April 17, 2026 · Appropriations · 9,417 words · 12 speakers · 184 segments
. Thank you. Thank you. Thank you. Thank you. We're about to start. Are we ready? All right. The Senate Committee on Appropriations will come to order.
Ms. Conagoraja, please call the roll.
Senator Gonzalez. Present.
Kirkmeyer. Here.
Coker. Here.
Liston. Here.
Pelton B. Here.
Mr. Vice Chair. Let's rock and roll.
Madam Chair. Here. Barely. Okay. We have a few bills before us today. We're going to start with Senate Bill 6. Senator Kirkmeyer.
Thank you, Madam Chair. I move Senate Bill 26006, and that's it. I'm not moving the J Amendment. And I will just state that the department added on or the, yeah, the department regulatory agencies, DORA added on a .2 FTE. It's less than $20,000. I think they can do this within existing resources.
Okay. Committee members any questions for the bill sponsors Seeing none Ms Conagraja please poll the committee on the adoption of Senate Bill 6 Senators Gonzalez.
Aye.
Kirkmeyer. Aye.
Kolker. Aye.
Liston. Aye.
Pelton. Aye.
Mr. Vice Chair. Aye.
Madam Chair. Aye. And we're not putting it on the consent calendar because it didn't get out of committee. unanimously. Next up, we have, oh, so that bill passes on a, did I say that already? That bill passes unanimously. Next up, we have Senate Bill 15. And we have our bill sponsor here. We have both of our bill sponsors,
Senator Pelton. Thank you, Madam Chair. I move Senate Bill 26-015 and L-006.
Okay. Okay, that sounds like a proper motion. Are there questions for the bill sponsors? No, but I do have a comment. Okay, Senator Kirkmeyer.
Thank you, Madam Chair, and I appreciate that we don't have a fiscal note in 26-27. I see that there's maybe an anticipated fiscal note in 27-28. I just want to say that I don't know who puts together the fiscal notes for the Department of Corrections, but they put in here that the reason, And I'm understanding the reason to be that there is going to be additional bed capacity needed and that that would be in state prison beds versus private prison reimbursements. And I just want to remind the Department of Corrections that the budget just passed yesterday and through the Senate and we put a almost $6 million placeholder for the Department of Corrections for a supplemental for additional bed capacity. So I just want to put on record that for the Department of Corrections that they should not be expecting to come back in and ask the JBC for more bed capacity in 27-28 with this given what we did with a placeholder for this next fiscal year. So just saying. It's just a note for the Department of Corrections. That's all. Thanks.
Okay. So my understanding here is that L00 L006 is, would you like to tell us about L006? Senator Roberts.
Thank you, Madam Chair. So L006 is removing the mandatory DOC sentence for the crime of commercial sexual activity with a child. Many of these convictions do receive Department of Correction time already because that is allowable under current law. What the original version of the bill sought to do is require that to be a condition of that sentence or of that conviction for that crime. There's a scenario where around 13 of these convictions every year in Colorado receive probation only. And that was part of what the bill was seeking to change. What we're doing with commercial sexual activity of a child, that specific crime in L006, is saying, putting in essentially a legislative declaration, but encouraging the courts to exercise their current discretion to sentence somebody who has been convicted of purchasing sexual activity from a child, somebody under the age of 18, to the Department of Corrections. But if they don then if they only give probation then a condition of that probation shall be serving 364 days in a county jail This mirrors something this legislature has done with the felony DUI statute in which somebody who convicted of a felony DUI which is three or more convictions of DUI, gets probation, but as a condition of probation serves time in the county jail. We have stakeholder this change with counties and county sheriffs. They remain in support of the bill, even though they know that some of the inmate capacity will come to county jails, but they feel it's one serious enough of a crime that they are willing to house these folks and two arrangements across the state can be made between county jails if there are capacity issues.
Okay. Committee members, any objections to L-006? Seeing none, L-006 passed.
Ms. Kanagaraja.
Oh, Senator Gonzalez. Thank you. I do just want to, in addition to the comments that Senator Kirkmeyer put onto the record, and with gratitude to Senator Roberts and Senator Peltonby for bringing forward this policy for our consideration, I do just want to name that there are ongoing conversations that this General Assembly will consider regarding ongoing jail backlog and prison population management and prison capacity issues. And this is recognizing the narrow aspect and focus of this particular policy, but also looking at the capacity needs that the DOC continues to grapple with. This is I appreciate the amendment language. And also, if I'm reading it correctly, and Senator Roberts, if I'm if I'm mistaken, then this please correct me. But it's my understanding that the courts have discretion in current statute today as it is.
Senator Roberts. Thank you, Madam Chair.
Senator Gonzalez.
Yes, that is true. There are, I think, around 100 convictions of commercial sexual activity of a child every year in Colorado, and about 13 fall into the category where they only receive probation. Thank you.
Okay. Ms. Canagraja, please poll the committee on the adoption of Senate Bill 15 as amended by L-006.
Senators Gonzalez. Aye. Kirkmeyer. Aye. Colker. Aye. Liston. Aye. Pelton. Aye. Mr. Vice Chair. Aye. Madam Chair. Aye.
That bill passes unanimously. Mr. Vice Chair.
No.
Yeah, we had one no vote in committee. Okay. All right. Okay. Next up, Senate Bill 78. Senator Kirkmeyer.
Okay. Thank you, Madam Chair. I move Senate Bill 2678 and L006.
Okay. Committee members, any questions? Senator Kirkmeyer.
Madam Chair, not a question. just a info to the committee that L006 removes some of the data requirements which would eliminate the fiscal numbers. So ask for an aye vote.
Okay. Committee members, any objection to L-006? Seeing none, L-006 is adopted. Ms. Conagraja, please poll the committee on the adoption of Senate Bill 78 as amended by L-06. Senators Gonzalez. Aye. Kirkmeyer. Aye. Colker. Aye. Liston. Aye. Hilton. Aye. Mr. Vice Chair. Aye. Madam Chair. Aye. That bill passes unanimously. Mr. Vice Chair, I think this one's a candidate. May I suggest the consent calendar? Any objections? Seeing none, the bill will be on the consent calendar. Next up, we have Senator Wallace and Senate Bill 124. Committee members, any questions for the bill sponsor?
Senator Kirkmeyer. Yes, thank you, Madam Chair. Why is this bill in front of us if there's no appropriation required?
I think it must, oh, well, Senator Wallace. Sorry, you can also take it, Madam Chair.
So we went to committee with a strike below that changed entirely the bill and turned it into just a technical change that's helping with the way that they're building the automatic victim notification system, system and that doesn't have a fiscal but we did not get that revised fiscal note for the committee and so now we are here to show it to you.
Okay and so Senator Kirk Meyer. I'm sorry I was trying to follow that. So you did a strike below to change the automatic victim notice system. Will that require any additional funding in the future though?
Senator Wallace. Thank you, Madam Chair. No. So it is there was one piece of data that they were required to gather through the CBI for that victim notification system that is not very acquirable. And so we are taking that out. And so it shouldn't change. It's changing their process a bit, but shouldn't change. Shouldn't add anything. Shouldn't create further. It's like a one time change in how they're building that.
Thank you. Yes, ma'am.
Senator Pelton. Thank you, Madam Chair. It does say, though, that the workload will increase for local government agencies that are participating in the system. So what is the workload that increases?
Senator Wallace.
For local government agencies, I'm not sure because the communication is through judicial and CBI. Perhaps it's in terms of what they will have. It's taking out one particular part, so I'm not sure why it's increasing for local governments other than maybe they have to participate in that, the victim automated notification system perpetually, but that has already been authorized. This isn't creating that system. It's just changing one part of data that they have to go gather.
Okay. Any further questions? Okay. Okay. Mr. Vice-Chair, can you move the bill?
Oh, that is indeed usually the first step. Thank you, Madam Chair. I move Senate Bill 26-124. There is no J.
Okay. Ms. Canagraja, please poll the committee on the adoption of Senate Bill 124.
Senators Gonzalez. Aye. Kirkmeyer. Aye. Colker. Aye. Liston. Aye.
Pelton Aye Mr Vice Aye Madam Chair AYE THAT bill passes unanimously Next up we have Senate Bill 135 No consent on that one. And Senator Bridges.
Thank you, Madam Chair. I move Senate Bill 135 and L006 and L008.
Okay. Committee members, any questions about the bill? Oh, yes.
Senator Kirkmeyer. Yes, I think it would be very helpful if, since it looks like pretty much you did a strike flow, or you made a bunch of changes, maybe not a strike flow, but you made a bunch of changes. So if we could explain L006 and L008, that would be great, and then I'm sure I'm going to have questions on those.
Senator Bridges. Sure. Thank you, Madam Chair. So eight is specifically in regard to the reporting requirements, just making sure that we are getting data back from local education providers on how dollars are being used. And then six does a – sorry, eight does a number of things. The number one most important thing that eight does is that it dramatically increases the dollars under this that would be going to K-12 public education should, and again, this is the real caveat here, should the economy continue to perform the way that it has the last few years. In the case of a recession, same as in the introduced bill, there is no positive factor. There is no increase in what it is that we provide to schools because there are no dollars above the current Ref C rationing limit. So what this says is instead of the original bills, $200 million a year, sort of every year for 10 years, and then that drops off, what this says is it's 2% every year. First, it's calculated on state share of total program, 2%, and then it's additive. So it's 2%, and then you increase it an additional 2%, and then an additional 2%, so that by the end of 10 years, what you actually have is about $1.3 billion that will be going to K-12 public schools every year. So the total amount over that 10-year period is in the $7 billion range. And again, this is assuming that the economy continues apace and that we are in a position where we have a revenue above that original REFC rationing limit. And so at that 10-year period, that $1.3 billion would be ongoing. That positive factor continues on forever. So that is primarily what L008 does.
Senator Kirkmeyer. I noticed in here that you're creating a tracking mechanism where in years where we don't have the full K-12 amount, we would pay it back in future years. Yep. Am I reading that correctly? And then how would that actually work in practice?
Senator Bridges. Sure. Thank you, Matt. Or Senator Kipp. Sure. Thank you, Madam Chair. The way that works is in the same way that we would track the negative factor in years where we didn't fund schools according to what I consider to be the Amendment 23 requirements. But the Supreme Court, in their wisdom, allowed the legislature to create a negative factor. Essentially, we would be tracking a negative factor on the positive factor. So we would say that the people of Colorado voted to increase school funding by 2% every year for 10 years. and in years where we don't have revenue above the REFC cap, which you and I are on the budget committee we know the predictions that we have heard from OLS from LCS on the likelihood of a recession at some point in the next few years if not much sooner than that This essentially says we're still tracking that 2% increase year over year. You know, that one point, roughly $1.3 billion at the end of this that would be increased in K-12 funding is still the purpose of the goal of the legislature. And should the economy recover and go back over that REFC rationing limit, the first dollars that would go back would be whatever that amount is that is owed to schools from this – should this measure pass. So, for instance, let's say in year three, the total dollar amount for schools – and this is just – I'm keeping it really rough just for simplicity – is $250 million, right? If the economy crashes in two years and we simply don't have the revenue that we would need in year three to fulfill that total amount, it's not like that just goes away and we don't owe schools anything. The people of Colorado will have said we want funding for K-12 to increase. We recognize that. When the economy comes back, the measure continues apace. So what we would owe to schools is still that 2% plus 2% plus 2% plus 2%. So when we come back, the first dollars, once the senior property homestead tax exemption has been paid for, go back into K-12. So it can't be used by the legislature for anything but K-12 funding until the entire amount that is owed to schools is paid.
Senator Kirkmeyer. Thank you. So what kind of insurance do you have that we don't just reduce the state share? These additional funds come in to just like when there's additional funds from the obligation of the school districts and we have the offset. So we just have been lowering our offset basically amount. So what guarantee is in this referred measure that we don't just basically relieve the states and relieve the state of its share and reduce it and reduce that obligation?
Senator Bridges. Thank you, Madam Chair. That would be a violation of the measure. The measure says, should we increase school funding by 2% every year? Should we increase state funding by 2% every year? So if the state all of a sudden is now just not going to spend money on schools the way that it was before, that's a violation of what it is that we sent to the voters, and I believe would trigger a lawsuit that I think would be right to go back and say, well you violated the terms of this measure. The people of Colorado said that yes, you can pay for this using that increase to the rationing limit in Tabor. And if you don't do that, if you don't put that first 2% additive towards public schools, you violated this measure and you don't get to have that increase in the cap.
So Senator Kirkmeyer. Thanks. So can you point to me where in the bill that you have here that it specifically states that we can't reduce the state share or basically relieve the offset.
Yeah. Yeah. Senator, thank you. Thank you, Madam Chair. That language is not in there because – I'm just going to finish up. Sure. If I may, because Amendment 23 said pretty much the same thing, that we were supposed to increase our funding by inflation, and then lo and behold, we came up with a BAS factor and a negative factor, and we didn't do that. And for the last couple of years, last few years, in fact, that I know of,
we have been reducing the state share offset. And so I would like to know where exactly because we telling the voters we going to increase funding to education And I want to make sure that that actually going to happen if you say it going to happen So if we going to increase the at the end of 10 years there be a billion increase annually I want to know where that's going to for sure happen. That's why I asked you in practice how that was going to work.
Senator Bridges. Thank you, Madam Chair. I think it's in the plain language of the referred measure, but if you'd like to, if you have suggestions on an amendment to include that in the bill itself, I'm happy to do that. I would consider that comfort language, right? But we do that all the time here in the legislature. You say, I want to make sure your bill does the thing that your bill does. The bill already does that, in my opinion. And so I'm happy to add some legislation in saying exactly that.
Senator Kirkmeyer. Yeah, I don't have an amendment for your bill because I don't like your bill. So I wanted to know where in your bill that it says that.
It's the plain language.
Sorry, Madam Chair.
Where is that at?
Senator Bridges. Thank you. You can even give me the citation of law that you think that's appropriate to, because then I'm going to go back and wonder why the heck the BS factor ever got approved.
Thank you, Madam Chair.
My understanding, and we can bring lawyers up on this if you'd like, is the way that the legislature navigated around the requirements in Amendment 23 is that they said the Amendment 23 requirements applied only to base per pupil, and base per pupil still increased by inflation every year. It was all sorts of other things they said weren't actually covered by Amendment 23. I think the plain language of this bill makes it very clear that we are, by exempting, by setting the rationing limit in TABOR 2, categoricals plus state share plus that 2%, that we are making it very clear that save the sort of natural increase and decrease we have in what local share brings in, in the natural increase and decrease in what we have from the state ed fund, that there is an obligation that the state not retreat from what it is that it is currently putting towards K-12 public education. These are additive dollars. And should the state fail to live up to its obligations under this, then I think that that very clearly violates the language of the referred measure.
I have a question. You're saying the first thing that gets paid out of the surplus, above the TABOR cap, is the homestead exemption. How does this measure interact with the family affordability tax measure?
Senator Bridges. Thank you, Madam Chair. The Family Affordability Tax Credit and the sort of state's version of EITC are both based on revenue. They are not based on the Tabor rationing limit. So any adjustment to that limit does not impact the triggers in FATC and EITC.
But would have to come out of general fund if there wasn't enough Tabor surplus.
Senator Bridges. Thank you, Madam Chair. they function exactly the same way that they do right now. They turn on or off based on revenue, not based on whether it's coming from dollars below the Tabor rationing limit or above the Tabor rationing limit. Should this measure pass, the Tabor rationing limit would mean that almost, I think almost if not all of the tax credits that we currently provide would be underneath that Tabor rationing limit. And I think that is up to future legislatures how they deal with those tax credits. But they are essentially all still general fund, whether they are above the rationing limit or not. It is dollars that have come into the state that we are giving back in the form of tax credits. Rather, it is dollars that we are choosing not to collect instead of bringing them into the general fund. It would all function exactly the same way.
Senator Kirkmeyer. That's not exactly correct. It's a refundable tax credit. So it's not only a tax credit, but we're also giving a refund, which in this current fiscal year or next fiscal year is going to be coming out of the general fund because we're under the cap. Or whatever year we're under the cap, it's coming out of general fund.
I mean, you're right. It's all general fund. But we are now – because we're not over the cap, we're not reducing the taper surplus because we don't have it, it ends up being straight general fund. And this year for FACI, it's like $850 million.
Yeah, the refundable part of that tax credit.
Senator Bridges. The refundable part of that tax credit, when it is turned on in our current fiscal situation, is dollars that are above the current Ref C rationing limit. That's where those dollars are coming from. They are not – which I agree, everything we bring in, whether it is above the Ref C rationing limit or below that Ref C rationing limit, all of those dollars are general fund dollars. There's just a certain number, a certain dollar amount above which those funds are returned. And so what we have is a bunch of tax – so you sort of like – I'm going to use my arms again. This is always dangerous when I do this. You have the revenue that we bring in. You have all of the tax credits that we send out. You have the Ref C rationing limit. and the gap between the ref c rationing limit and the tax credits that we send out that's where taber refund dollars live and the first the first refund in those dollars is to senior property homestead tax exemption the chair mentioned senior property homestead tax exemption we are preserving current practice and saying that the first dollars above the historic ref c rationing limit in this in this case even should this measure pass go towards that senior property homestead tax exemption and then any additional dollars go directly to k-12 public
education according to that 2% per year increase okay any further questions for
the bill sponsor senator Pelton thank you thank you madam chair can you point to me senator bridges in the bill where you are making sure that you're protecting and then you're ensuring the senior homestead is protection is protected in this bill do you actually spell out the senior homestead exemption to be in the bill because I've been sitting over here trying to look for that yes because I haven't seen where it says senior homestead exemption I we
We have an eager looking bill drafter. We do. We have a very eager looking bill drafter. Mr. Lively.
Thank you, Madam Chair. Pierce Lively, Office of Legislative Legal Services. Senator Pelton, that change was actually made in the previous committee, which is why you're not – I don't know which version of the bill you're looking at.
I get the pre-amended. Okay.
So it won't show up in the introduced, but in the pre-amended, let me pull that up and I give you the page and line numbers The way that these are accounted for is in the portion of the bill that establishes the account where the excess state revenues go in So in the pre version of the bill that's page 8, lines 13 through 20, specifically the double underlined text on lines 16 through 19. And what that text is saying is it's saying that when money goes into this account to be sent out for schools and other things, the money necessary to reimburse the local governments, those are the warrants in 39.32074, that money does not go into the account, which means that that money stays in the general fund, and under current law, the homestead exemption needs to be paid out of the general fund. So it is ensuring that that money remains in the general fund and is not first spent for some other purpose, according to this bill.
Okay. Thank you very much. And then one other question, Mr.
Senator Peltin. Senator Bridges kept pointing towards the plain language of the text. I've heard that before. I'm going to guess the plain language of the ballot measure is what he's speaking to. And so I've heard that language before when HH, HH was really confusing to folks. I just want to make sure it's not confusing to the folks. so can you point that to me as well
Mr. Lively Thank you Madam Chair I wouldn't want to speak for Senator Bridges but I believe by the plain language in the ballot title he's pointing to the language that's at the very end of the bill since this is a referred measure Senator Pelton is there a particular question
you have about that language I'm just making sure that that was at the correct spot so thank you
Senator Bridges Thank you Madam Chair Yes, the plain language of the measure that is referred to voters. Very last page of anything you're looking at would be right there.
Thank you. Senator Kirkmeyer.
Thank you. Since we have Mr. Lively at the table, may I ask him questions?
Yes. Great.
So can you explain how this bill would work if there is no Tabor surplus?
Mr. Lively. Thank you, Madam Chair. So if we do not have revenue coming in above essentially the ref C limit, this bill would not require the state to expend any money. However, this state would, as Senator Bridges was outlining earlier, keep track of the fact that the state is not expending money for the positive factor. That's that term, the deferred positive factor amount. So there would be an accounting, and unlike the negative factor, that kind of compounds over time. So in order to pay that off, it's not just that you pay off the amount you conceivably missed in the last year. It would be the amounts you missed in every year. So if we had an extended recession or other situation that caused us not to be above the ref C limit, that owed amount would continue to grow and then would need to be paid off in future years.
Senator Kirkmeyer. And so is there any mechanism exactly how that would be paid off, or is that going to have to be something that's done in statute and it's determined that it's paid off like a certain percentage or a certain amount?
Mr. Lively. Thank you, Madam Chair. Senator Kirkmeyer, the deferred positive factor amount is part of the computation of what needs to be paid out to schools in the year where we have sufficient revenue. So when we have sufficient revenue, the amounts that need to be paid out to schools are not just the amount that's determined independently for that year, but it also looks back and says, well, have we missed any previous payments? If so, the total of those missed payments need to be added to the amount we paid off until we pay them off. So it would be that let say we had million of missed payments We had million of excess revenue after doing Homestead We would pay off that million of missed payments and then use whatever we needed to use to cover the amount we were otherwise required to pay out that year.
Senator Kirkmeyer. And if we don't have enough excess in the next year to pay off what was not included in the positive factor in the previous year, what happens then?
Mr. Lively. Thank you, Madam Chair. It continues to stay on the books. So the way that to take a step back and I think maybe give a more complete answer to that question, the positive factor grows for 10 years by 2% compounding and then stops growing. It's not that the – like it still needs to be paid, but the amount stops growing. But that accounting for previous missed payments stays forever. So if we were somehow theoretically in a situation at the end of 10 years where we were missing those payments, we would still need to continue to make those missed payments. So that obligation does not – as the bill is currently drafted, does not ever go away.
Okay. Senator Liston and then Senator Kirkmeyer. Go ahead.
Or Senator Kirkmeyer. Well, I think why we still have you here. So then can you, thank you, Mr. Lively. Can you then point to me or explain to me how we are, where in this bill that it specifically states or specifically is, I guess, not implied, but specific that we are not allowed to reduce the state share?
Mr. Lively. Thank you, Madam Chair. Senator Kirkmeyer, the bill does not explicitly state anywhere that the state share cannot be reduced. The bill creates a funding mechanism to put additional money on top of the school finance factor and so would not be supplementing or supplanting this, or it would be supplementing and not supplanting, excuse me, the state share. So if the state were to choose to reduce the state share, we would still have the same obligation as under current law. So I'm not – the bill does not explicitly address that, to Senator Bridges' point. The ballot question could be read to prevent that, but the bill itself does not explicitly state the General Assembly shall not reduce the state share or something similar.
Senator Kirkmeyer. Thank you, Madam Chair. And there isn't any language in here about supplanting or supplementing. I mean, there is supplementing, but it's not supplanting.
Mr. Lively. Thank you, Madam Chair.
No, but I would say that that's because of how this positive factor amount is set up, which is that it comes on top of the school finance formula, that it doesn't contribute to the determination of state share in the school finance formula. So it functions that way, but that exact phrase is not used.
Senator Bridges.
Thank you, Madam Chair. And again, if this is an amendment you would like to work on, I'm happy to work on it, but it seems like you don't want to do any amendments to this. But that being said, it is – my understanding is that the way that we pay for state share, and having worked on education policy for 10 years, been on the budget committee for four, having run the School Finance Act, and you have done the same. i know you are as familiar with this as i am that what the way that the state pays for its portion of the school finance formula does fluctuate between state ed fund general fund dollars it fluctuates based on student count there is a way to to write this into the bill i i happy to work on that but my read of the plain language is that these are dollars that are additional on what it is that we are investing in K-12 public education. They do not replace dollars that we are currently investing in K-12 public education.
Senator Liston.
Thank you, Madam Chair. Mr. Lively, I'm curious, do any other states have comparable type of legislation that will require a certain increase of 2% or 3% or whatever it may be? Is this modeled on what other states, or is Colorado the first state that's doing something like this?
Mr. Lively.
Or maybe to the sponsor.
I'll take that.
Senator Bridges.
Thank you, Madam Chair. This is really more modeled on Amendment 23's required increases. This is, you know, other states don't have TABOR. We are the only state in the entire country that has a REFC rationing limit in law. And we, for many years, have, I think, underinvested in K-12 public education in a way that is also fairly unique in the country. And I think that the folks of Colorado want to make sure that we are investing more in K-12 public education. And this gives us a way to do it without increasing taxes. And again, should the economy dip, right, like it almost certainly will, we all know about business cycles. We all know about, you know, what it is that the economy just naturally does. The last time we were in a situation where we were bumped up against this ref-C rationing limit, it wasn't the ref-C rationing limit at that point, Republican Governor Bill Owens was the strongest proponent for that ref-C change. It was intended to be a five-year timeout where the economy, the limit would just grow with the economy, and then all of a sudden in year three, I believe, the economy crashed, which that's just a thing that happens in the economy that we don't have any control over. So what this bill says is that when the economy does well, that K-12 public education should benefit. We should be scaling our investments in education for the students in this state with our economy. When our economy grows, their funding should grow too. That's all this bill says.
Senator Kirkmeyer.
Thank you, Madam Chair. So Mr. Lively, since you're still at the table, thank you. Could you explain how this bill, if this referendum were to pass, how it would interact with both the FATC and the EITC?
Mr. Lively.
Thank you, Madam Chair. Senator Kirkmeyer, I don't know if you have the introduced or the preamended version.
I have the preamended version. Thank you.
So in the pre-amended version of the bill, let me pull that up so I can give you the exact page and line numbers here. So you can see this at the end of the bill, specifically the top of, well, I guess pretty much all of page 13, because as you pointed out, you have these two respective credits. And so the way that the amount of those two credits and ultimately their availability is determined, is by determining the amount or projecting the amount of non-exempt revenue that the state is going to bring in and seeing how that amount of revenue compares to a certain percentage. I don't remember what it is off the top of my head for those two credits, but it's basically saying if there's projected to be enough growth, these credits are on. The more growth, the more that they're on, if you will. And so what this bill amends those credits to say is that the changes that we are making as a voter approved revenue change in this bill would not impact the calculation of those credits. So the amount of the determination of non-exempt revenue that is used for the calculation would remain functionally the same. So these credits could still turn on or off based on a good or bad year, even though it is extremely unlikely that for the first few years, if this were to pass that the state would be over the new spending limit.
Senator Kirkmeyer.
And then so effectively, though, is there going to be more than one cap? So we have the regular Tabor, then we have the Ref. C-Cap. Is this going to be an additional whatever this ends up being another cap? Is that what happens? And so essentially we are increasing the amount of tax revenue that can be kept by the state of Colorado.
Mr. Lively.
Thank you, Madam Chair. Senator Kirkmyle, I'll answer the second part of the question first and then the first part. So to the second point, yes, this bill is increasing the amount of revenue that the state can retain and spend. Since revenue is fungible, it might not all be tax revenue necessarily, but like, yes, the state is functionally able to retain and spend more revenue. Whether this is creating another cap, I mean, I think technically, I mean, whether it's a cap or not is kind of a metaphor, really. I mean, what the bill is allowing the state to do is retain and spend additional money. So you can visualize that as being, and I believe the fiscal note shows this, an additional line above the ref C limit. That's not how it's described in law because that's not how these things are generally described in law, because technically what this is doing is just allowing the state to retain and spend more money. But, yes, you can think of it as a higher cap.
Senator Bridges.
Thank you, Madam Chair. And just to build on that, right, what we have in general fund is not just tax revenue. General fund is there's fees that go into that, and we have fought over the last four years to make sure that fees are reflective of costs, that folks like the Secretary of State, that folks like CDPHE are increasing the fees that they charge to make sure that those fees are what cover the costs for the work that is being done. As we do that, and part of why the governor's office pushed back against us raising fees is that any increase in fees when we were up against that ref C limit simply results in fewer dollars that are available for other work in the budget. It's just increasing those fees on folks who are paying those fees just pushes more revenue out above that ref C limit. It doesn't actually free up any other additional dollars that we can invest in things like K-12 public education, like public safety, public lands. So what this would do is essentially allow us to not have those concerns as we are adjusting fees because fees do come in under this. So it's not just tax revenue, which, again, would still be subject to all the rules and restrictions in TABR. We would not be able to randomly increase taxes. This does not touch any other part of the various different constitutional requirements and restrictions that we have. This is simply about doing essentially the same thing that Governor Owens did with Ref C, by just raising that rationing limit to include what it is that we invest in K-12 public education.
Senator Kirkmeyer.
So how much are we raising above that line, the additional line? How much would it be? How much could it go to? Is it is that that approximately five billion dollars?
Senator Bridges Thank you Madam Chair On page five of the fiscal note in that first paragraph where that just underneath that chart it does show that the state is estimated to retain and spend up to $4.8 billion. Now, that is not revenue that will come in, right? I want to be really clear that that doesn't all of a sudden increase what it is that the state is bringing in. This is not in any way a tax increase. This is simply a raise in that rationing limit that is contained in Ref C. So it's not like there's $4.5 billion that the state could just go on a spending spree with. That's not how this works. And, in fact, in that first year, through what is in this bill, My current the current economic predictions that we have would say that, in fact, we will be putting all of what it is we predict to have above that rationing limit towards K-12. And so this is this is not like all of a sudden there's a bunch of money for the legislature to spend. This is just simply increasing the dollars that we are able to invest in K-12.
I'm going to go to Senator Kolker, and then I'm going to suggest that we move to a vote at some point in the near future. Okay, I have about three more questions. Okay. All right. Senator Kolker.
Hi. I just wanted to make sure. I know there's a lot of stakeholders that you've been working with. Do you know if this amendment satisfies their concerns, case in particular?
Senator Bridges.
Thank you, Madam Chair. Our understanding in conversation with CASE is that they haven't had a chance to officially move a position or reconsider a position, but this amendment was drafted in close consultation with and really in partnership with folks from CASE. So my assumption is it moves them in a very positive direction, but, you know, they have internal processes.
Senator Kirk Meyer and then Senator Pelton.
Thank you. So essentially we're raising the cap by $4.8 billion. Did you calculate when you think the next time is there would be a taper surplus?
Senator Bridges.
Thank you, Madam Chair. Should the economy continue apace, the prediction is in roughly 10 years we will have hit that rationing limit.
Okay. And then Senator Kirkmeyer.
Thank you. And then I'm looking. The same time as the – sorry to follow up. The same time that we have that 2% increase in education funding.
Okay.
Senator Kirkmeyer. Thank you. And then, so I'm looking at the fiscal note on page two. It says the out year general fund would get $212 million. Excess revenues account in general fund, approximately $900 million. So is that, is it the $212 million that goes to the schools? and the $900 million would go to an excess revenue account.
I mean, can you explain that to me, please?
Senator Bridges. Thank you, Madam Chair. Are you on page 6?
I'm on page 2, table 1A. Should I be on page 6?
Page 2. I mean, you know, we just got this huge amendment yesterday, so.
Yep. Yep.
So, oh, so school finance would get 203, property tax reimbursements, $212 million, and other state expenditures, basically $700 million.
So I'm assuming then, should I assume then, but I know it not always good to assume school finance that because of this bill the positive factor million would be distributed to 178 school districts And then the property tax reimbursements is the homestead exemption at million approximately And then there's approximately about $700 million that goes to other state expenditures.
Correct?
Senator Bridges. Thank you, Madam Chair. I believe so, but I'd want to talk with the fiscal analysts first on that.
Okay. Okay. Senator Pelton.
Thank you, Madam Chair. Senator Bridges, my question is going to be back to the language on page 13. So it says in here that, and we can both agree that we are a local control state. We have school boards that control the school districts. And it talks about, shall the state invest K-12 public education increase 2% each year for the next 10 years with investments used to increase teachers' pay, improvement, teacher retention, lower class size, and increase access to career and technical courses without raising taxes. But then on the next one, you talk about how there will be an independent audit to show how the investments are spent. One of the biggest complaints that I get from my school boards is that the state has too much influence in the local school districts. Don't you think this is going to invite that exact same thing that says, hey, Marino, you're not paying your teachers enough. Now we're going to send this down on you, kind of like what Wisconsin does. Same thing. So, I mean, don't you think that's going to be a big issue with some of these local school districts and how the state overreaches into the local control?
Senator Bridges.
Sure. Thank you, Madam Chair. I mean, Colorado has some of the lowest paid teachers in the entire country. We have one of the highest turnover rates of teachers in the entire country. These are two major challenges that are driven in large part by our failure to adequately fund public education here in this state. This will be up to the voters. And if voters in the state of Colorado decide that they would rather not invest more dollars in these particular parts of public education, that is up to the people of Colorado. I think that the people in Colorado want to see the highest rate of teacher turnover in the country reduced. I think they want to see the lowest paid teachers in the country paid more. And so, yes, this is directing those school districts to use those dollars for those purposes. I will also say that the reason we are allowed to direct the spending of these dollars is because it is on top of the formula. It is not in the formula. Once state dollars are mixed with local dollars, as they are in the traditional school finance formula, the state loses its ability to direct how those dollars are spent. That becomes local control. These dollars, because this is a positive factor on top of the school funding formula, the state has the legal right to direct how those dollars are used. And districts, from the conversations I've had, would appreciate the ability to pay their teachers more, reduce turnover, and invest in workforce development programs.
Senator Pelton.
Thank you. I just have a follow-up. Those individual districts also are controlled by the voters of those individual areas. So if they're voting for somebody to be fiscally conservative on that school board, they have every right to say how much those teachers are being paid. The state should not have any say on how much the teachers are being paid That is all up to the local school boards So that the way it should stay But to put more influence from the state onto those local school boards forcing that issue that would make a really big problem with local governments and local control. We've seen that for the last eight years under this current administration with local governments. So that's why I'm saying I have a big issue with this part of it because that's really none of the state's business what the local governments or local school districts are doing.
Senator Kipp.
Thank you, Senator Pelton. You know, as a former school board member, and I agree with what you're saying, that people in Colorado are – we are a very local control state, and districts want to have control over what they do. But I will also tell you that I don't know of a single school board in Colorado that doesn't want to be able to attract and retain teachers. We have a teacher shortage. We have continued to have a teacher shortage. And unless we take steps to make sure that we can properly pay teachers, we're going to continue to have a teacher shortage. THE AVERAGE DISTRICT SPENDS ABOUT 85% OF THEIR, WHAT THEY GET, ALL OF THEIR MONEY IN PAYING STAFF. EDUCATION IS A PEOPLE BUSINESS. I DO NOT BELIEVE THAT OUR DISTRICTS WILL FEEL THAT THIS IS A CONSTRAINT, AND RATHER I FEEL THAT THEY WOULD RATHER HAVE THE ADDITIONAL DOLLARS SO THAT THEY CAN MORE APPROPRIATELY PAY. I mean, when we're like 49 out of 50 states in how we pay teachers, this is one of the reasons we're having trouble attracting and retaining teachers. Can I just say one more thing?
Sure. Senator Pelton.
Thank you. Again, I'm not saying that the school districts are not wanting to pay their teachers more. I'm just saying it's none of the state's business on how much those individual districts pay their teachers.
Senator Kirkmeyer. Oh, I'm sorry. Senator Kip.
I'm right there with you. So, yeah, and I understand what you are saying. However, what we, there's always been this tension, right, between the state and the local government. And when the state gives more money to the local districts to expend upon public education, they do intend to have a little bit more control. And we do have to do what the voters say. And what the voters in Colorado tend to want is to know that this money isn't going – I mean, I've been out there circulating petitions to get more funding for education. People want to know how their dollars are going to be spent. They want to know that they're not going to superintendent salaries. They want to know that they're going to their educators in their classroom.
Senator Bridges.
Thank you, Madam Chair. And just to follow up on that, we do also have a constitutional obligation to ensure a thorough and uniform system of public education here in the state. I think the mill levy overrides that we have in various districts take a pretty big whack at that already. There is nothing in here that dictates how a district chooses what they will invest in between teacher pay, turnover, class size, and career and technical courses. That is entirely up to the local districts. And to be totally frank, I have never met a district that thinks that they don't have a teacher turnover problem here in Colorado. We lose more than half of all teachers that come into the profession in the first five years in the state. That is a huge challenge. That is a statewide challenge that we need to do more to address. And again, it is up to the local district how it is. invest these dollars among those four options. And the people of Colorado generally don't want to write blank checks to school districts or really to anyone. So this is ensuring that those dollars will be used for those purposes. There is the audit to ensure that they have been used for those purposes.
Okay. I think this is going to be the last question. Great. Senator Kirkmeyer. Great.
So back to the teacher pay issue and everything else. I didn't see anywhere in here, and I don't know if you have it, how much each school district would receive of the 200, you know, there's 178 school districts, $203.6 million going to school finance in 27-28 for the positive factor. I'd like to know how much each school district is going to receive. I don't know if you have that chart here, but if not, I'm asking LCS to prepare that data now. And then I also want to know why not only teacher pay? We, you know, we were in, you know, had a bunch of teachers come down to the Capitol on several days and informed us all how we should be voting for this referred measure because it was going to increase their pay. But there's nothing in here that says shall increase teacher pay. It just says should be used for, shall invest in, increase to teacher pay. It doesn't mean they have to. And if you're a small rural school and you're only getting, I don't know, $100,000 or maybe something less out of the $203.6 million, I don't know how much you're going to be able to increase teacher pay. But why not? Why not put in here? I mean, if you told all those teachers that they were going to get an increased pay with this referred measure why not put in here that it only can be used for teacher pay or that it must be used for teacher pay first before you put it into things like lowering class sizes which could be everything for the most part in education or increasing access to career and technical courses Why not? Why not do that? I mean, I think that was pretty, I'm telling you, it really kind of ticked me off because it was pretty disingenuous because they're all like, well, this is going to increase our pay. There's nothing in here that guarantees it's going to increase teacher pay. Correct?
Senator Bridges.
Thank you, Madam Chair. I'm always surprised when you and Senator Peltner are on different sides of something here. Senator Peltner wanting more flexibility, you wanting less flexibility. So real quick on the question you asked earlier about the tables on distribution, we're working on a greater than language here that is still underway. And I think to answer Senator Colker's question, that is something else that Case is interested in and that we are working on. To your specific question here, again, I think you and Senator Peltner are on different sides of this, which is always interesting to me.
Well, can you answer my question? The question was how is it going to – How are you going to ensure it's going to teach your pay?
Because we have an audit to ensure that districts are actually spending these dollars on what it is the people of Colorado have said that they need to be spending it on. Reducing turnover almost certainly will involve some kind of increase in pay. And I think that we do need to maintain some flexibility here for local districts to decide how it is they'll use these dollars. But in all of the districts that I have talked to so far teacher pay is the first and primary purpose for this As for the dollar amount that goes to each district it is distributed initially through the new funding formula And then once that funding formula is reached to 100 funding that it's distributed on just a same, like if based on how much each district gets through that funding formula. So that's the distribution. But to say that we know exactly what it's going to be, I think we can add whatever it is current law would require next year in that and then add this on top of that, happy to get you those runs.
But in fact, it doesn't matter if you have an audit or not. Great idea, I guess, because we probably should have one out of what they pay an audit. I think audits not a lot. Put it out on. But regardless, it doesn't mean that they have to use any increase that they would get in their positive factor towards teacher pay. They could use it for lowering class sizes, which could mean pretty much anything.
Thank you. Okay. I don't have a question. All right. Thank you. Committee members, are there any objections to the adoption of L006? Any objection to L6? Yeah. Seeing none, L6 is adopted. Are there any objections to the adoption of L008? Seeing none, L008 is adopted. The question before us is the adoption of Senate Bill 135 as amended by L6 and L8. Ms. Kanagaraja, please poll the committee.
Senators Gonzalez Aye Kirkmeyer No Colker Aye Liston No. Helton. No. Mr. Vice Chair. Aye. Madam Chair.
Aye. That bill passes 4-3. Next up, we have Senate Bill 151, Senator Gonzalez.
Thank you, Madam Chair. I move Senate Bill 151.
Committee members, any questions about Senate Bill 151? Seeing none, the question before us is the adopt. Is there an appropriations required on this bill? No. So why are we seeing it again, please?
Senator Gonzalez.
Thank you, Madam Chair.
Any policies that pertain to para?
Oh, yep. Thank you.
Ms. Kanagraja, please poll the committee on the adoption of Senate Bill 151. Senators Gonzalez. Aye. Kirkmeyer. Aye. Volker. Yes. Liston. Aye. Pelton. Aye. Mr. Vice Chair. Aye. Madam Chair.
Aye. Mr. Vice Chair.
May I suggest the consent calendar?
May I ask a quick question? Yes. Okay. This bill will be placed on the consent calendar. For the record, there was a thumbs up on that parallel. Okay. All right. And that concludes a very vigorous session. The Senate Committee on Appropriations is adjourned.