Date: 01/19/2006
Final
State Education Fund Presentation
COMMITTEE ON JOINT EDUCATION
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01:38 PM -- Call to Order
The meeting was called to order by the chairman, Representative Merrifield.
01:38 PM -- State Education Fund Presentation
Deb Godshall, Legislative Council Staff, provided a handout the committee (Attachment A) regarding the State Education Fund. She said that her presentation would cover: the creation of the State Education Fund (SEF); how the dollar amount deposited in the SEF is determined each year; permissible uses for moneys in the SEF; the General Fund maintenance of effort requirement; the current balance of the SEF; the estimated percentage increase in the General Fund appropriation in future years needed to meet the Amendment 23 obligation; and the impact of funding additional programs from the SEF. Ms. Godshall noted that legislation implementing the SEF contains a provision for reconciling any shortfall or overage in the transfer to the SEF.
01:42 PM
Ms. Godshall discussed permissible uses of the moneys in the SEF, noting that the state constitution limits the types of programs for which moneys in the SEF may be spent. Money in the SEF, she said, may be spent to provide the minimum required increase in school finance and categorical program funding. She further noted that the General Assembly can, by law, designate additional programs as categorical programs, although it has not done so. She described other ways the General Assembly has used SEF moneys, including accountable education reform, accountable programs to meet state academic standards, class size reduction, expanding technology education, improving student safety, expanding preschool and kindergarten programs, performance incentives for teachers, accountability reporting, and public school building capital construction.
01:45 PM
Ms. Godshall responded to a question from Senator Tupa regarding funding of categoricals. She continued her presentation, referring the committee to a graph showing SEF revenues versus SEF expenditures. Ms. Godshall remarked on the maintenance of effort provisions, which require, when Colorado personal income grows by at least 4.5 percent, the General Assembly to increase the General Fund appropriation to school finance by at least 5 percent through Fiscal Year 2010-11.
01:48 PM
Ms. Godshall noted that the maintenance of effort provision was not triggered in three of the past five years because personal income grew by less than 4.5 percent. Ms. Godshall responded to a question from Senator Williams regarding the state constitutional prohibition on use of SEF moneys to supplant the level of General Fund appropriations for school finance and categorical programs. She mentioned Amendment 16, which concerns the State Land Board and state school trust lands and its relationship to Amendment 23. Ms. Godshall responded to a follow-up question from Senator Williams. Ms. Godshall continued her presentation, describing a table showing the estimated balance of the SEF in the future.
01:52 PM
Ms. Godshall described the increase in General Fund appropriations needed to meet the requirements of Amendment 23. Ms. Godshall discussed the model used to estimate the balance of the SEF. She noted that at approximately a six percent growth in General Fund appropriations to school finance a balance would begin to build in the SEF. Ms. Godshall responded to a question from Senator Bacon regarding the needed increase in General Fund appropriations in Fiscal Year 2011-12. She noted that using a six percent increase avoids the "cliff" in Fiscal Year 2011-12. She responded to a follow-up question from Senator Bacon.
01:59 PM
Ms. Godshall responded to a question from Representative Merrifield regarding prediction of when a decrease in General Fund appropriations might occur. Representative King noted that Fiscal Year 2011-12 is the year the Amendment 23 mandated increase of growth plus one percent ceases. Ms. Godshall responded to Representative King's comment. Ms. Godshall continued, describing the effects of spending additional SEF moneys. She described two example scenarios, referring to a graph in her handout. She noted that more expenditures out of the SEF put more pressure on the general fund.
02:04 PM
Ms. Godshall responded to a question from Representative King regarding the current balance of the fund.
02:04 PM
The committee adjourned.