State budget nears conclusion; School Finance Act under debate

The 2020-21 budget is nearing its conclusion, after the House approved the Long Appropriations Bill, House Bill 1360, on June 3. The Senate followed, passing the $30.3 billion budget on June 6, in a rare Saturday session.

Both northeastern Colorado lawmakers, Republicans Sen. Jerry Sonnenberg of Sterling and Rep. Rod Pelton of Cheyenne Wells, voted against the bill.

The 2020-21 budget now goes back to the Joint Budget Committee that wrote it, which as a conference committee will resolve differences between the House and Senate version.

The budget resolves a $3.3 billion shortfall in general fund revenues, the discretionary spending that funds state programs such as education, which takes up 36% of general funds, and higher education, which was slashed by 58% of its general fund support.

General fund is the one-third portion of the state budget that comes from corporate and individual income taxes and sales and use taxes, including taxes from oil and gas. Those revenues have taken a major hit in the wake of the coronavirus pandemic, as well as a precipitous decline in the price of oil, which has caused oil producers in Colorado to lay off hundreds of employees in the last three months.

What isn’t in the budget: the cut to K-12 education. That is in the School Finance Act, which had its first hearing on June 6 in the House Education Committee.

House Bill 1418 is sponsored by Speaker of the House KC Becker of Boulder, who took on the task due to what is likely to be a controversial provision: setting a uniform mill levy rate statewide.

That has led to concerns that it would require some school districts to seek higher property taxes, an unpleasant ask in the midst of a recession.

The debt to K-12 education, known as the budget stabilization factor, would be increased under the bill by $612.1 million. Coupled with the existing debt of $572.4 million, that brings the total to $1.18 billion, the highest in state history.

Given the Saturday session and the restrictions around public testimony at the Capitol, the education committee hearing drew almost no testimony.

Becker told the committee that the $612.1 million hit to K-12 would be softened by money from the Coronavirus Aid, Relief and Economic Security Act. Gov. Jared Polis directed $510 million from the state’s $1.167 billion appropriation to K-12.

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