Eagle County School District’s preliminary budget projects less funding from the state, more reliance on local sources

The Eagle County School District’s budget looks adequate for next year. But at its current funding and spending rates, the district is on track to completely deplete its general fund three years from now.

The school board reviewed the district’s preliminary 2025-26 budget during its Wednesday meeting. The final budget will come to the school board for approval on June 18.

Next year, the district is looking at general fund revenue of $109 million, expenditures of $104 million and transfers of close to $9 million, overspending by $3 million and driving the general fund down from $10 million to $7 million.

For now, those numbers, while not stable, enable the school district to continue to operate as it currently does, and likely provide its teachers and staff with the 3% raises they anticipate. Going forward, that may not be the case.

What will Eagle County School District funding look like next year?

On May 7, the state legislature approved 2025-26 School Finance Act with overwhelming support, implementing the new school funding formula created last year to much fanfare from educators and boosting funding for K-12 education by $256 million over 2024-25. The act will ensure no district receives less funding next year than it did this year and 157 of Colorado’s 178 districts will see a slight increase.

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The new school funding formula drops enrollment averaging from five years to four, meaning when districts receive their per pupil funding, the current year is averaged with the three prior. Enrollment has been declining in Colorado schools for years, and Eagle County is no different — the district saw its largest enrollment decline in a decade this year. 

Due to the new averaging formula, the district will be funded for 6,428 students, 152.5 fewer students than this year. In total, the district will receive $76 million from the state based on per pupil funds, $1.6 million than it had this year, a 2.19% increase year over year.

But the state’s share of funding for the district will actually decrease by 32% in 2025-26 compared to 2024-25 ($11 million down from $16 million). The School Finance Act changes the way funding is allocated, so that the district’s revenue from Eagle County property taxes increases by nearly $7 million, more than covering the deficit from the state and helping lift the overall School Finance Act-provided budget $7 million higher for 2025-26 than this school year ($81.5 million up from $74.5 million). Other forms of revenue, including state and federal revenue and specific ownership taxes, lift the budgeted general fund revenues to $109 million for next year.

The district plans to spend $103 million from its general fund, mostly to support salaries ($59 million), benefits ($23 million), purchased services ($9 million) and supplies and equipment ($5 million). The district will transfer another $7 million out of the general fund to support its essential programs like preschool offerings ($3.8 million).

Ahead of the March 12 school board meeting, the district asked all departments to draft ideas to cut their budgets by 5% without touching personnel. The resulting suggestions will lead to $1.3 million in cuts to the district’s budget next year. It was the first time in 14 years that the district has asked its departments to make cuts across the board.

“We’re planning for a worst-case scenario from the state,” said Phil Qualman, district superintendent, at the March 12 school board meeting.

In March, Qualman said the district was “projecting a goal” to try to provide the step increases that the salary schedule dictates, which comes out to about a 3% average for all staff.

Negotiations are ongoing between the district and the Eagle County Education Association (the teachers’ union) regarding next year’s staff positions and salaries. While the district will decide that some positions need to be cut, it will not tell anyone which individuals will lose their jobs.

“The decisions at the building level are up to principals and their teams. We won’t be telling anybody what positions to cut. They will decide those cuts based on enrollment, student interest and the needs of their kids,” Qualman said in March.

While next year’s finances look OK, the district may be in hot water within three years

The district aims to maintain a general fund balance of around $10 million. The district’s general fund was bolstered up to nearly $19.6 million by COVID-19 funds heading into the 2021-22 school year, and the district has been deliberately spending down the balance ever since. This year, the general fund balance is anticipated to end at $10.3 million after about $1.3 million in overspending. 

But to continue to offer raises and maintain staff, the district is looking at further deficit spending of $3 million in the 2025-26 school year, leaving a fund balance of $7 million at the end of the year.

If the district maintains its current expenditures, including its current salary schedule and cost of living increases for full-time staff members, with an overall general fund increase of 3% each year, it will have a negative general fund balance within three years, which is not allowed by state statute.

But going forward, step increases of 3% for everybody each year are “negotiable,” Qualman said in May.

Salary and benefits are “over 80% of our budget, and it’s the only thing we can effectively make a significant adjustment to,” said Sandy Farrell, the district’s chief operating officer.

There are just two ways to increase the district’s future budget: More funding needs to come in either from the state or locally.

“The only way to really increase the local share is for mill levy overrides and providing that support,” Farrell said. “We have some room to go to the voters and be able to ask for a mill levy override.”

Preschool funding remains unruly, as district balances low funding from state, county

The district’s preschool fund covers preschool, infant, toddler and some extended day care. Next year, the district will expand offerings at the Edwards Early Learning Center and finish building the Gypsum Early Learning Center with a planned January 2026 opening. 

Preschool is not fully funded by the state. While next year, tuition and state revenue will increase, “when we look at the dollar that we get for the per-pupil revenue for preschool, it isn’t sufficient to meet the demand of having a preschool all day long,” Farrell said.

The district expects to spend nearly twice as much as it receives in funding on providing preschool programming next year, leaving a deficit of $3.8 million, which the district will cover through a transfer from the general fund. (Universal pre-K funding from the state is expected to amount to $2.5 million next year.)

To capture more Colorado Child Care Assistance Program funding, which comes from the county, the district increased its preschool tuition fees on Jan. 1 this year. The district can only receive CCCAP funding from the county to match what it charges in tuition, so the district plans to incrementally increase its tuition rates until it reaches the CCCAP ceiling.

“It’s frustrating to see those numbers and knowing how much our teachers and our families in this community need this early childcare support, I wish we could talk to our partners about how much we’re struggling here and try to figure something out that would help our community,” said Lelia Conlin, school board member.