Just as Colorado public schools were breathing a collective sigh of relief over the elimination of the Budget Stabilization Factor in the state’s annual budget, an updated per-pupil funding model could have districts facing unexpected budget cuts.

With student enrollment declining across Western Slope districts, some education officials are nervous about Gov. Jared Polis’ budget proposal for 2025-26. 

The proposal, released on Nov. 1, would designate $115 million more from the general fund to the existing $9.8 billion K-12 budget and $13.5 million in categorical funding to specific groups of students and student needs. It also contains a few unpopular changes to Colorado’s public school finance formula and how funding is awarded to districts. 

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If approved, Colorado schools would no longer follow the four-year enrollment average model for funding under House Bill 24-1448. Instead, funding would be based on a current-year enrollment estimate, which is already the practice for 40 other states.

For school districts with declining enrollment, this would mean faster-approaching budget cuts. 

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“What averaging provides is a smoothing ability, so you can predict what your budget will be and adjust accordingly,” said Lisa Webster, vice president for the Summit School District Board of Education. 

Polis said the changes are meant to save the state money as officials try to fill a $635 million budget shortfall and ensure the state does not have to bring back the Budget Stabilization Factor eliminated earlier this year, which would underfund schools.

Even with the threat of another Budget Stabilization Factor at bay, changing to a current-year formula will reduce funding for schools by about $190 million, according to the Colorado Fiscal Institute.

These funding cuts come just months after the approval of the governor’s 2024-25 budget, which promised to fully fund public schools for the first time in 14 years to keep pace with inflation.

Falling enrollment in Western Slope districts

The Colorado Department of Education reported the state’s public school enrollment has fallen consistently since 2020, with the exception of 2021. Earlier this year, preschool-12th grade enrollment reached the state’s lowest mark in a decade, which the department chalked up to declining birth rates and slowed net migration in the state. 

Several school districts on the Western Slope — including districts in Mesa, Summit and Eagle counties — have reported falling enrollment numbers during the past few years. Whereas the previous five-year and current four-year average models helped to create a buffer for gradually shrinking budgets, districts could now see steeper differences from year to year. 

From 2019 to 2024, Mesa County Valley School District’s enrollment dropped by roughly 10%, or 2,200 students. By 2030, district enrollment is estimated to decline by 11.3% more as the number of children living in Mesa County decreases, according to local and state demographer projections.

Superintendent Brian Hill said the state demographer projects the district won’t hit a positive enrollment peak until 2041, which still won’t be as high as it was prepandemic. 

“We’re having to make some decisions based on those declines, and also knowing that future declines are coming as well,” Hill said. 

The Mesa County Valley School District had already been making adjustments to its budget based on declining enrollment even before the governor’s proposal, which Hill said caught district officials by surprise.  

“We followed closely everything that happened with the legislature last year,” Hill said. “This was never part of the proposal that was shared last year. … If this was something that they were seriously considering, it would have been nice to have known that a year ago.” 

Hill said the district had advocated for solutions that wouldn’t negatively impact school districts on the Western Slope during the legislative session, as they have already had to eliminate central office jobs, reduce school staffing and recommend schools for closures. 

“(At first) we were optimistic that that new funding formula would help in the long term in that we would finally be getting some funding for some of our students with the greatest needs,” Mesa County Valley School District Chief Financial Officer Melanie Trujillo said. “We were planning for that change from five years to four years (after House Bill 24-1448), but we weren’t planning on a change that would eliminate that averaging altogether.” 

Without the averaging, the district is left without a funding buffer to help officials move strategically into the student decline. According to Trujillo, the difference between the district’s average funded student count and the current student count is about $11.7 million in its current adopted budget. That’s an 8.4% reduction going into the 2025-26 school year based on projected student counts. 

“Right now, we’re looking at basically hoping to break even,” she said. “It might help us cover some of the contractual cost increases that we need, but it definitely wouldn’t go very far toward funding any pay increases for our staff.” 

Roughly 80% of the district’s general fund budget goes toward staff and benefits. In the Summit School District, 89% of the district’s general fund budget goes toward staff and benefits. A shrinking budget could lead to less staffing or reduced salaries in Western Slope districts already experiencing teacher shortages and growing housing costs. 

In addition, Hill said the Mesa County Valley School District already has some of the lowest per-pupil funding in the state, ranking at 174 out of 178 districts, despite being the largest school district on the Western Slope and the 15th-largest school district in the state.

“When funding cuts of this magnitude are made, it’s nearly impossible not to impact either employee positions and pay, especially in the context of declining enrollment,” Trujillo said. 

Summit School District’s enrollment has fluctuated in recent years, with a slight drop of over 300 students since 2022. Webster said the district will likely see a decrease in funding if Polis’ budget request goes through, pending General Assembly negotiations. 

Not all Western Slope districts have followed statewide trends, however. Garfield County School District 16, for example, has maintained a close-to-average enrollment rate in 2024 and is projected to stay consistent as the area sees more development. 

Superintendent Jennifer Baugh said the district likely wouldn’t see major funding changes in the next few years from the elimination of four-year enrollment funding, though having to report, plan and spend its budget on a tight timeline would still be a challenge. 

The deadline for adopting a budget is June 30, though schools sometimes won’t have final enrollment counts — which are based on October enrollment — until December.

“You could have 20 students that enroll Nov. 10, (but) you don’t get those funds until the following year, presuming that they stay,” Baugh said. “I think that that makes all school districts a little bit nervous, especially if they’re kids who have special education needs and require services that might require additional staff.”

This leaves districts to make hiring decisions and other large expenditures before knowing what their final budget will be. 

“Once you go into the school year, you’ve already hired the staff that you think you need, and so any deviation to the funding that you would receive could put pressure on those dollars,” Trujillo said. 

Of the states that don’t use an averaging-based formula for pupil count, several tend to look at enrollment from the previous year for earlier access to final budget numbers. 

A shift from anticipated funding relief

Although some districts were planning to see increases in their budget from House Bill 24-1448’s changes to per-pupil funding and the governor’s latest proposal to increase per-pupil funding to an average of $11,747, the proposal would also lengthen the implementation of Colorado’s New Public School Finance Formula from a timeline of six years to seven, slowing any relief that would come from increases in per-pupil funding for public education. 

“It’s more money, which is great, which now maybe it’s not going to be, but is it actually going to meet all the needs of students in Colorado?” Hill said. “Now that we’re actually making changes already before it’s even being implemented is worrisome.” 

“I am hoping that if we are heading toward a zero-averaging model, that we phase it in, because I think it’ll be a big jolt across the state,” Webster said. “Because we’ve been living under a negative factor for so long … I’ll compare it to someone who has given blood for a long time. At some point you need a blood infusion to get healthy, and that’s where public education in Colorado is, in my opinion.” 

The governor’s proposal also includes a cap on BEST cash grants, which provide capital funds for schools. The cap would redirect roughly $60-$80 million of the revenue usually distributed to schools to the State Public School Fund. 

Polis’ proposed budget isn’t set in stone. Results of the November election could create changes to the proposal — to be updated in January — and the Joint Budget Committee has yet to release its own budget proposal in the spring.