DENVER — Colorado schools are set to receive a funding boost next year thanks to a bipartisan bill Governor Jared Polis signed into law on Friday.
The 2025 School Finance Act (House Bill 25-1320) provides an additional $256 million to schools next year and begins the implementation of an updated school funding formula.
“With this bill, Colorado has made good on our promise to fully fund K-12 education and meet students where they are and bolster educational outcomes across our state,” said Polis. “I appreciate the sponsors of this bill for working to increase school funding and turning on the new, student-focused school finance formula in a sustainable way.”
Over the last several years, school districts across Colorado have experienced declining enrollment due to several factors, including declining birth rates and alternative schooling options. Because Colorado funds schools on a per-pupil basis, some districts risked losing a large portion of their funding.
“With declining enrollment, we wanted to ensure that schools are still getting the money that they deserve,” said State Rep. Meghan Lukens, D-Steamboat Springs.
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Lukens, a former teacher who serves as the chair of the Colorado House Education Committee, said in addition to declining enrollment, there was another threat to school funding this year.
“We were facing a billion-dollar shortfall in the state budget,” said Lukens.
But the deep cuts to education that many feared never happened. Lawmakers were able to find other ways to balance the budget.
“Our Joint Budget Committee did a great job of looking at every section of our budget and leaving no stone unturned to see where cuts can be made while ensuring that we are continuing to invest in our K-12 schools,” said Lukens.
On Friday, Polis signed the School Finance Act into law, which includes a provision holding schools harmless for declining enrollment.
“We did not want to have our schools getting less money just because they had declining enrollment,” said Lukens, who was one of the co-sponsors of the legislation. “This School Finance Act is a sign from the state legislature that we are dedicated to funding our schools, dedicated to supporting our students and our educators, and promoting the learning environment overall.”
The Colorado Education Association also celebrated the passage of the bill.
“This session showed what happens when educators stand together,” said Kevin Vick, the president of CEA. “We made it clear to lawmakers that they could not balance the budget on the backs of our students and educators again, and they listened. We protected education funding, increased it, and laid the groundwork to ensure we never go backward again.”
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While the bill was bipartisan, a handful of Republican lawmakers voted against it. State Rep. Ken DeGraaf said the General Assembly has been passing too many regulations, therefore growing school administrative offices.
"I don't buy into the idea that we need more money," said DeGraaf. "I think that we need less administration and more teachers."
The new law also creates the Kids Matter Fund. The state treasurer will be required to transfer 0.00065% of existing state revenue into the account starting on July 1, 2026. Bill sponsors say this will amount to $230 million in the 2026-2027 school year.
The CEA says this fund will also help ensure the Budget Stabilization (BS Factor) never returns. Many blamed the BS Factor for education underfunding in Colorado.
