House committee advances School Finance Act, adopts phased implementation and safeguards

The Colorado House Education Committee advanced House Bill 13-20, the 2025 School Finance Act, after hours of testimony and several amendments that change how the new school funding formula will be phased in and monitored.

The bill implements portions of last year’s school finance law (commonly referred to in testimony as 14-48) and directs $256 million of new K‑12 funding for fiscal 2025-26 while shielding some districts from cuts amid a projected statewide budget shortfall. Sponsors said the package ensures no district will receive less funding next year than it did in 2024-25 and that higher-need students will receive proportionally more funding.

Supporters said the bill begins a multi-year transition to a student-centered funding formula that increases weights for students living in poverty, English learners and students with special learning needs. Representative (Speaker) Rachel McCluskey, one of the bill’s prime sponsors, said the proposal preserves four‑year enrollment averaging for 2025-26, phases implementation of the new formula over a longer period (moving from 18% to 15% of new money for year one and extending the ramp to seven years), and adds economic safeguards and reporting triggers to protect the state education fund.

Committee discussion focused on three recurring concerns: the sustainability of the state education fund, protections for small and rural districts facing enrollment declines, and the treatment of certain charter schools that currently receive supplemental “at‑risk” aid under older statute. Sponsors said they used a mix of general fund and state education fund dollars — $150 million of general fund in the package — and that the state education fund balance provides a cushion in the near term. Co-prime sponsor Representative Lukens said the bill includes a mechanism to pause or adjust implementation if revenues deteriorate sharply.

Lawmakers also added several technical and policy amendments during the hearing. Key changes adopted in committee include: - A correction to pupil counts for students misclassified between brick‑and‑mortar and multi‑district online learning (MDOL) so averaging uses corrected counts (amendment L009). - Temporary grandfathering for five districts whose NCES locale classifications were made more urban by a recent NCES update (amendment L002). - A two‑year stepdown of an older charter “at‑risk” supplemental aid so those historical allocations phase out rather than end abruptly (amendment L003). - A one‑year cap on the statewide public school capital grant program (BEST) at $150 million for the coming fiscal year (amendment L004). That amendment passed on a roll-call vote, 12-1. - A technical cleanup package including transportation and public‑service campaign provisions (amendment L005, passed without objection). - An increase to the moral‑obligation bond program cap for charter facility financing from $750 million to $1 billion (amendment L006), which passed 11-2. - Language directing formation of a stakeholder work group (including superintendents and CFOs from urban, rural and small rural districts) to develop a potential smoothing factor and to recommend tracking methods should the legislature be unable to meet the Amendment 23 inflationary requirement (amendment L010).

Witnesses from school districts, statewide associations and teacher organizations provided mostly supportive testimony. Superintendents from large and rural districts described how the new formula would direct more resources to students with higher needs and asked for a careful, multi‑year roll‑out to avoid sudden “cliffs” for districts with declining enrollment. Colorado Education Association President Kevin Vick and other labor and advocacy groups urged steady implementation only when funding is sustainable and supported a tracking mechanism to record any withheld funding.

Opponents or those urging changes were focused on specific technical issues: the interaction between existing charter school statutes and the new formula (a concern raised by Adams 12 Superintendent Chris Kadowski), the timing and practical design of any smoothing mechanism, and the durability of the state education fund over a multi‑year economic dip.

The committee adopted the bill as amended and voted to send it to Appropriations with a favorable recommendation. The motion to advance the bill passed unanimously in committee.

Representative McCluskey said the measure represents a “beginning” — an incremental but student‑centered shift in how Colorado pays for K‑12 education. She asked committee members to continue working with stakeholders on implementation details this interim.

"We will need to review implementation year by year," she said, "but for today this bill brings more dollars to our public schools for next year." — Representative Rachel McCluskey

"This is a step toward equity in Colorado school funding," added Denver Public Schools CFO Chuck Carpenter in testimony. "The new formula puts funds where the needs are." — Chuck Carpenter

The committee recorded and adopted multiple technical amendments; sponsors said they would continue stakeholder outreach on the smoothing‑factor design and monitoring requirements before the bill advances further in the legislative process.

Votes at a glance: L004 (BEST cap) passed 12-1; L006 (moral obligation cap increase) passed 11-2; the amended bill to Appropriations passed unanimously.

The committee set next steps: the bill proceeds to the Appropriations Committee, stakeholders will be convened to develop smoothing‑factor options and reporting requirements, and staff will provide additional fiscal modeling to members.