• Education & School Finance (Pre & K-12)

Current Context

• Colorado has two school funding formulas:

  • Expiring Formula: Currently used and set to end after 2024-25.

  • New Formula: Adopted but not set to fully take over until 2030-31.

What the Bill Does

1. Extends the Transition Period

• Delays full implementation of the new formula to 2031-32.

• Transition period now lasts from 2025-26 through 2030-31 (previously would have ended in 2029-30).

2. Adjusts How Total Program Funding Is Calculated During Transition

• For 2025-26: Districts receive the greater of:

  • Their 2024-25 total program, or

  • Expiring formula amount plus 15% of the difference between new and old formula.

• For 2026-27: Same structure, but 30% of the difference is added.

• For 2027-30: Adds 45%, 60%, 75%, 90% of the difference each year.

• Ensures a gradual shift toward full adoption of the new formula.

3. Adds a Safety Valve If Fiscal Conditions Change

• If certain budget conditions are met (e.g., recession or fund shortfall), the transition halts and prior year’s method continues.

• Clarifies that corrections to income tax deposits do not trigger a halt to the transition.

4. Changes Funded Pupil Count Calculation

• Under expiring formula: Based on current year or average of previous 4 years.

• Under new formula:

  • 2025-26: Uses average of current year and 3 prior years.

  • 2026-27+: Switches to current year and 2 prior years.

• However, if transition halts in 2026-27, 3-year averaging continues.

• If state education fund falls below $200 million in 2027, fallback is to 1-year average only.

5. Aligns Pupil Count Across Formulas

• Beginning 2027-28, both old and new formulas must use the same funded pupil count for consistency.

6. Sets Minimum Statewide Funding Levels

• Base per-pupil amount for 2025-26 is increased by $195.42 for inflation.

• New base amount: $8,691.80.

• Total program minimum statewide funding for 2025-26: $10.036 billion.

7. Delays New At-Risk Funding Formula

• The implementation of a new "at-risk" student funding measure is postponed from 2025-26 to 2026-27.

Summary This bill restructures Colorado’s school finance transition by delaying the full adoption of a new funding formula to 2031-32, establishing a phased-in approach over six years, aligning pupil count calculations, creating fallback triggers, setting inflation-adjusted base funding, and deferring a major change to at-risk funding by one year.

Under current law, there are 2 total program formulas to finance
public schools. Absent the satisfaction of a statutorily specified condition,
the first formula is scheduled to stop determining total program after the
2024-25 budget year (expiring formula), and the second formula is
scheduled to determine total program beginning in the 2030-31 budget
year (new formula). For the 2025-26 budget year through the 2029-30
budget year (transition period), total program is scheduled to be
determined by using figures that were calculated under both the expiring
formula and the new formula.
The bill:
  • Extends the transition period by one year, so that it is from
the 2025-26 budget year through the 2030-31 budget year;
and
  • Postpones the exclusive use of the new formula to
determine total program until the 2031-32 budget year.
The bill changes how each school district's and institute charter
school's annual total program is determined during the transition period.
For the 2025-26 and 2026-27 budget years, each school district's and
institute charter school's annual total program is the greater of the school
district's or institute charter school's total program for the 2024-25 budget
year or the amount calculated under the expiring formula plus an amount
equal to 15% in 2025-26 and 30% in 2026-27 of the difference between
the amounts calculated under the new formula and the expiring formula.
For the 2027-28 budget year through the 2030-31 budget year, each
school district's and institute charter school's annual total program is the
greater of the district's or institute charter school's calculation under the
expiring formula plus 1% of that calculation, or:
  • For the 2027-28 budget year, the amount calculated under
the expiring formula plus an amount equal to 45% of the
difference between the amounts calculated under the new
formula and the expiring formula;
  • For the 2028-29 budget year, the amount calculated under
the expiring formula plus an amount equal to 60% of the
difference between the amounts calculated under the new
formula and the expiring formula;
  • For the 2029-30 budget year, the amount calculated under
the expiring formula plus an amount equal to 75% of the
difference between the amounts calculated under the new
formula and the expiring formula; and
  • For the 2030-31 budget year, the amount calculated under
the expiring formula plus an amount equal to 90% of the
difference between the amounts calculated under the new
formula and the expiring formula.
Under current law, there are specified conditions that apply to the
transition period. If the joint budget committee determines that a specified
condition occurs in a budget year during the transition period, then for the
next budget year and each budget year thereafter, the transition is
suspended, and each school district's total program is determined pursuant
to the calculation and determination required for the budget year when the
condition occurred. For one of the existing conditions, the bill specifies
that an income tax deposit to the state education fund that was made to
correct an error does not count toward determining whether the condition
has been satisfied.
A school district's funded pupil count is a figure that is used as a
part of determining a school district's total program. Under the expiring
formula, a school district's funded pupil count is calculated by
determining the greater of the school district's pupil enrollment for the
applicable budget year or the average of the school district's pupil
enrollment for the applicable budget year and the immediately preceding
4 budget years. Under current law, the new formula calculates a school
district's funded pupil count by determining the greater of the school
district's pupil enrollment for the applicable budget year or the average of
the school district's pupil enrollment for the applicable budget year and
the immediately preceding 3 budget years.
The bill changes the new formula so that:
  • For the 2025-26 budget year, a school district's funded
pupil count is calculated by determining the greater of the
school district's pupil enrollment for the applicable budget
year or the average of the school district's pupil enrollment
for the applicable budget year and the immediately
preceding 3 budget years; and
  • For the 2026-27 budget year and each budget year
thereafter, a school district's funded pupil count is
calculated by determining the greater of the school district's
pupil enrollment for the applicable budget year or the
average of the district's pupil enrollment for the applicable
budget year and the immediately preceding 2 budget years.
However:
  • If a statutorily specified condition is satisfied, and
consequently for the 2026-27 budget year, a district's total
program is not determined as scheduled under the transition
period, then for the 2026-27 budget year, and each budget
year thereafter, funded pupil count will continue to be
determined by the greater of the school district's pupil
enrollment for the applicable budget year or the average of
the school district's pupil enrollment for the applicable
budget year and the immediately preceding 3 budget years;
and
  • If, for the 2027-28 budget year, the state education fund
balance is projected to be less than $200 million, then the
general assembly is required to implement a smoothing
factor or the funded pupil count will be determined by the
greater of the school district's pupil enrollment for the
applicable budget year or the average of the school
district's pupil enrollment for the applicable budget year
and the immediately preceding budget year for the 2027-28
budget year and each budget year thereafter.
The bill changes the expiring formula so that starting in the 2027-28
budget year, the funded pupil count used in the expiring formula is the
same funded pupil count that is used in the new formula to determine a
district's total program during the transition period.
The bill determines total program for the 2025-26 budget year
using the formula changes in the bill. The bill:
  • Increases the statewide base per pupil funding for the
2025-26 budget year by $195.42 to account for inflation;
  • Sets a new statewide base per pupil funding amount for the
2025-26 budget year at $8,691.80; and
  • Sets the total program funding for the 2025-26 budget year
for all school districts and institute charter schools to at
least $10,035,615,917.80.
Under current law, a new at-risk measure is required to be
implemented in the 2025-26 budget year. The bill postpones the
implementation of this requirement to the 2026-27 budget year.

• Past bill versions
• Past fiscal notes
• Committee activity and documents
• Bill History