And this is before the deep cuts started in 2009 . . .

The falling red line on this graph shows how Colorado’s per pupil funding compares to the national average from 1972-2009.  (This is an update of the chart Great Ed has used in presentations for two years).   It shows that, as of 2008-09 (the most recent data available), Colorado spent $1,809 — or almost 18% — less per pupil than the national average, a drop of more than $400 in two years.  This new data shows Colorado falling back down to 40th in per pupil spending, and 49th in the percent of our wealth we commit to K-12 education.

How did we get here?  The downward trend started with the Gallagher Amendment in 1982 and deepened with the passage of TABOR in 1992.  Even with a slight increase following Amendment 23, Colorado continued dropping to new lows relative to the national average.  In 2007, Colorado was $1,397 below the national per pupil funding average.

The bump in 2008 is misleading; it reflects some one-time spending (for example, the state started moving toward fully funding full-day kindergarten), as well as funds that were spent to merge the Denver Public Schools pension system into the state Public Employee Retirement Administration (PERA).   With those one-time dollars out of the equation, Colorado fell to the new low of $1,809 below the national average.

And now, with a bit more detail . . .

In the 1980s, Colorado invested more per student than the national average, even during the energy bust.  In 1982, Colorado voters passed the Gallagher Amendment (the vertical green line on the graph) – which started eroding the local property tax base by continually reducing the assessment rate (the percent of the value of a home that is taxed).   From 1982-1992, school districts were able to somewhat stabilize local revenues by floating mill rates up.

In 1992, the voters passed TABOR (the vertical orange line), which took away the ability of districts to float their mill rates without a vote of the people and limited the state’s ability to backfill the hole left by declining property tax rates (because of a 6% spending limit imposed on spending from the State General Fund).  The result: Colorado’s tangle of restrictive budget laws prevented the legislature from even keeping up with inflation in per pupil funding.

The good news is that in 2000, Colorado voters passed Amendment 23 to plug hemorrhaging P-12 budgets (the vertical purple line).  Estimates indicate that if Colorado did not pass Amendment 23, average spending per student would have dipped down an additional $500-1,000.  At the time it passed, Amendment 23 was intended to be a floor and not a ceiling.

The bad news is that since 2000, the legislature treated Amendment 23 as a ceiling.  More bad news: Amendment 23′s annual mandated per pupil increase of the Consumer Price Index + 1% failed to keep up with the steeper inflation in the kinds of things that school districts buy like health care, pensions, and energy.

And the worst news, not yet reflected in this chart, is that, starting in 2009, the legislature reinterpreted Amendment 23 in a way that allowed deep cuts to schools.  As a result of that reinterpretation, schools are currently being funded at a level $774 million below what the proper interpretation of Amendment 23 requires.

Despite opportunities to intervene, the legislature has not provided leadership or creativity to stop these short-sighted and irresponsible cuts to education.  Only the Bright Colorado Initiative stands between Colorado students and another round of multi-million dollar cuts.

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HOW DID WE GET HERE?

The falling red line on this graph documents how Colorado’s per pupil funding compares to the national average from 1972-2007. With conventional wisdom in and around the Capitol that K-12 funding is “fine” and has been protected – perhaps too protected – by Amendment 23, this graph tells the real story of Colorado’s 30 year history of disinvest- ment. The downward trend started with the Gallagher Amendment in 1982 and continued to decline with the passage of TABOR in 1992. Even with a slight increase following Amendment 23, Colorado continued dropping to new lows relative to the national average. In 2007, Colorado was $1,397 below the national per pupil funding average.

ASK YOUR SCHOOL BOARD MEMBERS AND LEGISLATORS

Even with Amendment 23, Colorado has fallen further and further behind the National Average for per pupil funding ($1,397 below in 2007). With the new interpretation of Amendment 23, schools will likely experience cuts in January 2010 with worse cuts expected in the 2010-11 fiscal year.

1. How would cuts impact kids, the future of our community, and communities across the state? What is your plan to address potential cuts?
2. In 2011, the education funding cliff will really arrive for P-20 schools—the 5 year timeout in Ref. C sunsets, the extra 1% in Amendment 23 expires, and Federal Stimulus dollars will no longer be propping up school, college, and university budgets. With our shrinking investments, how can we continue to meet the individual needs of all Colorado kids and implement important reform efforts to improve our education system for the long term?
3. In your position as [School Board Member or Legislator], what are you going to do to avoid the Cliff?

UPDATE: See also the editorial in the Denver Post 10/11 - Downturn is the right time to invest by Liane Morrison and Lynn Huizing