Thompson schools could get $12.6 million more in 2027-28, depending on how Legislature implements ballot measures

Thompson School District staff told the school board Nov. 4 that the district could receive $12.6 million in additional revenue in the 2027-28 year, depending on how the Legislature implements the ballot measures voters were deciding.

Staff pointed to two measures. A staff member described Amendment 8 as a graduated income tax and Proposition NN as the TABOR adjustment. Staff estimated the district would receive about $11 million a year from Amendment 8 and about $1.6 million in its initial year from Proposition NN. Amendment 8 had 50.64% support and was ahead by 28,000 votes as of 6 p.m., and Proposition NN was ahead by 233,000, a staff member said.

Proposition 136, which would have capped the income rate at 4.4%, failed by a margin of 117,000 votes, a staff member said. A staff member said it could have negated the graduated income tax part had it passed.

Staff also outlined the governor's proposed budget, which came out Monday. It includes a 4% cost-of-living adjustment for schools, distributed through a formula, and it implements the new School Finance Act formula to a 45% level. A staff member said the effect on the district was unknown and that the district was awaiting the Colorado Department of Education's calculation for each school district, which was expected to include a projected enrollment decline for 2027-28 that would reduce funding.

Several costs would draw on new money. Staff estimated that eliminating furloughs would cost about $2.5 million and that declining enrollment would cost the district $1 million to $2 million. Staff projected health insurance costs to rise $2.7 million and put the related pressures at about $8 million to $9 million.

A board member questioned whether the progressive income tax would produce the projected $11 million, asking whether "will it have the opposite effects because people will look at things differently?" A staff member replied that people who owe taxes at that level generally want to know how much they will have to pay, while acknowledging that some may adjust their behavior.

A 2.5% pay raise, which is less than the cost of living, would cost about $2.7 million, a staff member said. If the board wanted to provide raises, the staff member said, the district would need to identify another budget source for the money. The staff member added that the district needs to pay employees appropriately and attract people to work for it.

A board member asked that future budget updates include ideas for reducing spending, including on things that are good to do but not related to the district's core work. "I think these are things we may have to start looking at," the member said. A staff member answered that identifying reductions would be part of the regular budget process and that the board's adopted strategic plan would let the district assess how spending supports its goals.

Staff said the district expected its reserve percentage to be about 12% when the audit was finalized, and that it would be 9% if TABOR were excluded. The district had 30-day cash, while the Colorado Department of Education recommends 90-day cash, a staff member said. The district's goal is to avoid drawing further from its reserve, staff said.

The district removed $1.5 million from its current and projected next-year budgets and moved it to the bond for critical needs. A staff member recommended holding additional revenue for everyday capital needs. "$1.5 million is probably the minimum we should do," the staff member said, adding, "I personally think we should be at about $5 million."

On furloughs, a board member said any effect on furlough days would not come during the current school year and that the board could begin considering changes the following fall.

Adjusted assessed values were expected in December, and staff said the board would consider mill levy certification that month. Staff said the district would continue giving the board budget information almost every month, including expenditure information and updates on the Legislature.