Budget director explains why PSD is 'floor funded' and what Colorado's new school‑finance law might mean

At a Sept. 10 board meeting, Poudre School District Budget Director Brian Gustafson delivered a technical but wide‑ranging walk‑through of Colorado’s school finance formula and the changes the legislature adopted this year.

Gustafson said roughly 74% of PSD’s general fund comes from the state’s school finance “total program,” and explained that local property‑tax collections and state equalization interact such that increased local assessed value does not necessarily raise total program dollars. "More property taxes do not equal more total program funding dollars," he said.

Gustafson described key reasons PSD is classified as "floor funded": smaller multipliers for cost of living and size factors leave PSD near the statutory minimum per‑pupil calculation compared with wealthier or smaller districts. "We really don't benefit from a great cost‑of‑living factor," he said, noting PSD's calculated per‑pupil level sits close to the floor used in the formula.

He reviewed the budget‑stabilization (BS) factor — a statutory tool created after the Great Recession that reduced districts’ funding in hard years — and noted it was eliminated as of July 1 this year, though the mechanism remains. Gustafson said the BS factor’s cumulative impact on PSD since 2009 is substantial (he cited total impacts on the order of hundreds of millions over time).

Gustafson also summarized House Bill 24‑1448, the new school finance law that begins phasing in next fiscal year. The new formula will use a foundation per‑pupil amount, change the order and weighting of categorical factors (at‑risk, ELL, special education), cap the cost‑of‑living multiplier at 23%, replace some rural funding with a federally defined locale factor, and shorten the declining‑enrollment averaging from five years to four. He said Colorado Department of Education estimates and public simulators suggest the change could add funding for some districts — perhaps up to $1–1.8 million for PSD in early modeling — but he cautioned that results are highly dependent on enrollment, cost‑of‑living inputs and further adequacy studies.

Gustafson emphasized that mill‑levy overrides remain a major revenue source (about $65 million this year across PSD overrides), and that even under current formulas the district’s total program dollars fall short of its full compensation obligations — a budget challenge the district must address when planning.

Board members asked multiple technical questions about the new averaging rules, about why neighboring districts receive higher per‑pupil rates (at‑risk weights, size), and about the extent to which marijuana‑tax revenue affects school funding (Gustafson said marijuana revenue is not a major share and mostly funds capital grants). Gustafson said staff will model specific impacts once PSD’s October pupil counts and updated projections are available.

The presentation is part of a four‑part series the board will receive on school finance; the next session scheduled in two weeks will examine property tax and other local revenue sources.