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February 24, 2022 HB 22-1202
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 22-0403
Rep. Herod; McCluskie
Sen. Zenzinger; Coleman
Date:
Bill Status:
Fiscal Analyst:
February 24, 2022
House Education
Anna Gerstle | 303-866-4375
Anna.Gerstle@state.co.us
Bill Topic: AT-RISK STUDENT MEASURE FOR SCHOOL FINANCE
Summary of
Fiscal Impact:
☐ State Revenue
☒ State Expenditure
☐ State Transfer
☐ TABOR Refund
☐ Local Government
☒ School Districts
The bill creates a new at-risk measure in the school finance formula, and establishes
a working group to determine how the new measure will be implemented. The bill
increases state expenditures in FY 2022-23 only and will impact school finance
formula funding on an ongoing basis.
Appropriation
Summary:
For FY 2022-23, the bill requires an appropriation of $150,345 to the Colorado
Department of Education. See State Appropriations Section.
Fiscal Note
Status:
The fiscal note reflects the introduced bill. This bill is recommended by the Legislative
Interim Committee on School Finance.
Table 1
State Fiscal Impacts Under HB22-1202
Budget Year
FY 2022-23
Out Year
FY 2023-24
Revenue
- -
Expenditures General Fund
1
$150,345 -
Centrally Appropriated $9,709 -
Total Expenditures $160,054 -
Total FTE 0.6 FTE -
Transfers - -
Other Budget Impacts General Fund Reserve $22,552 -
1
SB 22-087 contains similar provisions concerning direct certification of students receiving Medicaid benefits. If funding
for this work, estimated to cost $128,341, is appropriated in SB 22-087, it does not need to be appropriated in this bill.
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February 24, 2022 HB 22-1202
Summary of Legislation
New at-risk measure. Beginning in FY 2023-24, the bill creates a new at-risk measure in the school
finance formula to identify students who are at risk of below-average academic outcomes due to
socioeconomic disadvantage or poverty. The new measure includes:
a district’s percentage of students certified as eligible for free lunch based on receipt of public
benefits (SNAP, TANF, Food Distribution Program on Indian Reservation) or categorical
eligibility (foster, homeless, migrant, runaway or head start), supplemented by the direct
certification of students participating in Medicaid or Children’s Basic Health Plan; and
a neighborhood socioeconomic status index that weights student needs based on at least
five socioeconomic status neighborhood factors, linked to each student’s census block group.
Working group. The bill requires the Commissioner on Education to convene a working group to
prepare for the implementation of the new measure. The working group consists of representatives
from the Colorado Department of Education (CDE), Department of Health Care Policy and Financing
(HCPF), the Colorado Department of Human Services (CDHS), and a variety of education-related
groups.
The working group must meet by August 15, 2022, and report to the Legislative Interim Committee
on School Finance, Joint Budget Committee, and education committees by January 31, 2023. The bill
specifies what the working group may consider, including:
collecting the necessary data to implement the measure;
developing the neighborhood socioeconomic status index and determining the five index factors;
determining how a student’s neighborhood socioeconomic index value should be incorporated;
conducting pre-implementation modeling and testing with actual data;
considering the impact of the new measure on other programs; and
determining the distribution of at-risk funding, how districts and charter schools will demonstrate
that at-risk funding is being used to serve at-risk students, the process for initially identifying
students, and the design of a hold-harmless provision.
The bill requires that CDE apply to participate in the federal demonstration project for direct
certification for children receiving Medicaid benefits. If selected, CDE must enter into an agreement
with HCPF to directly certify students enrolled in Medicaid as eligible for free and reduced price meals
without further application.
State Expenditures
In FY 2022-23 only, the bill increases state General Fund expenditures in the Colorado Department of
Education by $160,054. It also may impact school finance formula funding beginning in FY 2023-24.
These impacts are listed in Table 2 and detailed below.
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February 24, 2022 HB 22-1202
Table 2
Expenditures Under HB22-1202
FY 2022-23 FY 2023-24
Department of Education
Personal Services $41,235 -
Operating Expenses $810 -
Capital Outlay Costs $6,200 -
Meeting Costs $1,300 -
Information Technology Costs $100,800 -
Centrally Appropriated Costs
1
$9,709 -
Total Cost $160,054 -
Total FTE 0.6 FTE -
1
Centrally appropriated costs are not included in the bill's appropriation.
Demonstration project. CDE requires $128,341, excluding centrally appropriated costs, and 0.4 FTE
in FY 2022-23 only to apply for the federal demonstration project for direct certification of students
receiving Medicaid benefits. Costs include one-time information technology costs to support the
application and develop implementation processes, as well as to modify CDE data systems for
Medicaid direct certification. It is estimated to require 880 hours, at a cost of $100 per hour, plus
$12,800 to modify the current CDE nutrition data system. HCPF will also have an absorbable
workload increase to enter into a data sharing agreement with CDE. Senate Bill 22-087 contains similar
provisions and costs relating to this demonstration project; funding for these costs only need to be
appropriated once.
Working group. CDE requires 0.2 FTE in FY 2022-23 only to support the working group and conduct
the modeling related to the new factor, as well as $1,300 for in-person meeting expenses. Most
working group meetings are assumed to be conducted online and the bill specifies that members of
the working group are not reimbursed for expenses. The bill also increases workload for HCPF and
CDHS to participate in the working group. No change in appropriations is required for those
agencies.
School finance. Establishing a new measure for at-risk funding will impact school finance formula
funding beginning in FY 2023-24. The exact impact will depend on how the components considered
by the working group are implemented, such as determination of the neighborhood socioeconomic
status index and how it is incorporated into the measure, the composition of at-risk factor funding
based on the new measure, any hold harmless provisions, among other things. Because the details of
have not yet been determined, potential changes to the individual district allocations and total state
share of school finance cannot be estimated at this time.
Centrally appropriated costs. Pursuant to a Joint Budget Committee policy, certain costs associated
with this bill are addressed through the annual budget process and centrally appropriated in the Long
Bill or supplemental appropriations bills, rather than in this bill. These costs, which include employee
insurance and supplemental employee retirement payments, are shown in Table 2. Page 4
February 24, 2022 HB 22-1202
Other Budget Impacts
General Fund reserve. Under current law, an amount equal to 15 percent of General Fund
appropriations must be set aside in the General Fund statutory reserve beginning in FY 2022-23. Based
on this fiscal note, the bill is expected to increase the amount of General Fund held in reserve by
$22,552 in FY 2022-23, which will decrease the amount of General Fund available for other purposes.
School District
As discussed in the state expenditures section, the new at-risk measure may change district allocations
of school finance funding beginning in FY 2023-24 and the amount or type of work required for
districts to count at-risk students. The exact impact will depend on how the components considered
by the working group are implemented, such as determination of the neighborhood socioeconomic
status index and how it is incorporated into the measure, the composition of at-risk factor funding
based on the new measure, any hold harmless provisions, among other things. Because the details of
have not yet been determined, potential changes to the total state share of school finance and
individual district allocations cannot be estimated at this time.
The bill may also increase workload for any district whose representatives serve on the working group
by a minimal amount.
Effective Date
The bill takes effect upon signature of the Governor, or upon becoming law without his signature.
State Appropriations
In FY 2022-23, the bill requires a General Fund appropriation of $150,345 to the Colorado Department
of Education, and 0.6 FTE.
The provision of the bill that requires CDE to apply for the federal demonstration project is also
included in Senate Bill 22-087. As a result, the $128,341 and 0.4 FTE required to implement that
provision only needs to be appropriated in this bill if those costs are not included in the appropriation
for Senate Bill 22-087. If the costs are included in the appropriation for SB22-087, they do not need to
be appropriated through this bill.
State and Local Government Contacts
Education Health Care Policy and Financing Human Services
The revenue and expenditure impacts in this fiscal note represent changes from current law under the bill for each
fiscal year. For additional information about fiscal notes, please visit: leg.colorado.gov/fiscalnotes.