What happened to all that marijuana money?
Possibly THE most asked question about school funding. We’ve answered it many times but the question still exists, so let’s make sure we get the information out there!
It’s really not much of a mystery; but it does seem to have a lot of folks confused. SJK is sharing some information and resources to help “solve the mystery”.
In November of 2012, when Colorado voters approved Amendment 64 (the legalized sale of marijuana for recreational use and the subsequent 15% excise tax) they thought they were solving the state’s problem of funding our public schools. Not so.
While there are funds from the “Marijuana Tax” that goes toward funding schools, the devil is in the details. The funds directed to schools are limited to the first $40 million, and are directed into a “state fund used for constructing public schools”. No funds for operating expenses, construction only. But there’s more.
Handout – SJK Marijuana Money
Let’s begin with a brief outline:
Amendment 64 – was approved by voters in November, 2012
From the Colorado General Assembly website:
“Amendment 64 requires the legislature to enact the state excise tax; however, the Taxpayer’s Bill of Rights (TABOR) requires a separate statewide vote to approve the tax and any future tax increases. Under the measure, the excise tax is limited to tax and any future tax increases. Under the measure, the excise tax is limited to 15 percent until January 1, 2017, when the legislature may set it at any rate. Each year, the first $40 million in revenue raised by the excise tax will be credited to a state fund used for constructing public schools. Medical marijuana is not subject to the state excise tax required by the measure, or to any existing state excise tax. “http://www.leg.state.co.us/LCS/Initiative%20Referendum/1112InitRefr.nsf/dac421ef79ad243487256def0067c1de/cfa3bae60c8b4949872579c7006fa7ee/$FILE/Amendment%2064%20merged.pdf
- The statewide vote to approve the tax (referred to in Am. 64) was not passed by voters until 2013 – Proposition AA.
- The 15% excise tax on Marijuana is only partially directed to schools – the first $40 Million.
- Funds exceeding that amount are directed to support the regulation of the sale of marijuana as well as educational programs regarding the use of marijuana, etc.
This $40 Million are designated for the “state fund used for constructing public schools”, the BEST program: Building Excellent Schools Today.
The $40 Million is intended for construction ONLY, is a matching grant, and provides no funding for operating expenses.
So then, why can’t our school district use some of the $40 Million for our repairs and new buildings?
The answer lies in a couple of key factors:
$40 million funding for a statewide program does not go very far when there are 178 school districts in the state; especially if you look at the cost of building one school, which depending on the size, location, and various other considerations of construction, can range anywhere from $10 or $15 Million for some extremely small elementary schools to $45 Million plus for a high school.
The BEST program has other limitations and was intended for some specific uses.
BEST, Building Excellent Schools Today, is a fund that was established in 2008. It is grant based and requires matching funds. The key focus of BEST (in 2008) was directed toward those poorer, small, and rural school districts that simply do not have the tax-base of the city and suburban school districts to support a bond large enough to do major construction. Most schools in the metro area run anywhere from $10, $15, and $25 million-plus; a small district like Creede, Haxtun, Kim and many others can’t come close to that.
Learn more about the good work resulting by the BEST program: https://www.cde.state.co.us/cdefinance/bestgrantprogramoverview
Also, here’s a News Release from CDE on the latest updates for BEST:
State board approves $447 million for BEST program, largest amount ever
Board OKs final revisions to Colorado Academic Standards
DENVER – The Colorado State Board of Education on Wednesday approved $447 million for 35 school construction projects across Colorado from the Capital Construction Assistance Fund for the Building Excellent Schools Today (BEST) grant program.
The 2018-19 award is the largest ever amount approved for the program that began in 2008. Approximately $85 million of the 2018 awards will be funded through cash grants provided by income earned from the Colorado State Land Board, marijuana excise taxes, spillover from the Colorado Lottery and interest on the assistance fund. Applicants will contribute $74 million in matching funds.
Another $190 million is through lease-purchase grants from the state. Financing will be repaid with future assistance fund revenues. Applicants will contribute $98 million in matching money.
School districts, BOCES, the Charter School Institute, charter schools and Colorado School for the Deaf and the Blind may apply for the competitive grants.
The grants are intended for the improvement of health, safety, security and technology in public schools. Schools apply for the grants and the Capital Construction Advisory Board reviews applications, prioritizing them and submitting their recommendations to the state board for approval.
In all, 35 projects and five backup projects were selected for the 2018-19 cycle, including six charter schools. Highlights include:
- Replacement of a junior-senior high school and renovation of an elementary school in Hayden RE-1 School District, $61.2 million.
- Renovation and replacement of the Buena Vista High School and Middle School in Buena Vista R-31 School District, $50.9 million.
- Replacement of Orchard Mesa Middle School in Mesa County Valley 51 School District, $39.9 million.
- New preschool through 12th grade school in Kit Carson R-1 School District, $32.3 million.
- A new school for Swallows Charter Academy, $20.1 million.
Additional information from CDE here:
Building Excellent Schools Today (BEST)
Written into Amendment 64 is a commitment to credit the Colorado Capital Construction Assistance Fund with the first $40 million generated each fiscal year from the retail marijuana excise tax to renovate existing school buildings or construct new buildings. In 2018, the state legislature passed House Bill 18 1070, increasing the amount of retail marijuana excise tax that can be credited to the assistance fund. Beginning July 1, 2018, the amount collected will be the greater of 90 percent of the revenue annually collected or the first $40 million collected. The remainder of the revenue will continue to be credited to the state public school fund.
The BEST program prioritizes health, safety and security issues such as asbestos removal, new roofs, building code violations, and poor indoor air quality. BEST grants are competitive, awarded annually and in most cases must be supplemented with local district matching funds.
Marijuana tax revenue is just one of four funding sources for the Capital Construction Assistance Fund, the total of which is only a fraction of what is needed for the repair, maintenance and construction of Colorado’s public schools. A statewide facility assessment determined a need of nearly $18 billion in capital construction projected through 2018.
Here is how marijuana excise tax revenue has been used for the Capital Construction Assistance Fund:
- In Fiscal Year 2015-16, $40 million in marijuana excise tax was allocated to the Capital Construction Assistance Fund that supports the BEST competitive grant program, plus an additional $40 million was paid into the fund from a one-time disbursement resulting from Proposition BB, a successful statewide ballot measure in 2015 that allowed the state to keep the surplus in marijuana tax revenue.
- In Fiscal Year 2016-17, $40 million of marijuana excise tax was allocated to the Capital Construction Assistance Fund with the excess $5.7 million going to the Public School Fund.
- In Fiscal Year 2017-18, $40 million of marijuana excise tax was allocated to the Capital Construction Assistance Fund.
- In Fiscal Year 2018-19, $40 million of marijuana excise tax was allocated to the Capital Construction Assistance Fund.
Marijuana Tax Cash Fund (MTCF)
In 2014, the state legislature created the Marijuana Tax Cash Fund (MTCF) to collect sales tax revenue from retail and medical marijuana. Revenue from MTCF must be spent the following year on health care, to monitor the health effects of marijuana, health education, substance abuse prevention and treatment programs and law enforcement.
Under MTCF the department received money specifically for:
- The School Health Professional Grant program to address behavioral health issues in schools.
- A grant program to help schools and districts set up initiatives to reduce the frequency of bullying incidents.
- Grants to fund drop-out prevention programs.
- Early Literacy Competitive Grants to ensure reading is embedded into K-3 curriculum.
Marijuana tax revenue distributions to the Colorado Department of Education, 2015-2017
School Construction – Capital Construction Assistance Fund
- 2015-16: $80 million*
- 2016-17: $40 million
- 2017-18: $40 million
- 2018-19: $40 million
Early Literacy Competitive Grant Program
- 2016-17: $4.4 million
- 2017-18: $4.4 million
School Health Professional Grant Program
- 2015-16: $2.3 million
- 2016-17: $2.3 million
- 2017-18: $11.9 million
School Bullying Prevention & Education Grant Program
- 2015-16: $2 million
- 2016-17: $900,000
- 2017-18: $2 million
Drop-out Prevention Programs
- 2015-16: $2 million
- 2016-17: $900,000
- 2017-18: $2 million
State Public School Fund
- 2017-18: $30 million
Marijuana funding for education compared to overall education funding
- Marijuana revenue for CDE: $86.3 million
- Overall state K-12 education funding: $5.3 billion*
- Marijuana revenue for CDE: $90.3 million
- Overall state K-12 education funding: $5.6 billion*
- Marijuana revenue for CDE: $54.2 million
- Overall state K-12 education funding: $5.4 billion*