New school finance act still to be played out in full House

Despite more than 28 hours of committee hearings, debates and dozens of amendments, the new school finance act, Senate Bill 13-213, may still have a long way to go.

The bill came out of the Senate on April 7 on a party-line 20-15 vote. On April 15, the bill went through another seven hours of debate in the House Education Committee, which passed it on a 7-6 party-line vote. SB 213 has yet to garner even one Republican vote.

As introduced, the new school finance act changes the formula for financing public education. All kindergarten students who meet the eligibility requirements would be funded for all day school; pre-school students would be funded as half-day pupils. Enrollment funding would be calculated on an average daily membership (ADM) rather than based on attendance on one day each year, beginning in 2015-16.

The bill changes the funding for at-risk and English language learners (ELL) students, by allowing those who qualify under both definitions to be funded twice, to allow for a longer school year for those students.

Under SB 213, the Colorado Department of Education must prepare a report every four years that analyzes the increases in academic growth and achievement in districts that have received increased funding, and to include cost studies that identify funding deficits and the amounts needed to correct those deficits. The bill also envisions a more transparent public finance reporting system, to add reporting of expenditures, including salary and benefits, at each school. The department of education is then required to create a website that will translate that data into a format that can be understood by the “layperson.” The new school finance act must have its new funding, estimated at about $1 billion, approved by voters through a ballot initiative this November.

But amendments put on SB 213 by the Senate weakened its support from some business leaders. The Colorado Association of School Boards also opposes the bill, although its deputy director said this week they are headed back to negotiations with sponsors on language that could change their position.

The major sticking points with SB 213 are in how school districts share mill levies with charter schools, and just how much, if any, autonomy school principals should have in deciding how to spend ELL and at-risk funds.

In the Senate, SB 213 sponsor Sen. Michael Johnston, D-Denver, put forth an amendment to strike language requiring school districts to share mill levies with charter schools. The amendment instead created an $18 million charter school equity fund, administered by the Department of Education. Johnston told the Senate during second reading debate on April 1 that the equity fund would equalize funding for charter schools.

Johnston’s amendment didn’t sit well with some charters or the business community. Their objections were based on the loss of local control over negotiations between districts and charter schools on mill levy funding, a lack of transparency in how charters would be funded, and concerns over funding equity.

The House Education Committee heard those objections first from the Denver Metro Chamber of Commerce, which moved away from its previous support of SB 213. Chamber President Kelly Brough told the education committee that the chamber would not support the bill without the original language on charter school funding. She explained that the chamber’s fundamental principle about education is that funding should be equitable. “Charters are approved by [school] districts,” she said. “It’s the same accountability and there’s no rational basis to fund them differently.”

Bill Kurtz, CEO of DSST Public Schools, which operates six charter schools in Denver, said the funding piece for charters in SB 213 is critical. “There should be transparency about how districts share the financing of charters,” he said. It doesn’t make sense for a parent to send one child to a district school and another to a charter school and have them financed differently. “I urge you to protect and enhance the equity in the funding of the charters,” he said.

How schools share locally-generated revenue is a “locally-negotiated and determined process, not one mandated at the state level,” according to Walt Cooper of Cheyenne Mountain School District. Cooper testified on behalf of the Colorado Association of School Executives, which also opposed the Senate amendment language on sharing of mill levies.

The Colorado League of Charter Schools also pleaded with the committee to adopt an amendment that would put the school districts and charter schools back at the negotiating table on sharing of mill levies.

The League was originally neutral on SB 213, but the changes on charter school funding in the Senate pushed the League’s board to a position of unanimous opposition, according to Vinny Badolato, its public affairs director. The League also had concerns about the enrollment calculations, capital construction costs, and special education funding as contained in SB 213.

The House sponsor of SB 213, Rep. Millie Hamner, D-Frisco, had two amendments at the ready to deal with the charter school funding issue, although neither restored all of the original charter language of the bill.

Hamner told the committee that her amendment was an attempt to bring charter schools to support of the bill in a way that also gets the districts to support the bill. Under the amendment, the $18 million equity fund would be converted to funding for charter facilities and districts would be required to negotiate sharing of future mill levy overrides with the charters. A report on how mill levies are shared was also part of that amendment. That got the charter support, Hamner said, but not the districts. A second amendment allows the districts to review the report prior to public release. It might not get the districts 100 percent of the way there, Hamner said, and more amendments on the House floor are likely on this issue.

Principal autonomy over certain aspects of program funding got strong opposition from the Colorado Association of School Boards (CASB).

Under the bill as introduced, school principals have full autonomy to use at-risk and ELL funding as he or she sees fit for the benefit of those students. Scott Leban of Colorado Succeeds, a non-profit coalition of business leaders, told the committee they wanted to see the charter funding language restored, but his group also supports principal autonomy. Rep. Lois Court, D-Denver, asked Leban why a principal should make those decisions instead of elected school boards. “Principals know the intricacies of the classroom more than an elected board,” Leban replied, and where to be strategic with those investments. He pointed out that principals are held accountable for those decisions under the 2010 educator effectiveness bill SB 10-191.

CASB’s Jane Urschel told the committee that elected school boards are also held accountable for that decision-making.

“We had hoped to come to the table in support of SB 213 that would take reform and accountability to new heights,” Urschel told the committee. “But then came last Saturday morning, and our compromise language [on funding that follows the student] was rejected. Negotiations failed in the twelfth hour and the curtain fell.” Urschel said the language on principal autonomy is both unconstitutional and a violation of state law. “Locally-elected school boards have full responsibility for instruction,” Urschel explained, and that means funding. The bottom line for CASB is that if they are going to ask local citizens in 178 school districts for more money, “we have to defend local accountability, to make sure programs fit with local district and community efforts”

Urschel said CASB has “no problems with principals having a say or influencing [the budget].” But the representative of the school board is the superintendent of schools, not the principals, and those elected school board members are held accountable for how the dollars are spent. “It’s a question of accountability, not trust.”

While the committee spent more than two hours going through a whole host of amendments, none addressed the concerns Urschel raised. She told The Colorado Statesman this week that CASB is still concerned about the principal autonomy issue in SB 213, but the organization is “encouraged” and has resumed negotiations with Johnston. Urschel said CASB would prefer to see the issue addressed in the House when SB 213 comes up for second reading, rather than waiting for a conference committee to deal with it.

In related news, the 25 ballot initiatives filed to accompany SB 213 are now awaiting action from the title board. All of the initiatives went through a review and comment hearing with Legislative Council staff on April 5.

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