Senate committee advances School Finance Act after hours of debate over hold‑harmless, BEST cash shifts

Senate Education Committee members voted unanimously to send House Bill 13‑20 — the School Finance Act — to the Appropriations Committee after a lengthy hearing that included sponsors, school leaders and district finance officers.

Supporters said the bill implements the student‑centered funding formula passed last year while protecting districts from immediate cuts. “This bill…increases the statewide base per pupil funding for the 25‑26 budget year by $195.42 per student,” sponsor Senator Kerry Lundin said during opening remarks. The measure directs a $256 million increase in state funding in a year the state faces a roughly $1.2 billion budget shortfall.

The bill sets a new statewide base per pupil amount for 2025‑26 at $8,691.80 and sets total program funding at about $10,305,615,917.80, according to sponsors’ remarks. Supporters described the proposal as a phased implementation of the new funding formula passed last year (often referred to in testimony as the implementation of House Bill 1448), with a multi‑year phase‑in to limit fiscal shocks while directing more resources to higher‑need students.

Why it matters: Sponsors and many witnesses said the measure advances equity by directing more resources to students who need additional supports — students in poverty, English language learners and those on Individualized Education Programs. “Finally, we did something about the equity piece,” said Senate sponsor Senator Bridges. Proponents argued the bill balances competing demands by phasing implementation and by including procedural safeguards that allow the legislature to pause or adjust implementation if state revenues decline sharply.

Key debate points

Hold‑harmless and averaging — Several senators pressed sponsors about “hold‑harmless” language that prevents districts from receiving less total program dollars in 2025‑26 than they did in 2024‑25. Sponsors said 21 districts would be held harmless (no cut to their total dollars) and the remaining districts would see an average 2.9% increase in funding; per‑pupil revenue would increase by an average of about $380 per pupil statewide.

Senators and witnesses pressed how the bill interacts with declining enrollment averaging. Sponsor Lundin and co‑sponsor Bridges described a gradual reduction in averaging (four‑year to three‑year averaging) tied to funding conditions and the phased formula. The Joint Budget Committee retains tools to evaluate timing and limits, sponsors said.

BEST cash fund transfers — Committee members and rural district speakers questioned the bill’s use of BEST (the public school capital construction assistance fund) cash for operations. Witnesses said HB13‑20 would shift about $45.6 million from BEST in the current year, then $24.6 million and $20.6 million in subsequent years, to help pay for ongoing operations. Rural superintendents and the Colorado Rural Schools Alliance asked the committee to restore or increase BEST funding, saying many districts cannot bond for needed capital projects without BEST support.

At‑risk measure and other programs — Members asked about delayed implementation of an updated at‑risk measure passed in 2022 and about programmatic choices the Joint Budget Committee made amid the budget shortfall (for example, prioritizing out‑of‑school time funding over a high‑impact tutoring pilot). Sponsors said some programmatic decisions were difficult and could be revisited on the floor or in later budget actions.

Witnesses — Dozens of district superintendents, CFOs and education groups testified in support, including representatives of Denver Public Schools, Aurora Public Schools, Greeley‑Evans Weld RE‑6, Mapleton Public Schools and the Colorado Education Association. Rural advocates and the Colorado Rural Schools Alliance urged amendments or floor action to increase BEST capital dollars and to consider rural impacts.

Formal action — Senator Lundin moved the bill as amended to the Appropriations Committee; the committee recorded a unanimous vote and advanced HB13‑20 to appropriations.

Ending note — Sponsors described the bill as a step toward a more equitable, student‑centered funding formula while acknowledging it does not fully close the adequacy gap. “This is a step along the way,” Lundin said. Committee sponsors urged continued work to implement and refine the formula and to address adequacy in future years.