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April 28, 2022 HB 22-1390
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Revised Fiscal Note
(replaces fiscal note dated April 25, 2022)
Drafting Number:
Prime Sponsors:
LLS 22-1016
Rep. McCluskie; McLachlan
Sen. Zenzinger; Lundeen
Date:
Bill Status:
Fiscal Analyst:
April 28, 2022
Senate Education
Anna Gerstle | 303-866-4375
Anna.Gerstle@state.co.us
Bill Topic: PUBLIC SCHOOL FINANCE
Summary of
Fiscal Impact:
☐ State Revenue
☒ State Expenditure
☐ State Transfer
☐ TABOR Refund
☐ Local Government
☒ School District
This bill is the 2022 School Finance Act that sets funding levels for Colorado’s
178 school districts. It also removes the cap on the participants in the ASCENT
program, and modifies several education-related programs. The bill increases state
expenditures and school district funding.
Appropriation
Summary:
For FY 2022-23, the bill requires and includes an appropriation of $184,421,986 to the
Colorado Department of Education.
Fiscal Note
Status:
The fiscal note reflects the reengrossed bill.
Table 1
State Fiscal Impacts Under HB 22-1390
Budget Year
FY 2022-23
Out Year
FY 2023-24
Revenue
- -
Expenditures General Fund $2,398,071 $2,877,888
State Education Fund $182,023,915 $266,404,046
Centrally Appropriated $8,259 $8,556
Total Expenditures $184,430,245 $269,290,490
Total FTE 0.5 FTE 0.5 FTE
Transfers General Fund ($300,000,000) -
State Education Fund $300,000,000 -
Total Transfers $0 -
Other Budget Impacts General Fund Reserve $359,711 $431,683
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April 28, 2022 HB 22-1390
Summary of Legislation
The bill makes changes to state law regarding the funding of public schools and associated programs
within the Colorado Department of Education (CDE).
Base per pupil funding. The bill increases base per pupil funding for FY 2022-23 by $252.88 to
$7,478.16, which reflects a 3.5 percent inflation rate.
Budget stabilization factor. The bill decreases the budget stabilization factor by $182.0 million, from
$503.3 million in FY 2021-22 to $321.2 million in FY 2022-23. For FY 2023-24, the bill specifies that the
budget stabilization factor cannot exceed FY 2022-23 levels.
ASCENT program. The bill modifies the Accelerating Students through Concurrent Enrollment
(ASCENT) program. The number of participating students, which is determined through the budget
process, is currently capped at 500 students, and students must be designated by CDE to participate.
The bill removes the limit on the number of students who can participate, and allows the district or
school to designate eligible students for participation instead of the CDE.
The bill reduces the number of credit hours of postsecondary work ASCENT students are required to
complete prior to the student’s twelfth grade year from 12 to 9. Districts and charter schools must
report to CDE the estimated number of ASCENT participants for the upcoming school year, and CDE
must report the total estimated participants to the General Assembly as part of its budget request.
The bill repeals provisions requiring students who do not complete concurrent enrollment courses to
repay the amount of tuition paid by the LEP on the student’s behalf, and makes conforming
amendments to the deadlines for and content of the annual concurrent enrollment report.
District auditing requirements. Under current law, school districts must conduct an annual audit of
financial statements, and submit the audit report to the Office of the State Auditor (OSA) within thirty
days after receiving the report. If the audit is not submitted within three months after the deadline,
the State Auditor may require the county treasurer to prohibit the release of local tax money to the
district. The bill grants an additional extension of 12 months to districts that:
are classified as rural or small rural;
have exhausted all available extensions in current law; and
demonstrate to the state auditor that the district was unable to retain an auditor to complete the
annual audit.
If a district does not complete an audit within the extension, the Office of the State Auditor must make
or cause the audit to be made, subject to provisions in current law.
American Indian mascots. If a public school was notified between May 1 and June 1, 2022 that use of
their mascot is prohibited because it includes an American Indian tribe, individual, or custom, the
school must discontinue the use by June 1, 2023, an extension of one year.
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April 28, 2022 HB 22-1390
BOCES schools. The bill extends for six months, through December 31, 2022 the requirement that a
Board of Cooperative Educational Services (BOCES) obtain written consent from a school district
before authorizing a school or an additional location of an existing school that is physically located
within the boundaries for that district, provided the school district is not a member of the BOCES.
This requirement does not apply to a school operating prior to June 11, 2021, as long as the school
continues to operate through December 31, 2022.
School choice. The bill specifies that if a school district enrolls a student whose parent is a resident of
the state, but not the district, the school district must not charge tuition for the student to attend school
in the district, regardless of the circumstances of the student’s enrollment.
Program changes. The bill makes the following changes to education policies and programs:
extends the dyslexia screening and intervention pilot program by one year;
extends the K-5 Social – Emotional Health Pilot Program by one year and modifies the
requirements for school mental health professionals participating in the program;
allows districts to carry over more than 15 percent of FY 2021-22 READ Act per pupil intervention
funds for use in FY 2022-23;
allows recipients of the educator recruitment and retention grant to agree to teach in an educator
shortage area as a condition of program participation, as determined by the State Board of
Education;
clarifies the program match requirement for vendors that contract with CDE to develop a quality
teacher and recruitment program;
repeals the provision allowing CDE to annually reallocate money among providers participating
in the local school food purchasing program;
allows 20 percent of the money appropriated for the Imagination Library program in FY 2022-23
and thereafter to be used by the contracted program operator for operating costs; and
specifies that, due to the suspension of funding in FY 2020-21, the third year of the local
accountability system grant program is FY 2022-23. The bill appropriates $100,000 for the program
evaluation that must occur in the program’s third year.
Home-based education codes. The bill requires that CDE, upon request of a school district, must
assign a separate school code to a program that provides homeschool enrichment services to students
who participate in nonpublic homeschool educational programs.
Background
The ASCENT program allows selected students to enroll in postsecondary courses and be included in
a local education provider’s pupil enrollment during the year following the student’s fourth year of
high school. In recent years, the General Assembly has approved 500 slots per year. Page 4
April 28, 2022 HB 22-1390
State Revenue
By providing certain schools an extension to comply with the prohibition on American Indian
mascots, the bill may decrease fine revenue that would have been deposited in the State Education
Fund in FY 2022-23. The fiscal note assumes that schools will utilize the extension to comply, and that
any fine revenue collected in FY 2023-24 will be minimal.
State Transfer
In FY 2022-23, the bill transfers $300.0 million from the General Fund to the State Education Fund.
State Expenditures
In FY 2022-23, the bill increases state expenditures by $184.4 million. In FY 2023-24, the bill increases
state funding by $269.3 million; that amount does not include changes to school finance as a result of
actual enrollment, local share, and inflation. The components of the expenditure changes are listed in
Table 2 and discussed below.
Table 2
Expenditures Under HB22-1390
FY 2022-23 FY 2023-24
Department of Education
Personal Services $36,238 $39,533
Operating Expenses $675 $675
Capital Outlay Costs $6,200 -
State Share of School Finance – Base & BSF $182,023,915 $266,404,046
State Share of School Finance – ASCENT $2,101,985 $2,837,680
Homeschool Coding Change $25,000
Local Accountability Systems Grant Evaluation $100,000 -
Dyslexia Pilot Program Continuation $127,973 -
Centrally Appropriated Costs
1
$8,259 $8,556
Total Cost $184,430,245 $269,290,490
Total FTE 0.5 FTE 0.5 FTE
1
Centrally appropriated costs are not included in the bill's appropriation.
School finance – FY 2022-23. The bill sets total program funding for FY 2022-23 at $8.4 billion. This
represents a 3.67 percent ($321.2 million) reduction from what funding levels would be without the
budget stabilization factor. Compared to current law, the bill increases total program funding in
FY 2022-23 by $184.1 million, including $182.0 decrease in the budget stabilization factor ($149 higher
than the amount set aside by the Joint Budget Committee, due to a technical adjustment.), and $2.1
million for the estimated increase in the ASCENT program. Page 5
April 28, 2022 HB 22-1390
Compared to actual funding in FY 2021-22, the bill increases total program funding by $433.1 million.
State expenditures for school finance will increase by $356.6 million and the local share of funding
will increase by $76.5 million, compared to FY 2021-22. State funding is from the General Fund, State
Education Fund, and State Public School Fund. Table 3 shows an estimate of school funding under
this bill, after the budget stabilization factor, compared to FY 2021-22.
Table 3
School Finance Act Funding Under HB22-1390
Fiscal Year
Pupil
Count
Per Pupil
Funding Total Program State Share Local Share
FY 2021-22 Actual 886,249 $9,015 $7,989,164,350 $4,708,971,499 $3,280,192,851
FY 2022-23 Est. 881,053 $9,559 $8,422,265,845 $5,065,604,795 $3,356,661,200
Change (5,196) $545 $433,101,495 $356,633,297 $76,468,348
Percent Change -0.6% 6.0% 5.4% 7.6% 2.3%
Assumptions. The fiscal note assumes that 350 additional students in FY 2022-23 will participate in the
ASCENT program, distributed among districts based on their portion of ASCENT slots over the last
three years. This is based on the following data and assumptions:
on average, LEPs have requested 795 slots in each of the last four years, or 295 more than the
500 slots that have been available;
lowering the number of credit hours that must be completed will increase the number of
participants; and
due to the initial implementation time frame, the initial increase in participating students will
occur over two years, with a 35 percent increase in new cost required in FY 2024-24.
The fiscal note assumes that beginning in FY 2023-24, funding for the program will be based on the
actual number of expected participants, as reported to CDE, and actual extended high school per pupil
funding after the application of the budget stabilization factor.
School finance – FY 2023-24 preliminary estimate. For FY 2023-24, total program funding will be
$269.3 million more than the FY 2022-23 funding level; this amount does not include changes to school
finance as a result of actual enrollment, local share, and inflation. The estimate was made by
increasing the $249.0 million increase in total program before the budget stabilization factor by
7.0 percent, Legislative Council Staff’s current projection for inflation rate in 2022, and adding the
estimated $2.8 million cost for ASCENT.
CDE. To implement the changes to the ASCENT program and modify the coding for homeschool
students, CDE will have increased costs, described below.
ASCENT. Beginning in FY 2022-23, CDE requires 0.5 FTE to support the expanded program,
including providing technical assistance, guidance, and outreach to additional districts,
supporting data collection and reporting, handling participation requests, and supporting
districts that expand concurrent enrollment opportunities. Standard operating and capital outlay
costs are included; personal services in FY 2022-23 are prorated for the General Fund paydate shift. Page 6
April 28, 2022 HB 22-1390
Coding. CDE requires $25,000 in FY 2022-23 only to modify computer systems to reflect the coding
for certain homeschool students participating in enrichment programs in school districts.
Local accountability systems grant program. CDE requires $100,000 in FY 2022-23 to contract for the
evaluation of the local accountability systems grant program. Current law requires that the program
evaluation occur in the program’s third year, which would have been FY 2021-22 if not for the
suspension of funding in FY 2020-21 due to the pandemic. The bill specifies that the evaluation must
occur in FY 2022-23.
Dyslexia pilot program. CDE requires $127,973 in FY 2022-23 for the one-year extension of the
dyslexia pilot program. This amount will be used for the contract with the University of Oregon,
which currently runs the program.
Office of the State Auditor. The bill increases workload and potentially costs for the OSA to
coordinate with districts that are eligible for an extension of their audit deadline. Should a district not
complete their audit during the 12-month extension, the OSA will incur costs to complete the audit.
Costs are estimated at about $20,000 per school district, plus staff time to manage the audit contract,
and will be reimbursed by the school district. If needed, the OSA will request these resources through
the annual budget process.
Institutions of higher education. Institutions of higher education that provide concurrent enrollment
to students through the ASCENT program will have additional enrollment and tuition revenue from
expansion of the program. State funding for institutions of higher education is partially allocated
based on changes in enrollment and degrees awarded. To the extent the bill increases enrollment and
degrees awarded, an institution's allocation of state funding may increase. No change in
appropriations for higher education is required.
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.
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 the
amounts in Table 1, which will decrease the amount of General Fund available for other purposes.
School District
Total program. Table 3 compares estimated FY 2022-23 school finance funding levels with actual
funding in FY 2021-22. In FY 2022-23, the bill increases funding by $545 per pupil and funds 5,196
fewer pupils statewide. Total program funding increases by $433.1 million, from $8.0 billion to
$8.4 billion. Of this amount, the state’s share increases by $356.6 million, from $4.7 billion to Page 7
April 28, 2022 HB 22-1390
$5.1 billion, and the local share increases by $76.5 million, from $3.3 billion to $3.4 billion. For a
breakdown of the impact on individual districts, please see:
http://leg.colorado.gov/agencies/legislative-council-staff/school-finance.
ASCENT. The bill increases revenue and expenditures for school districts whose students participate
in ASCENT. Districts will have additional workload to designate participating students, conduct
outreach, and support students enrolling in postsecondary opportunities, as well as to distribute
funds to the institutions of higher education.
Other changes. The programmatic and technical changes in the bill will impact some school districts.
Exact impacts are unknown, as they will vary by district. For districts participating in the dyslexia
pilot program or K-5 Social-Emotional Health program, revenue and expenditures associated with
those programs will continue for one more year.
Effective Date
The bill takes effect upon signature of the Governor, or upon becoming law without his signature.
State Appropriations
For FY 2022-23, the bill requires and includes the following appropriations to the Colorado
Department of Education:
$2,101,985 from the General Fund for the state share of school finance (ASCENT changes);
$182,023,915 from the State Education Fund for the state share of school finance;
$25,000 from the General Fund for data coding changes;
$43,113 from the General Fund for ASCENT administration;
$100,000 from the General Fund for the local accountability systems grant program; and
$127,973 from the General Fund for the dyslexia pilot program.
State and Local Government Contacts
Education State Auditor
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.