School Finance

school_financeWhereas school finance was once fairly straightforward – local districts collected taxes to pay for local schools – funding structures have become quite complex over the last half century as schools have faced demands to increase services and become more accountable. States are playing a greater role than ever in distributing education dollars, often in response to court rulings, to ensure that funding is equitable among all districts and adequate to educate all children to a certain standard. Taxpayers in many states have rebelled as costs of education and other services have risen. This is the situation in Colorado, where measures like the Taxpayer Bill of Rights (TABOR) and the Gallagher Amendment have limited revenues for schools. These limits, in turn, have led to patchworks of provisions designed to keep money flowing to schools and litigation challenging the constitutionality of Colorado’s public school finance system.

The policy brief below is designed to help readers understand the complex nature of school finance in Colorado. Without advocating for a specific position, we focus on explaining how the state’s system evolved in a clear and straightforward way. After the brief was posted in September 2011 a state court ruled that the state’s levels of funding violated the constitutional requirement for a “thorough and uniform” system of public education. The ruling has been appealed to the state supreme court.

School Finance: A Primer (PDF)