding target.  This means that while Douglas County provides a revenue increase to the state because of our economic boom, the state will then provide a reduced share of its portion to DCSD, putting more of the burden on the district to raise the funds.  
 
When local property taxes provide more funding, the state simply reduces their contribution to our District.  
 
For DCSD, the negative factor means that this year, we will not receive over $60 million in funds, bringing the total over the last six years to $375 million we have not received from the state, though our Douglas County economy is booming.
 
Many districts however, try backfill the funds through mill levy overrides and bond increases. Douglas County voters have not approved either since 2006.
 
And with the enormous growth we are experiencing in Douglas County, the state does not provide building funds for growth, only providing the continued per pupil funds attached to the new students. As the student population continues to grow, the state will not provide any additional funding to meet the capacity needs (buildings) in the District.  DCSD is on its own to make sure we can accommodate all the new students. 
 
In addition, the development companies building the beautiful houses and buildings throughout our county only provide the land, not the funds, for a new school building.  If you have questions about the long term growth prospects of the District, I would encourage you to review the Master Capital Plan that is developed by the Long Range Planning Committee. 
 
So, that’s our school funding model for you, as parents and community members, to understand. Our Long Range Planning Committee is looking for members to serve and learn more about capital needs throughout the district.   If you have questions about the finances of the District, I would encourage you to explore the Fiscal Oversight Committee.  Now that you understand how our funding model works, you may want to check out the committees and offer your input and help.
October 13, 2015 | By SKBrown | Category: parent resources
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