Senate Approves 2025 School Finance Act
HB25-1320 drives $256 million more to Colorado’s K-12 public schools for the 2025-2026 school year
DENVER, CO – The Senate today approved the 2025 School Finance Act. Sponsored by Senator Jeff Bridges, D-Arapahoe County, and Senate Minority Leader Paul Lundeen, R-Monument, HB25-1320 implements the new school funding formula and sustainably drives more funding to Colorado’s K-12 public schools.
“This is the first time since the 1990s that we’ve instituted a new funding formula for our schools,” said Bridges. “From boosting per-pupil funding to supporting underserved districts and at-risk students who need a helping hand, this year’s School Finance Act is good for families, teachers, and most importantly, students. It’s a strong investment in Colorado’s kids and public schools and ultimately, a strong investment in Colorado’s future.”
The 2025 School Finance Act would drive $256.7 million more to Colorado’s public schools than last school year, bringing the 2025-2026 school funding total to a record $10.035 billion despite Colorado facing a declining student enrollment environment. HB25-1320 acknowledges unique challenges for rural and remote districts, increases education funding to keep up with inflation and prioritizes sustainable funding for years to come.
In last year’s School Finance Act, lawmakers delivered on their promise to pay off the Budget Stabilization Factor. At the same time, HB24-1448 modernized the school funding formula used to determine the total program funding for Colorado’s K-12 public school districts for the first time in 30 years. This legislation created a more student-centered formula designed to drive more resources to rural and underserved districts, as well as students living with a disability, at-risk students and English Language Learners.
For the 2025-2026 school year, HB25-1320 would:
Provide $83.2 million more for public schools next year than the old school finance formula,
Increase average per-pupil funding by $412, bringing the total per-pupil funding to $11,863, and
Ensure that 157 of 178 districts will see an average 2.9 percent increase in funding, while the remaining 21 districts with significantly declining enrollment are held harmless.
HB25-1320 implements the new school funding formula at 15 percent per year for six years, and then 10 percent for the final seventh year of implementation, while still maintaining the four-year averaging model for the 2025-26 school year. To help stabilize school funding in a declining enrollment environment, the bill includes a three-year averaging model in 2026-2027 if the new funding formula is implemented at 30 percent, otherwise it will remain at four years.
As amended, HB25-1320 would create the “Kids Matter Fund” within the State Education Fund. Beginning July 1, 2026, the state treasurer would be required to transfer into the account 0.00065 percent of existing state revenue collected from federal taxable income each year. For the 2026-2027 school year, revenue would amount to an estimated $230 million for schools. The account would be used to protect per pupil funding and funding for programs like special education.
HB25-1320 now returns to the House for consideration of amendments.