Colorado lawmakers have largely tried to spare schools from major funding cuts while balancing a state budget weighed down by a $1.2 billion deficit, but there’s one tool they haven’t touched — and it would give them enough money to avoid education cuts altogether.
That tool is known as the state’s permanent fund, also called the public school fund, which quietly stashes away state trust land revenue fueled mostly by oil and gas royalties each year. The fund is part of the state constitution and exists to preserve education dollars for future generations. It currently holds more than $1.6 billion with a preliminary estimate of $95 million to $100 million to be deposited into it this year.
Once money lands in that fund, the dollars are invested and the money within the fund cannot be taken out, as dictated by the constitution. But before the funds make their way to the permanent fund, they are fair game to be directed toward the state’s K-12 education needs.
The clock is ticking for lawmakers to decide how to fund schools this year before the end of the legislative session in May. While one piece of legislation, House Bill 1320, floats through the Capitol, some education advocates say lawmakers must consider rerouting state trust land revenue to schools this year so they can access as much state funding as possible.
House Bill 1320 proposes slightly reducing education funding from the total amount districts would receive if the state’s new school funding formula went into effect next year as originally designed —a drop of about $16.3 million. The legislation also aims to place a funding cap on Colorado’s Building Excellent Schools Today program to $150 million per year. That limit would allow the state to shift about $45 million from the BEST Grant Program, which helps fund large-scale infrastructure projects across Colorado districts, into the school funding formula next year.
The central point of tension dividing lawmakers and education advocates over how to handle the permanent fund: Should Colorado continue growing that pot of money to produce more interest that can benefit schools down the road or, in an especially tough budget year, should lawmakers divert some of the state trust land revenues that would feed the permanent fund this year to school funding and the BEST Grant Program to protect them against funding slashes?
“If we’re in a budgetary crunch and there is concerns about the ability to fund the school finance act, why would we put that money into a savings account, aka the permanent fund, when we could use that money as a Band-Aid for the school finance act?” asks Matt Samelson, a BEST board member.
A letter BEST board members sent to Gov. Jared Polis and the General Assembly in February urged state leaders to explore redirecting some State Land Board revenue to the school funding formula.
First graders at Lake County Elementary School in Leadville work on a math problem Jan. 13, 2025. (Jason Connolly, Special to The Colorado Sun)The letter, in which BEST board members wrote about the need for the legislature to contemplate a variety of possible funding streams for schools, cited other years in which lawmakers tapped state land trust revenues for the school funding formula. Lawmakers relied on those revenues for school funding at least a handful of times stemming back to the Great Recession and as recently as 2020, when the pandemic sent the state economy into a downturn.
The permanent fund is as old as the state, part of Colorado’s statehood deal with the federal government, according to Colorado State Treasurer Dave Young, whose office serves as the custodian of the funds. Young said the permanent fund was designed to take proceeds earned on state lands and used to support K-12 students.
While the permanent fund houses a significant amount of money for future students, some state trust land revenue and interest that spins off the permanent fund already go toward today’s students and school facilities. It’s a complicated funding matrix: More than half the revenue from state trust lands — at most $40 million — funnels into the BEST Grant Program to help pay for a financing tool known as certificates of participation that the state uses to pull off major school infrastructure projects such as school building replacements. Much of the rest of that revenue gets stored in the permanent fund, according to Young’s office.
Meanwhile, part of the interest coming from the permanent fund helps pay for BEST cash grants that give school districts enough money to tackle facility needs, such as new roofs and heating, ventilation and air conditioning systems. Other interest — currently $11 million — is allocated to the State Education Fund, a sort of bank account holding reserves that contribute dollars to the school funding formula and also support a variety of other school programs.
Figuring out how to support kids in Colorado classrooms right now and ensure students in the future are also set up for success with state funding is a delicate balancing act and puts the state in a “bind,” Young said.
“The argument here is is that if you divert money to meet today’s need, you’ve lessened the ability for future generations to benefit,” he said.
Mary Wickersham, the original chair of the board overseeing the BEST Grant Program, argues that the revenue earmarked directly for the permanent fund should support current students instead of being tucked away for future generations, equating it to “kitchen table economics.”
Wickersham said the decision to keep all state trust land revenues flowing into the permanent fund is like cutting back on groceries for the sake of putting money into a savings account.
The Colorado Capitol in Denver on Monday, Jan. 6, 2025. The gold dome is made of a thin layer of real gold. (Jesse Paul, The Colorado Sun)“I think that the legislature’s been faced with a lot of impossible choices this year and there are cuts happening across a lot of important programs,” she said. “And it seems illogical to me that when you’re contemplating cutting $1.2 billion from the state budget that you’re continuing to make deposits over $100 million into an investment fund that you can never touch.”
Colorado State Board of Education member Kathy Gebhardt, a former BEST board member who helped create the grant program, is another proponent of leaning on state trust land revenue for school funding and the BEST Grant Program this year while the state faces a crisis.
“It doesn’t make much sense to save money, to put money in savings, when we’re cutting,” Gebhardt said.
Colorado House Speaker Julie McCluskie, a Dillon Democrat and sponsor of the current school finance bill, counters that pulling revenue on track to land in the permanent fund for school funding and the BEST program this year would be shortsighted. She said she hopes that the state “can protect the permanent fund for years to come.”
“We have to do everything we can to protect ongoing future funding for public schools, and the permanent fund is designed to remain whole so that we can draw on that interest for years to come,” McCluskie told The Colorado Sun. “We had a very difficult budget year. We were creative in how we approached school funding, making sure our schools realized the additional funding that they needed and making cuts where we could to help take pressure off of the budget. We certainly were not at a point where it was a moment of last resort in tapping into the permanent fund.”
Last year, the permanent fund resulted in $51 million in interest, $41 million of which was distributed to schools — a figure that leads some like Samelson, of the BEST board, to question why the state would prioritize generating interest for future students over supporting kids in schools that urgently need more money next year.
☀️ READ MORE
Colorado legislature declines to override Jared Polis’ veto of social media bill after House caves
2:29 PM MDT on Apr 28, 20254:32 PM MDT on Apr 28, 2025ICE raids Colorado Springs illegal after-hours nightclub, detains more than 100 immigrants
8:12 AM MDT on Apr 28, 202512:28 PM MDT on Apr 28, 2025A free apartment comes with strings attached for Denver RV dwellers — and no place to park
4:23 AM MDT on Apr 28, 20252:53 PM MDT on Apr 28, 2025“When we’re spending $10 billion a year on school finance,” Samelson said, “we’re never going to grow the permanent fund big enough to really make any meaningful amount of interest off of it that it makes a significant dent on the contribution to school finance.”
State Sen. Jeff Bridges, a Greenwood Village Democrat and chair of the JBC, did not respond to a request for comment about how lawmakers might proceed with state trust land revenue.
The Colorado Senate will next debate House Bill 1320 on Wednesday.
Read More Details
Finally We wish PressBee provided you with enough information of ( Are Colorado lawmakers leaving money on the table that would prevent school funding cuts? )
Also on site :