The Boulder Valley School District is set to spend over $550 million on operating expenditures this school year. In lockstep with declining enrollment, fixed costs continue to rise, increasing the cost per student. Boulder spends over $4,000 more per pupil than the state average of $15,000, with some schools allocating over $22,000 per student.
This yearly enrollment decline of 1.5%, combined with a new funding law and a November 2024 ballot measure to cap property taxes — a major revenue source for BVSD — has sparked concerns about the district’s future budget. Although the new funding law may provide additional state aid, this will be offset by declining enrollment unless the district manages to reduce fixed costs. One potential solution is to shut down schools, raising anxiety that this may be in BVSD’s future.
“Uncertainty is not a great place to be,” Bill Sutter, the district’s chief financial officer, said in an interview.
Under the New Public School Finance Formula, passed in May, BVSD is expected to get $600,000 more in state funding in the 2025-26 school year compared to the old formula. This increase is due to a shift in funding toward at-risk students, special needs students and English language learners, as the state seeks to fund schools more equitably by tweaking the factors that determine funding.
However, the new formula is not all good news for the district. A major change is the reduction of the “cost of living” factor, which was prominent in the old formula. High living costs in Boulder and other urban districts previously earned them more state funding. Now, with the cost of living factor at the bottom of the formula’s priorities, its impact on the overall total has diminished.
The budget is already spread thin, and the district has little wiggle room to meet rising costs. The Boulder area inflation rate is 5.2% for the coming year, which should be applied to teacher compensation to cover cost-of-living increases. But the district only allocated 4% toward inflation because, according to Sutter, that’s all it could afford.
A history of underfunding education brings a lack of trust
The New Public School Finance Formula was passed against the wishes of BVSD leadership.
The law adds $500 million in total state education funding over the next five years. Superintendent Rob Anderson strongly opposed the bill, believing it was rushed through and lacking a plan to source all the new revenue. He has said he worries the state will continue taking money away from education to pay for other things, creating even less predictability with all the changes, especially if the property tax measure passes in November. Historically, Colorado’s education budget has been slashed at the last minute when other priorities take precedence.
“There would be such chaos in our state if [House Bill] 1448 and then [Proposition] 50 go through, and all of a sudden you couldn’t predict what amount of money was coming in,” Anderson said in a BVSD board meeting just before the bill passed. “A lot of our rural communities support this because they don’t have two nickels to rub together.”
Since 2020, almost $2 billion has been diverted from the education budget to cover other expenses, with almost $70 million of that taken from BVSD’s expected funds. This practice has its roots in 2009, when the “negative factor” loophole was introduced, allowing the state to pull from the education fund to stabilize the overall budget. Over the years, this has resulted in almost $10 billion in lost education funding.
The negative factor was repealed this year. However, if the state can’t cover the funds needed to meet the new formula, legislators will either have to dip into reserves or bring back the loophole.
Yet another uncertainty BVSD is bracing for comes from Proposition 50. This ballot measure caps statewide property tax increases at 4% each year, a significant reduction compared to recent years. The district is expected to receive about 48 mills, or over $282 million, in property taxes for this school year.
Less local funding means BVSD would have to rely more on the state’s historically insufficient coffers. Under state law, each district’s budget is defined by first accounting for local revenue, with the state covering the remaining amount to meet the required total.
Impact on marginalized students, potential school closures
Some worry students on the margins are most at risk of losing out if the district’s budget is stretched too thin, especially as declining enrollment creates higher per-student costs. Jovita Schiffer, who has worked within BVSD for over a decade and oversees the Sanchez Family Resource & Learning Center at Sanchez International Elementary School in Lafayette, expressed concerns. She highlighted that Sanchez Elementary has a 68% majority of economically disadvantaged students.
“What I do know is that any reduction in funding for BVSD schools could impact children from historically marginalized communities the most because those schools rely fully on district funding, while schools in more affluent neighborhoods might supplement their funding through parent fundraisers and donations,” said Schiffer, who recently lost her bid for state senate to state Rep. Judy Amabile.
Overall, the picture of BVSD’s funding is complex and changing. After the November election, there will be less uncertainty, but declining enrollment will continue to force tough decisions, including potential school closures, according to officials. High housing costs contribute to declining enrollment in some areas. Several schools are in a “low-enrollment advisory phase” — Coal Creek, Community Montessori, Eldorado K-8, Flatirons, Kohl and Mesa — meaning they have fewer than two classes per grade and are operating at less than 60% capacity. Heatherwood Elementary’s enrollment is less than 50%, prompting a community engagement process. A district committee is working on addressing these challenges.
“I wish I could tell you all this is going to be easy,” Anderson said this spring. “But it’s not going to be easy because we’re going to have to make choices. We’re going to have to be honest with folks. We’re going to have to look tough decisions square in the eye, and we’re going to have to make decisions that not everyone is going to like, but that is the world of declining enrollment.”
Why on earth is BVSD spending $47.2 million on a new 76,000 square foot building at New Vista. It is simply a waste of taxpayers money again.
Prop 50 is terrific. We need to cap property tax increases. Our property tax over the last few years has gone up 20+% which is way out of line with inflation. Why should our local government get a 20% bump in budget when inflation is much lower just because property values have increased? Schools need to figure out how to educate kids for less than $22k each. My kids have 30 kids in a class. $100k to the teacher. Where does the other $500k go?
It’s unfortunately not out of line with real inflation. You’d know that if you were in the rental market for sure. 10% yearly hikes in rent are not unusual and will likely be the norm soon, especially with private equity snapping up ever more properties. High housing costs jack up cost of living so everyone who works in a school needs more money just to afford housing near Boulder. Might have something to do with it.
Jenna, thank you for your Lear explanation of the finance formula! Perhaps you could investigate and report on exactly how much the taxpayers are paying for the superintendent’s new 3 year contract amidst this challenging budget for BVSD. Though he did not receive a salary increase (currently at $346,345 per year), I know the cost of buying him a year of PERA is exorbitant …especially if it is for his3 year contract! And, he’ll end up with 12 years, instead on 9 if he fulfills the 3 year contract, costing taxpayers even more over the course of his retirement life. Full transparency would be a breath of fresh air!
Colorado already has one of the lowest property tax rates in the US. We should be raising property taxes to give raises to underpaid teachers & staff, not lowering them or capping them.