Colorado Legislative Council Staff



General Fund Expenditure Impact

School District Revenue and Expenditure Impact

Drafting Number:

Prime Sponsor(s):

LLS 98-489

Rep. Udall


Bill Status:

Fiscal Analyst:

January 19, 1998

House Education

Janis Baron (866-3523)



Summary of Legislation


FY 1998/99

FY 1999/2000

State Revenues

General Fund

Other Fund



State Expenditures

General Fund — Department of Education - Administration

General Fund — Public School Finance Act - Total Program

$ 29,758


$ 27,608

Up To $95,000,000

FTE Position Change — Department of Education

     Nonclassified Position

0.5 FTE

Contract Labor

0.5 FTE

Contract Labor

Local Government Impact — See School District Impact of this fiscal note.

            The bill establishes the “Class Size Reduction Act of 1998” which includes the following provisions:


               authorizes any school district to apply to the Department of Education (DOE) for an incentive payment to implement a Class Size Reduction Program for kindergarten through third grade;

               for the 1999-2000 school year or any subsequent school year, requires an application be submitted no later than June 30 prior to the beginning of the new school year;

               allows school districts two options under a class size reduction program:

                 Option One:    Requires the school district to provide a reduced class size for all pupils in each classroom for the full regular school day.

                                         Subject to available appropriations, permits school districts applying for incentive payments under Option One, to request a two-year authorization to have a teacher-pupil ratio that averages 1:18, if it is operating on a year-round or other multi-track education calendar.

                                        Specifies that school districts operating under Option One shall receive a per pupil incentive payment to be determined by the State Board of Education.

                 Option Two:    Requires the school district to provide a reduced class size for all pupils in each classroom for at least one-half of the full regular school day, and to devote that half day primarily to reading and mathematics.

                                        Specifies that school districts operating under Option Two shall receive a lesser per pupil incentive payment than Option One (determined by the State Board of Education) in a lump sum payment.

               lists the items that a school district applying for incentive payments shall certify;

               excludes students enrolled in a home-study program;

               requires school districts which receive incentive payments but fail to implement the class size reduction program for all grades and classes shall refund moneys received to the State Public School Fund;

               requires a school district receiving incentive payments to implement a staff development training program;

               directs the DOE to contract for an independent evaluation of the program by March 28, 2004; and

               includes a blank appropriation clause.

            The bill is effective at 12:01 a.m. on the day following the ninety-day period after adjournment sine die of the General Assembly, or on the date of the official declaration of the vote of the people as proclaimed by the Governor, if a referendum petition is filed pursuant to Article V, Section 1 (3) of the State Constitution.

State Expenditures

            Department of Education, State Administration — The department will require $29,758 General Fund in FY 1998-99 and $27,608 in FY 1999-00 to implement the bill’s provisions. The bill allows school districts to apply for incentive payments under the Class Size Reduction Program for the 1999-2000 school year, with applications submitted to the state department no later than June 30 prior to the commencement of the school year. The bill requires the State Board of Education, through rule, to develop application forms. The State Board is also required to compute incentive payments, allocate payments, collect data, and monitor the respective district programs to: (1) ensure compliance; and (2) ensure there is no overpayment of state moneys. At the state level, the department will require an additional half-time nonclassified senior consultant to work with the State Board in carrying out its responsibilities.


            Incentive Payments to School Districts Under Options One and Two — Costs for the Class Size Reduction Program will be incurred in FY 1999-00. This fiscal note assumes the General Assembly will determine a level of funding to implement the program. Level of funding, level of participation, and each district’s option choice are unknown at this time. The information provided below identifies the cost with all districts participating in either Option One or Option Two.

            Option One (full day) — $95 Million. Based on October 1996 data, the Department of Education indicates that an estimated $56 million would be needed to reduce class size in kindergarten through third grade in all schools having greater than 20 pupils per class. Using the same October 1996 data, and recalculating to generate a class size of 18 pupils, the amount required is estimated at $95 million.

            Option Two (half day) — $47.5 Million. Because Option Two is for one-half of the full regular school day, the $95 million is simply reduced by half and indicates a need for $47.5 million.

            Evaluation — The bill requires the department to complete an evaluation of the program on or before March 28,2005, with funding provided in the annual Long Bill. It is estimated that for FY 2004-05, the Department of Education will require $50,000 to evaluate the Class Size Reduction Program.


Expenditures Not Included

            Pursuant to the Joint Budget Committee’s budget policies, the following expenditures have not been included in this fiscal note:


               health and life insurance costs ($1,105); and

               short-term disability costs ($57).

School District Impact

            Additional funding will be made available to school districts in FY 1999-00 through the Public School Finance Act to implement the program. Staff development requirements at the district level (identified in the bill) will result in increased costs to the school districts; these costs are not quantified at this time. This fiscal note assumes that General Fund appropriated for the Class Size Reduction Program will be for additional teachers. To the extent that districts are operating their buildings at full capacity, additional classroom space will be needed at district expense.

Spending Authority

            The fiscal note indicates that for FY 1998-99, the Department of Education should receive a General Fund appropriation of $29,758.

Departments Contacted