Colorado K-12 school districts are tightening their belts this summer amid growing financial uncertainty at both the state and federal levels.
Two metro Denver districts have announced layoffs so far this year, and others have already eliminated or plan to cut positions by not filling job openings in the coming months.
School districts are also giving employees smaller raises than they have in years past, even as educators’ health insurance costs increase. And they are dipping into their reserves to help make ends meet.
“We have to make cuts to our organization,” said Scott Smith, chief financial officer for the Cherry Creek School District, which serves more than 53,000 students. “…It’s hard to keep it away from schools, but we’ll do everything that we can to do that.”
On one hand, things don’t look as bad, budget-wise, as K-12 school districts feared earlier this year when it became clear the state was looking at a $1.2 billion dollar shortfall.
The new School Finance Act passed by legislators this spring will continue to use a four-year enrollment average to help determine funding for the 2025-26 fiscal year — a mechanism that Gov. Jared Polis tried to get rid of, but districts said was needed to help soften the blow of declining enrollment.
But despite overall K-12 funding increasing to more than $10 billion this year, not every district received more money. Costs — from health insurance to utility bills — are also increasing, placing pressure on districts both big and small, according to school officials.
“The cuts weren’t as bad, (but) it’s not addressing the root problem, which is we just don’t have enough funding in the system to do what’s necessary to educate kids and to pay people and operate,” said Tracie Rainey, executive director of the Colorado School Finance Project.
Districts also face uncertainty about what will happen with K-12 funding at both the state and federal levels in the coming years. A state budget forecast released earlier this month, which showed a $700 million shortfall in the next fiscal year, doesn’t bode well for districts, Rainey said.
The Trump administration has also threatened to cut federal K-12 funding, which could lead to a loss of millions of dollars for Colorado’s schools.
Districts have to reduce costs, but they have few options in doing so, Rainey said.
“You’re either cutting people or programs,” she said.
For students, the cuts could mean larger class sizes and less access to mental health professionals or interventionists to help those struggling with reading or math, Rainey said.
How metro Denver districts are responding
The Cherry Creek School District’s funding only increased by 1.5%, or roughly $9 million, via the new School Finance Act, Smith said.
“While districts are going up in total dollars, it’s not nearly enough to keep up with the cost pressures we have,” Smith said.
The school district will spend the next six months figuring out how to reduce costs, with hopes of being able to do so by not filling open positions rather than relying on layoffs, Smith said.
“I’m confident we can accomplish most — if not all of it — through attrition,” Smith said. “…If federal funding is affected in any way, this becomes a lot worse very quickly.”
Cherry Creek also gave employees modest raises — 3% — this year, but health insurance expenses rose 12% and most of that increase is falling on staff, he said.
The biggest sign that districts are retrenching is showing up in educators’ paychecks.
Denver Public Schools, the state’s largest district, struck a tentative deal with its teachers union last week for $1,000 cost-of-living raises for each of the next three years, plus a separate $1,000 bonus. DPS also cut 38 central office jobs earlier this year to save $5 million.
The Douglas County School District is also relying on employees retiring or leaving for other districts as a way to reduce staffing levels and avoid large-scale layoffs. The district, the third-largest in the state, will also use $18 million in reserves to balance the budget for the 2025-26 school year.
The Douglas County district gave between 2% and 3% raises to employees this year, which cost the district about $14 million.
The district has focused on increasing compensation for staff in recent years so that it can be more competitive in recruiting and retaining employees, so leaders tried “not to skimp too much on raises,” said Chief Financial Officer Jana Schleusner.
‘It’s just not sustainable’
The Boulder Valley School District will reopen negotiations with its teachers union in August because district officials are no longer sure they can afford their existing salary schedule.
In preparation for those talks, the district and the Boulder Valley Education Association have agreed that teachers will receive a cost-of-living increase next academic year via a stipend — valued at 1.6% of their 2025-26 salary — without the district increasing compensation on the salary schedule.
Educators who receive a pay raise next year for earning a higher-level degree will not also get the pay increase they’d normally receive for having another year of experience, said union President David Stewart.
Teachers are paid in “steps and lane” compensation and normally get raises each year as either their experience or education level increases.
“The money saved from all of these moves is to create a cushion of money so that we can transition people to the new salary schedule,” Stewart said.
Boulder Valley has also cut 30 positions and funding for school counselors, Stewart said.
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“It’s just not sustainable in the structure we have in Colorado for funding K-12,” he said.
The new salary schedule to be negotiated by the district and union would be in place for the 2026-27 and 2027-28 school years. While teachers won’t earn less money once the schedule is revised, it is possible that the rate at which their salary rises will slow, Stewart said.
The uncertainty surrounding both the state budget and federal funding creates concern about whether the Boulder Valley School District will even be able to afford the new salary schedule, he said.
“That would be kind of a nightmare, but it’s also a potential reality,” Stewart said.
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