The annual School Finance Act, which sets funding for Colorado’s 178 public school districts and 262 charter schools, will be introduced this week.

Its prime sponsor says the bill will hold public K-12 schools harmless in the first year of implementing a new school finance funding formula.

House Speaker Julie McCluskie, D-Dillon, will sponsor the measure, along with Rep. Meghan Lukens, D-Steamboat Springs.

The formula will be modified, a nod to the budget shortfall. Under House Bill 24-1448, the formula was intended to be phased in over six years to protect schools from harm when enrollments decline.

Under the 2025 School Finance Act, that phase-in will be spread out over seven years.

Another change from the 2024 legislation is the extent to which the formula will be implemented. Under HB 1448, for the 2025-26 year, school districts would receive the total program funding under the old formula (that is, the state share plus the local share from local property taxes) plus 18% of the new formula funding.

The 2025 School Finance Act reduces the additional money to 15% but increases it by 30% the following year and by 45% the year after, with full implementation by 2030.

In his Nov. 1 budget proposal, Gov. Jared Polis had suggested changing to a system of single-year pupil counts for determining funding, a difference from the new school finance formula’s four-year averaging. However, this proposal faced pushback from the Joint Budget Committee, lawmakers, teachers, students, and parents from around the state, who argued that it would result in millions of dollars in school funding cuts.

The McCluskie bill continues to rely on the four-year averaging outlined in the 2024 legislation. Still, she said she is open to discussions about reducing the average to three years or implementing some other kind of “smoothing” factor.

Under the 2025 bill, schools will be held harmless to 2024-25 funding for the 2025-26 and 2026-27 school years.

“Our goal is to ensure no school’s funding falls below the amount I received in the 2024-525 school year,” according to a fact sheet from the sponsors Tuesday.

Still, some schools will see flat funding. The Sheridan School District, which has the highest number of free and reduced lunch students (an indication of poverty) of any urban district in the state, is anticipating a 3.1% decline in enrollment. Under the 2025 bill, they will not receive a funding increase; however, this is an advantage over the previous formula, which would have resulted in a 5.3% funding decrease, according to the fact sheet.