Page 1
June 27, 2024 HB 24-1390
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Final Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 24-1081
Rep. Bird; Sirota
Sen. Kirkmeyer; Bridges
Date:
Bill Status:
Fiscal Analyst:
June 27, 2024
Signed into Law
Anna Gerstle | 303-866-4375
anna.gerstle@coleg.gov
Bill Topic: SCHOOL FOOD PROGRAMS
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☐ State Transfer
☐ TABOR Refund
☐ Local Government
☒ School District
Budget package bill. The bill makes changes to the Healthy School Meals for All
program and creates a technical advisory group to make financial recommendations
for the program. On net, the bill shifts state expenditures in FY 2023-24 and decreases
state and school district expenditures in FY 2024-25.
Appropriation
Summary:
For the current FY 2023-24, the bill includes appropriations shifting $15.4 million from
the General Fund to State Education Fund. For FY 2024-25, the bill requires and
includes a net appropriation reduction of $17.8 million to the Colorado Department of
Education. See State Appropriations Section.
Fiscal Note
Status:
The final fiscal note reflects the enacted bill. The bill was recommended by the Joint
Budget Committee as part of the FY 2024-25 budget package.
Table 1
State Fiscal Impacts Under HB 24-1390
1
Current Year
FY 2023-24
Budget Year
FY 2024-25
Out Year
FY 2025-26
Revenue - - -
Expenditures General Fund ($15,439,107) ($40,642,134) -
HSM GF Exempt Account - ($116,200,000) -
HSM Cash Fund - $116,129,410 -
State Education Fund $15,439,107 $22,892,545 -
Centrally Appropriated - ($13,126) -
Total Expenditures $0 ($17,833,305) -
Total FTE - (0.6 FTE) -
Transfers - - -
Other Budget Impacts General Fund Reserve ($2,315,866) ($6,096,320) -
1
HSM refers to the Healthy School Meals for All program. Page 2
June 27, 2024 HB 24-1390
Summary of Legislation
The bill makes changes to the Healthy School Meals for All program.
Grant and wage programs. Under current law, a local school food purchasing grant program, a
technical assistance grant program, and an employee wage program begin in FY 2024-25. The
bill delays these programs for one year, until FY 2025-26.
State law also repealed the school food purchasing reimbursement and technical assistance
grant programs on January 1, 2024. The bill continues those programs for one year and adds a
minimum reimbursement amount of at least $0.05 per meal or a minimum of $1,000 for each
participating school food provider.
Advisory group. The bill creates a technical advisory group in the Colorado Department of
Education (CDE) to collaborate with school districts, the Office of State Planning and Budgeting
and other interested parties to:
identify ways to maximize federal funding;
reduce costs of the program and review cost-saving options;
strengthen the long-term resiliency of the Healthy School Meals Cash Fund;
model revenue scenarios; and
provide options for balancing program revenues and expenditures in the most equitable way
for students and school food authorities.
In 2024, the group must report to the JBC in June and September, with a final report by
December 1. CDE must obtain any contractual services necessary. Legislative Council Staff and
Joint Budget Committee Staff must provide technical support to the advisory group.
Maximizing federal funding. The bill requires CDE to establish options for a school food
authority to maximize federal funding, including participating in other federal meal programs
that draw down reimbursement. If an SFA chooses not to utilize those options, the school food
authority is responsible for covering the cost of serving free meals. By July 1, 2024, CDE must
also create a policy for SFAs to maximize collection of household income application forms for
federal free and reduced price meal eligibility.
Audit requirements. The bill delays the deadline for a program audit to be completed from
December 2025 to December 2027.
Program funding mechanics. The bill creates the new Healthy School Meals for All Cash Fund
to replace the existing Healthy School Meals for All General Fund Exempt Account. On
July 1, 2024, the State Treasurer must transfer any remaining balance in the account to the cash
fund. It also allows the State Education Fund to be used for the program.
Program refinancing. In the current FY 2023-24, the bill shifts $15.4 million in school meals
expenditures from the General Fund to the State Education Fund. For FY 2024-25, the bill
refinances $138.3 million in meal reimbursement and program administration costs from the
General Fund and Healthy School Meals General Fund Exempt Account to the Healthy School
Meals Cash Fund ($116.1 million) and State Education Fund ($22.1 million). Page 3
June 27, 2024 HB 24-1390
Background
Healthy School Meals for All. The Healthy School Meals for All Program was approved by
voters in 2022 to provide free meals to all students on an ongoing basis beginning in
FY 2023-24, and establish local school food purchasing reimbursement, employee wage
reimbursement, and local food technical assistance grant programs beginning in FY 2024-25. To
participate in the program, school food authorities must participate in the federal Community
Eligibility Provision, if eligible, to draw down federal meal reimbursements.
The program is funded by requiring that taxpayers with an adjusted gross income of $300,000 or
more must add back a portion of their federal itemized or standard deductions when calculating
Colorado taxable income. Senate Bill 23-221 created the Healthy School Meals for All Program
General Fund Exempt Account to contain the revenue generated for the program. The
Department of Revenue must deposit the money on a monthly basis, based on estimates from
the Office of State Planning and Budgeting.
State Revenue
The bill does not change the revenue generated for the Healthy School Meals for All program;
instead, the revenue will be deposited in the newly created Healthy School Meals for All Cash
Fund.
State Transfers
On July 1, 2024, the bill transfers the balance of the Healthy School Meals for All General Fund
Exempt Account to the newly created Healthy School Meals for All Cash Fund. An exact estimate
of the balance is not known at this time.
State Expenditures
In the current FY 2023-24, the bill shifts $15.4 million in expenditures for the Healthy School
Meals for All Program in CDE from the General Fund to the State Education Fund.
In FY 2024-25, the bill decreases net state expenditures in CDE by $17.8 million in FY 2024-25,
including:
an increase of $675,729 from the State Education Fund to continue an existing local food
grant program for one year;
a decrease of $18.5 million from General Fund from delaying grant programs; and
a refinancing of $138.3 million from the General Fund and Healthy School Meals General
Fund Exempt Account to the State Education Fund and newly created Healthy School Meals
Cash Fund.
These impacts are described below in greater detail and summarized in Table 2. Page 4
June 27, 2024 HB 24-1390
Table 2
Expenditures Under HB 24-1390
FY 2023-24 FY 2024-25 FY 2025-26
Department of Education
Staff - Delay HSM Grant/Wage Programs (-1.0 FTE) - ($95,908) -
Staff - Continue Local Food Program (+0.4 FTE) - $25,729 -
Delay HSM Grant/Wage Programs - ($18,400,000) -
Continue Local Food Programs - $650,000 -
Program Audit - ($400,000) -
Technical Assistance Working Group - $400,000 -
Refinance – General Fund ($15,439,107) ($22,146,226) -
Refinance – State Education Fund $15,439,107 $22,216,816 -
Refinance – HSM GF Exempt Account - ($116,200,000) -
Refinance – HSM Cash Fund - $116,129,410 -
Centrally Appropriated Costs
1
($13,126) -
Total Cost $0 ($17,820,179) -
Total FTE - (0.6 FTE) -
1
Centrally appropriated costs are not included in the bill's appropriation.
Department of Education. The bill will modify CDE expenditures, as discussed below.
Delaying grant and wage programs. Delaying the local school food purchasing grant,
technical assistance grant, and wage reimbursement programs reduces costs by
$18.4 million, including $5.0 million for each for the two grant programs and $8.4 million for
the wage programs. Delaying the programs also reduces the staff in CDE by 1.0 FTE in
FY 2024-25 only.
Continuing existing grant programs. Continuing the existing local food grant programs
increases state expenditures by $650,000 in FY 2024-25 only, of which $500,000 is for the
food purchasing grant and $150,000 is for the nonprofit technical assistance grant. In
addition, 0.4 FTE is required to administer the program for an additional year. These
amounts represent continuation of most recent program costs.
Additionally, the changes to the minimum reimbursement amounts do not change overall
funding for the program, but may shift how the funds are allocated among districts.
Program audit. By delaying the audit requirement for two years, the bill reduces costs in
CDE by $400,000 in FY 2024-25 and correspondingly increases costs in FY 2026-27 by the
same amount.
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June 27, 2024 HB 24-1390
Technical assistance working group. CDE will incur costs in FY 2024-25 only to support the
technical assistance working group. Costs are estimated at $400,000, to be used for a
facilitator, support contractor, or temporary staff. Exact uses will be determined as the
working group’s specific needs are determined. The recommendations made by the working
group may impact future costs associated with the Healthy School Meals for All program.
Refinancing. The bill refinances administrative and meal reimbursement costs in FY 2023-24
and in the FY 2024-25 Long Bill for the Healthy School Meals for All Program. In FY 2023-24,
$15.4 million is shifted from the General Fund to the State Education Fund. In FY 2024-25,
$138 million is shifted from the General Fund and Healthy School Meals General Fund
Exempt Account to the State Education Fund and Healthy School Meals Cash Fund.
Legislative Department. The bill increases workload for Legislative Council Staff and Joint
Budget Committee staff to provide technical support to the advisory group. No change in
appropriations 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.
School District
By delaying the Healthy School Meals for All grant and wage programs for a year, the bill
reduces state reimbursements to school districts for local school food purchasing and employee
wages by $13.4 million in FY 2024-25. This may be partially offset for some districts that
participate in the existing local food program that is continued under the bill, estimated at
$500,000. Similarly, technical assistance from a nonprofit via the technical assistance grant
program is reduced in FY 2024-25 only, from $5.0 million via the HSM grant to $150,000 in the
continued program.
The bill also increases workload for school districts to adjust school meal policies to align with
CDE policies on federal meal program participation, ways to maximize federal funding, and
submittal of household income eligibility forms. School districts may also have additional
workload if they choose to engage with the technical assistance working group.
Effective Date
The bill was signed into law by the Governor and took effect on April 29, 2024.
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June 27, 2024 HB 24-1390
State Appropriations
For the current FY 2023-24, the bill requires and includes the following appropriation changes to
the Colorado Department of Education:
a reduction of $15,439,107 from the General Fund; and
an increase of $15,439,107 from the State Education Fund.
For FY 2024-25, the bill requires and includes the following appropriation changes to the
Colorado Department of Education:
a reduction of $116,200,0000 from the Healthy School Meals General Fund Exempt Account;
a reduction of $40,642,134 from the General Fund and 1.0 FTE;
an increase of $22,892,545 from the State Education Fund and 0.4 FTE; and
an increase of $116,129,410 from the Healthy School Meals for All Cash Fund.
State and Local Government Contacts
Education Joint Budget Committee Staff
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 the General Assembly website.