Colorado advances $194.8 million K-12 funding boost as rural districts warn of eroding gains

Colorado lawmakers plan to add nearly $194.8 million to K-12 funding next year, but districts across the Western Slope warn the gains could be erased by inflation and declining enrollment. In the version of the School Finance Act (Senate Bill 23) passed by the Senate on April 29, per-pupil funding would rise by $440 for the 2026-27 fiscal year, bringing the total to $12,314 per student.

Overall K-12 spending would reach roughly $10.2 billion, including $5.6 billion from the state share — the General Fund, State Education Fund and State Public School Fund — and $4.6 billion from local property and ownership tax revenue. The increase aligns with Colorado’s constitutional requirement to raise base per-pupil funding annually by at least the rate of inflation.

Even with the larger state allocation, falling enrollment in many rural, mountain communities means some districts could still see less money. “We know that whatever increases we’re talking about are going to be very minimal because of declining enrollment,” said Michael Agostinho, president of the Eagle County Education Association and an educator at Eagle Valley High School.

The bill’s fiscal note estimates a $60,000 decrease in total program funding for the Eagle County School District compared to last year. The district’s 2025-26 pupil count fell by roughly 239 students year-over-year, with steeper drops anticipated for 2026-27, and total program funding is expected to be around $79.5 million.

Agostinho said shrinking budgets, rising costs and falling enrollment have led to cuts across the board, including educator and administration positions. “It’s not as great as it seems on paper,” he said.

“There are more things that we need to do locally and also statewide to help fund schools (for) students, and also annual shortfalls that we’ve had for decades in Colorado.” Studies commissioned by the Colorado legislature in 2023 found public schools are underfunded by over $3.5 billion.

For roughly 14 years, the budget stabilization factor — used until 2024 to reduce statutorily required school funding allocations by around $10 billion to balance the state budget — left many schools still trying to recover. The 2026 School Finance Act proposes shifting to a three-year averaging model for student counts, replacing the current four-year averaging.

That change would make recent declines in enrollment weigh more heavily on district allocations. Colorado had roughly 841,862 public school students in 2025-26, with several Western Slope districts reporting year-over-year declines, and the bill’s fiscal note estimates the state will have over 14,000 fewer students next year.

The move to three-year averaging aligns with the plan to phase in a new school finance formula following negotiations led by House Speaker Julie McCluskie, a Dillon Democrat. Of the $500 million annual cost to fully implement the formula, the bill states Colorado would invest 30%, or $150 million, in fiscal year 2026-27.

While the per-pupil increase should cushion some districts, many face rising costs from inflation that could consume much of the additional funding.