SB135 proposes a constitutional-style funding change for Colorado K-12 public education by creating a new “positive factor” that increases state public education funding by 2% each year for at least ten years, beginning in the 2026-27 budget year. The bill ties the annual increase to the state’s school finance formula and requires the Department of Education and Legislative Council staff to calculate district-level shares each year. It also specifies that the added money must be used only for teacher pay, teacher retention, smaller class sizes, and expanded access to career and technical education courses.
The measure also asks voters to approve a revenue-retention change so the state can keep and spend revenue that would otherwise be refunded under TABOR, but only up to the amount of state public education funding. Those retained funds would be placed in a new Children’s Account and distributed first to the 2% K-12 increase, then to other K-12 investments such as school services, disability services, and increased instructional contact hours, and finally to child-focused programs including child care and full-day preschool. The bill also requires annual reporting and an independent audit of how the money is spent, and it directs local education providers to publicly post expenditures of the new funding.
In practical terms, SB135 would amend multiple parts of Colorado law governing school finance, state revenue limits, tax credits, and fiscal reporting. It would create new statutory definitions and procedures for calculating and distributing the funding increase, modify how excess state revenues are treated for TABOR purposes, and add transparency requirements for school districts. It also changes the treatment of “nonexempt revenue” in certain tax credit statutes so the new education funding can be counted in the revenue calculations used for those programs.
The general sentiment reflected in the voting history is supportive but not unanimous. The bill advanced through Senate Finance and Senate Appropriations with committee majorities, and it passed Senate Third Reading, indicating meaningful legislative support for increased school funding. However, the recorded 13-19 vote on the Senate Committee of the Whole amendment and the earlier 6-3 vote in Senate Finance show that the proposal drew substantial opposition or concern at several stages, especially around its fiscal structure and the use of state revenue.
The main points of contention appear to be the bill’s long-term fiscal commitment, its interaction with TABOR revenue limits, and whether the state can sustain the new spending without crowding out other priorities. Supporters emphasize teacher pay, retention, class size reduction, and early childhood investments, while critics are likely focused on the size and duration of the obligation, the mechanics of retaining excess revenue, and the possibility that the bill could constrain future budgets or reduce flexibility for other state programs.
SB135 would substantially alter Colorado school finance law by creating a new statutory mechanism for annual K-12 funding growth, requiring recurring calculations of district and statewide funding shares, and mandating that the added dollars be used for specified education purposes. It would also create a new Children’s Account and authorize the state to retain and spend revenue otherwise subject to TABOR refunds, but only in an amount tied to state public education funding. In addition, it would impose new public reporting and audit requirements and adjust related fiscal and tax-credit statutes to account for the new revenue treatment.
The bill appears to have strong support among its sponsors and enough backing to move through several committees and pass Senate Third Reading, suggesting broad interest in increasing school funding. At the same time, the mixed committee vote margins and the failed committee-of-the-whole amendment vote indicate that the bill is controversial and not universally accepted. Overall, the sentiment is favorable toward education investment, but cautious and divided on the fiscal design and constitutional revenue implications.
The biggest contention is how to pay for the proposed increase: supporters want to retain state revenue that would otherwise be refunded under TABOR, while opponents are likely concerned about expanding state spending authority and reducing future refunds. Another point of debate is whether dedicating funds specifically to teacher pay, retention, class size reduction, and career/technical education is the best use of the money, versus leaving more flexibility to districts or the state. There is also likely disagreement over the bill’s long-term affordability and whether the new funding commitment could affect other state priorities if revenues weaken.