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DENVER, CO – The House Education Committee today passed the 2025 School Finance Act to implement the new school funding formula and sustainably drive more funding to Colorado’s K-12 public schools.
“This year’s School Finance Act delivers for our K-12 public schools – it drives $256 million more to school districts compared to last year, while creating a sustainable funding model for our schools,” said Speaker Julie McCluskie, D-Dillon. “Under this bill, the vast majority of districts will receive additional funding despite nearly universal declining enrollment, and no district will drop below the amount of funding they received this school year. Our students deserve a school finance formula that focuses on them, and that’s what we’ll deliver.”
“From eliminating the budget stabilization factor to driving more funding than ever before to Colorado’s public schools, we’re committed to investing in public education,” said Rep. Meghan Lukens, D-Steamboat Springs. “As a teacher, I know how important adequate school funding and reducing classroom sizes are to creating an environment where students thrive. This year’s School Finance Act invests $256 million more in Colorado’s public schools than last year and increases funding by $380 on average per student. I’m incredibly proud to sponsor this bill that will increase funding for our public schools and drive funding to the students who need it the most.”
Colorado lawmakers have worked diligently to drive record-breaking funding to Colorado’s K-12 public schools. Since 2019 when voters gave Democrats the trifecta, total funding for schools has increased by over $3 billion while Colorado schools have lost tens of thousands of students in that time, even after accounting for increased student counts from full day kindergarten. Since the 2018-2019 school year, average per pupil funding has increased from $8,123 to $11,852 next year.
The 2025 School Finance Act (HB25-1320) passed committee by a vote of 13-0. This bill would drive $256.7 million more to Colorado’s public schools than last school year, bringing the 2025-26 school funding total to a record $10.35 billion despite Colorado facing a declining student enrollment environment. HB25-1320 acknowledges unique challenges for rural and remote districts, increases education funding to keep up with inflation and prioritizes sustainable funding for years to come.
In last year’s School Finance Act, lawmakers delivered on their promise to pay off the Budget Stabilization Factor. At the same time, HB24-1448 modernized the school funding formula used to determine the total program funding for Colorado’s K-12 public school districts for the first time in 30 years. This legislation created a more student-centered formula designed to drive more resources to rural and underserved districts, as well as students living with a disability, at-risk students and English Language Learners (ELLs).
For the 2025-2026 school year, HB25-1320 will:
Provide $82.5 million more for public schools next year than the old formula and five-year averaging would have.
Increase per pupil funding by $400, bringing the total per pupil funding to $11,852.
Ensure that 157 of 178 districts will see an average 2.9 percent increase in funding, while the remaining 21 districts with significantly declining enrollment are held harmless.
HB25-1320 will implement the new school funding formula at 15-percent per year for six years, and then 10-percent for the final seventh year of implementation, while still maintaining the four-year averaging model for the 2025-26 school year. To help stabilize school funding in a declining enrollment environment, the bill includes a three-year averaging model in 2026-27 if the new funding formula is implemented at 30 percent, otherwise it will remain at four-years.
Given the tight budget conditions, largely driven by increased Medicaid costs, Colorado lawmakers have had to address a $1.2 billion shortfall in the state budget. However, HB25-1320 is designed to give the legislature the flexibility to continue increasing school funding while adapting to changing budget realities. To maintain the financial health of the State Education Fund (SEF), HB25-1320 provides the flexibility to adjust the percentage of the formula implemented each year or the averaging components of the formula to ensure a healthy reserve in the fund’s balance.