HB 25-1274
Fiscal Note
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
HB 25-1274: HEALTHY SCHOOL MEALS FOR ALL PROGRAM
Prime Sponsors:
Rep. Garcia
Sen. Michaelson Jenet
Published for: House Appropriations
Drafting number: LLS 25-0133
Fiscal Analyst:
Elizabeth Ramey, 303-866-3522
elizabeth.ramey@coleg.gov
Version: First Revised Note
Date: April 2, 2025
Fiscal note status: This fiscal note reflects the introduced bill as amended by the House Education and
House Finance Committees, and has been updated to reflect the March 2025 LCS forecast.
Summary Information
Overview. The bill refers two ballot measures to voters at the November 2025 statewide election.
Depending on the outcome of these ballot measures, the bill makes changes to the funding and scope of
the Healthy School Meals for All program.
Types of impacts. The bill is projected to conditionally affect the following areas on an ongoing basis:
State Revenue
State Diversions and Transfers
State Expenditures
TABOR Refunds
School Districts
Appropriations. Conditional upon approval of the ballot measures in the bill, for FY 2025-26, the bill
requires a $64.1 million increase in appropriations to the Department of Education.
Table 1
Conditional State Fiscal Impacts
Type of Impact
Budget Year
FY 2025-26
Out Year
FY 2026-27
State Revenue $51.7 million $105.0 million
State Expenditures $64.1 million $116.9 million
Diverted and Transferred Funds $5.1 million $10.3 million
Change in TABOR Refunds -$17.5 million -$10.3 million
Change in State FTE 0.0 FTE 0.0 FTE
Page 2
April 2, 2025 HB 25-1274
Table 1A
Conditional State Revenue
Fund Source
Budget Year
FY 2025-26
Out Year
FY 2026-27
General Fund $0 $0
Cash Funds (Healthy School Meals for All Cash Fund) $51.7 million $105.0 million
Total Revenue $51.7 million $105.0 million
Table 1B
Conditional State Diversions and Transfers
Fund Source
Budget Year
FY 2025-26
Out Year
FY 2026-27
General Fund -$5.1 million -$10.3 million
Healthy School Meals for All Fund
(via State Education Fund)
$3.9 million $7.9 million
State Affordable Housing Fund $1.2 million $2.4 million
Net Diversions $0 $0
Table 1C
Conditional State Expenditures
Fund Source
Budget Year
FY 2025-26
Out Year
FY 2026-27
General Fund $0 $19,684
Cash Funds (Healthy School Meals for All Cash Fund) $64.1 million $116.9 million
Total Expenditures $64.1 million $116.9 million
Total FTE 0.0 FTE 0.0 FTE
Table 1D
Conditional Change in TABOR Refunds
TABOR Refund Source
Budget Year
FY 2025-26
Out Year
FY 2026-27
TABOR (3)(c) Refund for Exceeding Blue Book Estimate -$12.4 million $0
TABOR (7)(d) Refund for Exceeding State TABOR Limit -$5.1 million -$10.3 million
Net Change in TABOR Refunds -$17.5 million -$10.3 million Page 3
April 2, 2025 HB 25-1274
Summary of Legislation
The bill refers two ballot measures to voters at the November 2025 statewide election.
Depending on the outcomes of the ballot measures, the bill makes different changes to the
Healthy School Meals for All program initially created through Proposition FF, approved by
voters in 2022.
Proposition FF currently requires taxpayers with adjusted gross income of $300,000 or more to
add back a portion of their federal standard or itemized deductions when calculating their
Colorado taxable income.
If at least one of the two measures is approved by voters, the bill extends the local school food
purchasing program, which would otherwise repeal after FY 2025-26, and an associated
reporting requirement.
Retention Measure
The bill refers a measure (“retention measure”) that, if approved, would allow the state to retain
and spend revenue collected in FY 2023-24 in excess of the revenue estimate provided to voters
in the 2022 Blue Book, and continue to require additions to taxable income as originally
authorized in Proposition FF.
If the retention measure is approved, the retained revenue will be spent for the Healthy School
Meals for All program. If the retention measure is not approved, the bill requires that
$12.4 million be refunded to taxpayers in FY 2025-26 using a reasonable method to be
determined by the Department of Revenue.
Expansion Measure
The bill refers a measure (“expansion measure”) that, if approved, would reduce the
Proposition FF add back thresholds from $12,000 to $1,000 for single taxpayers and from
$16,000 to $2,000 for joint taxpayers. If approved, the expansion measure increases Colorado
taxable income and increases income tax revenue. Increased income tax revenue is credited to
the Healthy School Meals for All Cash Fund.
By increasing taxable income, the expansion measure also increases diversions of General Fund
revenue to the State Education Fund and the State Affordable Housing Fund. If the expansion
measure is approved, the bill requires that an amount equal to the increased diversion to the
State Education Fund be transferred to a new account in the Healthy School Meals for All Cash
Fund.
If the expansion measure is approved, the bill includes formulaic allocations of the money
remaining in the Healthy School Meals for All Cash Fund. The exact allocations depend on the
amount remaining in the fund, as calculated by the Legislative Council Staff, after administrative
costs and the payments of reimbursements for school meals. These allocations are shown in
Table 2. If the calculated reserve amount decreases by certain levels specified in the bill, the bill
reduces the allocation of revenue to the next-highest tier shown in Table 2. Page 4
April 2, 2025 HB 25-1274
Table 2
Conditional Allocation of Remaining HSMA Cash Fund Revenue
if Expansion Measure is Approved
Calculated
Reserve
Percentage Money Source
Grants for
Technical
Assistance
Distribution for
Wages or
Stipends
1
Local Food
Purchasing
Grants
1
Less than 10%
Only New
Account
$250,000 6¢/lunch
Any Amount
Remaining
10% to 25% Entire Fund $2,500,000 6¢/lunch 10¢-12.5¢/lunch
25% to 40% Entire Fund $3,750,000 9¢/lunch 16¢-18.75¢/lunch
40% to 50% Entire Fund $5,000,000 12¢/lunch 25¢/lunch
50% or more Entire Fund
Greater than
$5,000,000
Greater than
12¢/lunch
Greater than
25¢/lunch
1
The bill specifies a minimum grant award to individual school food authorities for each tier.
For some small districts, this may result in greater per lunch amounts than shown in this table.
Additionally, if the expansion measure is approved, the bill:
allows school food authorities to contract for or collaboratively create an advisory committee
in order to be eligible for a local school food purchasing grant;
broadens the purposes for which a nonprofit organization may award grants under the local
school food purchasing technical assistance and education grant program; and
for purposes of grants made through the local school food purchasing program, clarifies
how the Department of Education (CDE) must prioritize eligible providers.
Election Outcome Scenarios
If neither the retention measure nor the expansion measure is approved, the bill requires that
the Proposition FF add back thresholds be increased beginning in tax year 2026 to amounts
calculated so that, if they were used in tax years 2023 and 2024, they would have resulted in a
revenue increase equal to the amount of the 2022 Blue Book estimate.
If the retention measure is approved and the expansion measure is not approved, the bill
implements several changes to the Healthy School Meals for All program, including requiring
expenditures of $1 million per year for technical assistance and education grants, and changing
the timing of when lunches are counted to determine eligibility and priority for the local food
purchasing program. Page 5
April 2, 2025 HB 25-1274
Background and Assumptions
Healthy School Meals for All Program
Proposition FF, approved by voters in November 2022, created the Healthy School Meals for All
Program in CDE. It provides reimbursement to participating school food authorities for offering
free meals to all students, funding for school food authorities to increase wages or provide
stipends to school meal employees, and grants for purchasing local food and technical
assistance related to using local products. House Bill 24-1390 delayed implementation of the
local school food purchasing grant program, the technical assistance grant program, and the
employee wage program by one year to FY 2025-26. The program is paid for by a revenue
mechanism created in Proposition FF.
Proposition FF
Under current law enacted in Proposition FF, taxpayers with adjusted gross income of at least
$300,000 are required to add back a portion of their federal standard or itemized deductions
when computing their Colorado taxable income. Deductions over $12,000 ($16,000 if filing
jointly) are required to be added back.
Income tax collected on the deductions required to be added back under Proposition FF is
credited to the Healthy School Meals for All Cash Fund. Subject to annual appropriation, money
in the cash fund is spent for the Healthy School Meals for All program, which provides funding
to school districts to provide free breakfasts and lunches to public school students.
Interaction with House Bill 21-1311
A preexisting law enacted in HB 21-1311 requires taxpayers with adjusted gross income of at
least $400,000 to add back the portion of their federal itemized deductions that exceed $30,000
(single filers) or $60,000 (joint filers). For taxpayers with income between $300,000 and $400,000,
the full amount of income taxes on deductions added back is credited to the cash fund. For
taxpayers with income of at least $400,000, only the portion of income taxes on deductions
added back between $12,000 and $30,000 (single filers) or between $16,000 and $60,000 (joint
filers) is credited to the cash fund.
2022 Blue Book Estimate of Proposition FF Tax Increase
The 2022 Blue Book estimated that Proposition FF would increase taxes by $100.7 million in
FY 2023-24. Under subsection (3)(c) of TABOR, any amount collected over this limit is required
to be refunded to taxpayers, and the tax increase reduced in proportion to the excess, unless
voters approve a measure allowing the state to continue to collect and retain the full amount.
The actual FY 2023-24 collection amount was $112.0 million, or $11.3 million more than
estimated. This amount, plus 10 percent simple interest, is required to be refunded to taxpayers
if a measure to retain the excess does not pass. The collection amount was originally reported at
$127.0 million, or $26.3 million more than estimated; however, this initial amount included an Page 6
April 2, 2025 HB 25-1274
accrual adjustment that overestimated collections during the fall of 2024. The accrual
adjustment was decreased in response to lower-than-expected collections, producing the
$112.0 million total.
Federal Tax Cuts and Jobs Act
Federal deductions were changed in the Tax Cuts and Jobs Act (TCJA) of 2017. Notably, the
federal standard deduction was increased from $6,350 ($12,700 if filing jointly) in 2017 to
$12,000 ($24,000 if filing jointly) in 2018. With inflation, the federal standard deduction is
expected to reach $15,000 ($30,000 if filing jointly) in 2025. Due to the higher standard
deductions, all Colorado taxpayers with incomes over $300,000 are required to make additions
to their taxable income under Proposition FF.
Under current federal law, most changes to deductions in the TCJA will expire after tax year
2025, and the standard deduction is scheduled to fall to about $8,300 ($16,600 if filing jointly)
for tax year 2026. The decrease lowers the share of taxpayers required to make additions under
Proposition FF, the amounts of additions for those who are required to make them, and the
amount of revenue collected for the Healthy School Meals for All Program.
This fiscal note assumes that the TCJA will expire as scheduled in current federal law. Congress is
currently debating legislation to extend some provisions. If federal law is changed, the fiscal
note will be revised accordingly.
State Revenue
If both ballot measures fail, the bill has no impact on state revenue. Conditional on the passage
of one or both measures, the bill increases income taxes collected by increasing the amounts of
federal deductions required to be added back when calculating Colorado taxable income.
Conditional Revenue Impact if Expansion Measure Passes
If the expansion measure passes, regardless of whether the retention measure passes, the bill
increases revenue to the Healthy School Meals for All Cash Fund by an estimated $51.7 million
in FY 2025-26, a half-year impact for tax year 2026 on an accrual accounting basis, by an
estimated $105.0 million in FY 2026-27, and by similar amounts in subsequent years. Revenue is
exempt from TABOR as a voter-approved revenue change.
With voter approval, the bill raises taxes for approximately 194,000 taxpayers with incomes
greater than $300,000 in tax year 2026, including both single and joint filers. The amount of the
increase for a taxpayer depends on the amount of their federal standard or itemized deductions.
Among taxpayers with incomes greater than $300,000 in tax year 2026, the average tax increase
for a single filer is estimated to be about $377, and the average tax increase for a taxpayer filing
jointly is estimated to be about $560. Page 7
April 2, 2025 HB 25-1274
Conditional Revenue Impact if Only the Retention Measure Passes
If the retention measure passes and the expansion measure does not pass, the bill increases
revenue to the Healthy School Meals for All Cash Fund by $4.7 million in FY 2025-26,
$9.6 million in FY 2026-27, and similar amounts in subsequent years. Revenue is exempt from
TABOR as a voter-approved revenue change.
State Diversions and Transfers
If both ballot measures fail, the bill has no impact on state diversions or transfers. Conditional on
the passage of one or both measures, the bill increases Colorado taxable income, which results
in the diversions and transfers described below.
Under current law, income tax revenue equaling a percentage of Colorado taxable income is
diverted from the General Fund to the State Education Fund (one-third of 1 percent of taxable
income) and the State Affordable Housing Fund (one-tenth of 1 percent of taxable income). If
the expansion measure passes, the bill requires that revenue diverted to the State Education
Fund as a result of the expansion measure be transferred to the Healthy School Meals for All
Cash Fund.
Table 1B presents the bill’s conditional impacts on diversions if the expansion measure passes,
regardless of whether the retention measure passes. In FY 2025-26, an estimated $5.1 million is
diverted from the General Fund, of which $3.9 million is deposited in the State Education Fund
and $1.2 million in the State Affordable Housing Fund. If the retention measure passes, but the
expansion measure does not pass, then the diversion impacts will be smaller than shown in
Table 1B.
Revenue diverted to the State Education Fund is exempt from TABOR under a constitutional
provision enacted in Amendment 23. Revenue diverted to the State Affordable Housing Fund is
exempt from TABOR as a voter-approved revenue change under Proposition 123.
State Expenditures
Conditional on approval of the expansion measure, the bill increases Department of Education
expenditures from the Healthy School Meals for All Cash Fund by $64.1 million in FY 2025-26
and $116.9 million in FY 2026-27. If the retention measure passes, and the expansion measure
does not pass, the bill increases expenditures by $17.2 million in FY 2025-26 and by $9.6 million
in FY 2026-27 instead. Conditional on approval of the expansion measure, the bill also increases
Department of Revenue expenditures by about $20,000 in FY 2026-27 only for software updates.
These impacts are shown in Table 3 discussed below. The impact of each of the measures
passing individually is also discussed below.
The bill also requires expenditures for the 2025 statewide election, which are paid from existing
appropriations, and increases workload for Legislative Council Staff. Page 8
April 2, 2025 HB 25-1274
Table 3
Conditional State Expenditures
All Departments
Department
Budget Year
FY 2025-26
Out Year
FY 2026-27
Department of Education $64.1 million $116.9 million
Department of Revenue $0 $19,684
Total Costs $64.1 million $116.9 million
Election Expenditure Impact — Existing Appropriations
This bill includes two referred measures that will appear before voters at the November 2025
general election. While no additional appropriation is required, certain election costs are
incurred by the state when ballot measures are referred. These include reimbursing counties for
certain election costs; publishing the text and title of the measure in newspapers across the
state; and preparing and mailing the ballot information booklet.
Department of Education — Conditional
Conditional on approval of one or both ballot measures, the bill increases expenditures from the
Healthy School Meals for All Cash Fund for the Healthy School Meals for All program. If both
measures pass, $64.1 million is expected to be available for the program in FY 2025-26, from
revenue increases under the expansion measure and the elimination of TABOR (3)(c) refunds
under the retention measure. In FY 2026-27, $116.9 million is expected to be available for the
program.
If the Expansion Measure Passes
If the expansion measure is approved, expenditures in the Healthy School Meals for All Program
may increase by up to $64.1 million in FY 2025-26 and $116.9 million in FY 2026-27, the full
amount of revenue retained and additional funding deposited in the cash fund under the bill. As
shown in Table 1C, additional revenue credited to the cash fund is expected to first be spent in
FY 2025-26, while diverted and transferred money is expected to first be spent in FY 2026-27.
If the expansion measure is approved, the new revenue for the program remaining in the cash
fund after administrative costs and district reimbursements for school meals will be allocated to
the grant and wage programs, according to the tiered formula shown in Table 2.
If Only the Retention Measure Passes
If only the retention measure is approved, expenditures in the Healthy School Meals for All
Program may increase by up to $17.2 million in FY 2025-26 and by up to $9.6 million in
FY 2026-27, the amount of the revenue retention and increase attributable to that measure.
Funding will be allocated as under current law, except that the bill requires that $1 million per
year be spent for technical assistance and education grants. Page 9
April 2, 2025 HB 25-1274
Department of Revenue — Conditional
Conditional on approval of the expansion measure, the bill requires one-time expenditures of
$19,684 in FY 2026-27 to program, test, and update database fields in the Department of
Revenue's GenTax software system. Programming costs are estimated at $13,905, representing
60 hours of contract programming at a rate of $231.75 per hour. Costs for testing at the
department include $3,955 for 113 hours of innovation, strategy, and delivery programming
support at a rate of $35 per hour, and $1,824 for 57 hours of user acceptance testing at a rate of
$32 per hour.
Legislative Department
The bill increases workload for Legislative Council Staff to complete the HSMA Cash Fund
reserve calculation that is specified in the bill. No change in appropriations is required.
TABOR Refunds
The bill conditionally decreases refunds to taxpayers under subsection (3)(c) of TABOR if the
retention measure is approved by voters. The bill conditionally decreases refunds to taxpayers
under subsection (7)(d) of TABOR if either or both of the referred measures in the bill is
approved. The conditional impacts of the bill on TABOR refunds are summarized in Table 1D
and explained below.
TABOR (3)(c) Refunds
Conditional on approval of the retention measure, the bill eliminates the refund obligation for
exceeding the 2022 Blue Book estimate of the tax increase in Proposition FF. The refund
obligation is $12.4 million and is scheduled to be refunded in FY 2025-26.
If the retention measure is not approved, the bill requires that the Department of Revenue
identify a reasonable method to pay refunds to taxpayers in FY 2025-26. In this case, the bill has
no impact on the amount of refunds in FY 2025-26, as the refunds are already required under
current law. Under current law and if the retention measure fails, refunds are expected to affect
the balance of the Healthy School Meals for All Cash Fund, with no impact on the General Fund.
TABOR (7)(d) Refunds
The state incurs a refund obligation when state revenue exceeds the state TABOR limit. Under
current law and the March 2025 LCS forecast, refunds are expected to be required for
FY 2025-26 and FY 2026-27. If either of the referred measures passes, the state will collect more
income tax revenue; however, this revenue is exempt from TABOR as a voter-approved revenue
change. Because the measures each increase taxable income, they increase the amount of
money diverted from the General Fund to the State Education Fund, which is counted as exempt
under Amendment 23, and from the General Fund to the State Affordable Housing Fund, which Page 10
April 2, 2025 HB 25-1274
is counted as exempt under Proposition 123. These increased diversions decrease state revenue
subject to TABOR and thereby decrease the amount of the state TABOR refund obligation.
The amounts shown in Table 1D present the impact on TABOR (7)(d) refunds if the expansion
measure passes, regardless of whether the retention measure passes. If the retention measure
passes and the expansion measure does not pass, the impact on TABOR (7)(d) refunds will be
less than the amounts shown in Table 1D.
TABOR (7)(d) refunds are paid from the General Fund. The decreased General Fund obligation
for TABOR refunds is offset by an equal increase in the General Fund obligation for diversions to
the State Education Fund and the State Affordable Housing Fund if either or both of the referred
measures is approved by voters.
School District
If either or both of the measures pass, participating school districts may receive additional
funding for employee wages and local food purchasing grants. The amounts paid to districts
depend on the outcomes of the ballot measures and the number of meals served. The Summary
of Legislation and State Expenditures sections discuss the bill’s effects on payments to school
districts in additional detail.
Under current law, the state has fully reimbursed school districts for meals served for students. If
either or both of the measures pass, the additional revenue for the program will be available for
the state to continue making meal reimbursements in the future.
Technical Note
Expansion Measure
The ballot question for the expansion measure begins with “[s]hall state taxes be increased by
$95 million[…]” The fiscal note estimates that, if the TCJA expires as scheduled under current
federal law, the retention measure in the bill fails, and the expansion measure passes, the
expansion measure would increase taxes by $105.0 million in FY 2026-27. In this scenario, the
voter authorization may not be sufficient to retain and spend all the revenue collected, which
could require another refund to taxpayers under TABOR (3)(c), or the referral of another
retention measure to authorize the retention and spending of the excess.
Effective Date
The provisions of the bill referring ballot measures to voters takes effect upon signature of the
Governor, or upon becoming law without his signature. The remainder of the bill is conditioned
on voter approval or rejection of the referred measures, and takes effect upon the Governor’s
proclamation of the election results. Page 11
April 2, 2025 HB 25-1274
State Appropriations
Conditional on approval of the expansion measure, the bill requires an appropriation of
$64.1 million from the Healthy School Meals for All Cash Fund to the Department of Education
for FY 2025-26.
State and Local Government Contacts
Education
Personnel
Revenue
Secretary of State
Treasury
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.