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HB25-1320 will drive $256 million more to Colorado’s K-12 public schools for the 2025-2026 school year WESTMINSTER, CO — Governor Jared Polis today signed legislation to implement the new school funding formula and sustainably drive more funding to Colorado’s K-12 public schools.
“It’s a great day for students, teachers and schools in Colorado! The bipartisan 2025 School Finance Act boosts funding by $256 million and turns on the new school finance formula that will drive more resources to the students who need them the most,” said Speaker Julie McCluskie, D-Dillon. “Despite nearly universal declining enrollment, the 2025 School Finance Act ensures that no district drops below the funding amount they received this school year. We’re deeply committed to investing in our K-12 public schools, and this year’s School Finance Act supports rural schools and our most vulnerable students while creating a sustainable pathway to significantly increase school funding.”
“This is the first time since the 1990s that we’ve instituted a new funding formula for our schools,” said Senator Jeff Bridges, D-Arapahoe County. “From boosting per-pupil funding to supporting underserved districts and at-risk students who need a helping hand, this year’s School Finance Act is good for families, teachers, and most importantly, students. It’s a strong investment in Colorado’s kids and public schools and ultimately, a strong investment in Colorado’s future.”
“As a teacher, I know how important adequate funding is to create an environment where students can succeed,” said Rep. Meghan Lukens, D-Steamboat Springs. “The 2025 School Finance Act invests $256 million more in our public schools this year, meaning funding will rise by over $410 per student on average. The law implements the new school funding formula to better support every student in our public schools. Our law drives funding to our K-12 schools equitably and sustainably, so our students can maximize their learning potential.”
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. 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 will drive $256.7 million more to Colorado’s public schools than last school year, bringing the 2025-2026 school funding total to a record $10.035 billion despite Colorado facing a declining student enrollment environment. Also sponsored by Senate Minority Leader Paul Lundeen, R-Monument, 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.
For the 2025-2026 school year, HB25-1320 will:
Provide $83.2 million more for public schools next year than the old school finance formula
Increase average per-pupil funding by $412, bringing the total per-pupil funding to $11,863, and
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 implements 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.
This new law also creates the “Kids Matter Fund” within the State Education Fund. Beginning July 1, 2026, the state treasurer will be required to transfer into the account 0.00065 percent of existing state revenue collected from federal taxable income each year. For the 2026-2027 school year, revenue will amount to an estimated $230 million for schools. The account will be used to protect per pupil funding and funding for programs, including special education.
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.