As Colorado’s new funding formula for public education rolls out over the coming years, local school districts are beginning to prepare how this might impact their fiscal budgets.

Lewis-Palmer D-38’s board of education was presented with a planning process for the 2026-27 fiscal year and the following years during a Feb. 10 work session.

The district’s chief financial officer Brett Ridgway presented the board with forecasted enrollment projections, anticipated revenue and expenditure assumptions, staffing and programmatic considerations, and timelines leading up to the next budget approval.

Following the passage of House Bill 24-1448, a new school finance act will replace the previous formula approved in 1994 incrementally over the next four academic years.

While the new formula will increase per-pupil funding and funding for at-risk students and special education funding from the state, its calculation will shift from a multi-year average to a year-by-year average. Since student enrollment has steadily declined in Colorado in recent years, this could ultimately lead to reduced funding for some districts.

In the case of D-38, the district currently projects a count of 99 fewer students for the 2026-27 school year.

Ridgway also noted that, since Colorado’s annual budget faces a $850 million shortfall, the state legislature will likely make cuts to existing programs like education, which is currently the second-largest expense in the general fund, to fill this gap.

Since local school districts are funded by both state and local revenue, any cuts will put more onus on each district’s revenue sources, which vary. Namely, changes in the accounting for specific ownership taxes and an increased share of property taxes could impact cash flow going forward.

As for what this could mean for D-38, Ridgway said the new funding formula will neither help nor harm the district, but long-term adjustments to account for the projected loss in pupil revenue could include slowing down its ongoing work with the Grace Best building, since the incoming Home School Academy’s construction has been slightly delayed, and shifting pay increases to steps rather than greater base pay for the coming years.

Some of the early actions taken this year include eliminating new-hire bonuses, while adjusting retention bonuses and developing their own health insurance program have also been discussed.

D-38 Superintendent Amber Whetstine said that talks with school leadership have been ongoing for the past year to determine individual program changes.

“So, we’re being very proactive in planning for these adjustments and (are) including multiple groups such as our staff collaboration committee and financial transparency committee, as well,” she said.

Ridgway also said that the district’s annual capital maintenance program has already been reduced from $3 million last year to $2.5 million in investment.

“So, that’s a lever that we pulled coming into this year,” he said.

He added that restorations or further reductions are possible going forward and depend on future projections.

More defined adjustments and updates will be presented to the board in upcoming meetings.

“We’ve already begun the hard work and will continue to do the hard work,” Ridgway said.