Proposition NN and what it would actually mean for D38

There is a statewide school funding question on the November 3 ballot, and because it is a state measure most of the coverage describes it in billions. That makes it hard to answer the only question a Monument, Palmer Lake, or Woodmoor voter really needs answered: what would it do here?

The legislature’s own fiscal analysts published the answer in a table almost nobody reads. For Lewis-Palmer D38, the estimate for the first year is $241,240.

What Proposition NN asks

Proposition NN was referred to the ballot by the legislature as Senate Bill 26-135. The ballot title reads:

Shall state investment in K-12 public education increase two percent each year for the next ten years, with investments used to increase teacher pay, improve teacher retention, lower class sizes, and increase access to career and technical courses, without raising taxes but instead funded by raising the annual limit on state fiscal year spending only by the amount spent on public K-12 education as a voter-approved revenue change, and requiring an annual publicly released, independent audit to show how the new investments are spent?

The mechanism matters more than the summary. Under TABOR, revenue the state collects above the Referendum C cap has to be refunded. Proposition NN would not raise any tax rate. It would raise the cap — by an amount equal to what the state already spends on K-12 education out of TABOR-subject sources, about $4.6 billion — and let the state keep and spend surplus revenue up to that new ceiling instead of refunding it.

Money retained that way goes into a new Children’s Account in the General Fund. From there, under the version of the bill that passed, it is spent in a set order. Beginning in FY 2027-28 the state first covers its reimbursements to local governments for senior, veteran, and Gold Star homestead property tax exemptions. Next comes a new K-12 “positive factor,” which is the piece that flows to districts. Then, if the positive factor came to less than half the account, the balance up to half still has to go to K-12 — specifically to school services, services for students with disabilities, and increasing annual contact hours. Whatever is left goes to programs for children, prioritizing child care and full-day preschool.

The short version: at least half of the money is earmarked for K-12, and the first call on it is the positive factor.

What D38 would get

The positive factor is the part that reaches districts. Legislative Council Staff estimated the statewide positive factor at $107.4 million in FY 2026-27 and $221.2 million in FY 2027-28, and published a district-by-district table for the first year.

D38’s line:

Against a funded pupil count of 6,040.4, that is about $40 per pupil. Against total program funding of $67.2 million, it is about 0.36%.

Why the number is smaller than you would guess

Almost all of the first-year money — $105.5 million of the $107.4 million — is not distributed by enrollment. It is used to speed up the phase-in of Colorado’s new school finance formula, which shifts funding toward districts the new formula favors. Only the remaining $1.9 million is split by each district’s share of statewide total program funding.

That produces results that look strange side by side. From the same table:

Academy 20 has more than four times D38’s total program funding and receives about half as much. It is not a mistake, and it is not about size. Districts already close to what the new formula would give them get very little acceleration money; districts the new formula lifts substantially get a lot.

D38’s share of statewide total program funding is about 0.67%. Applied to the whole $107.4 million, 0.67% would be roughly $722,000. D38 receives a third of that in year one because the acceleration money is not distributed on that basis. As the new formula finishes phasing in and more of the positive factor is distributed by total-program share, D38’s share should move toward the higher figure — but the fiscal note does not publish district estimates beyond FY 2026-27, so that is a direction, not a number.

Four things it can be spent on

The bill is specific. A district “shall only expend its positive factor to” increase teacher pay, improve teacher retention, lower class sizes, and increase access to career and technical courses. Districts also have to post online how they spent it.

This is worth sitting with, because it is the part most likely to be misread locally. D38’s 2026-27 budget closed a $2.9 million gap largely with about 35 positions, and drew the general fund reserve from $13.7 million two years ago to roughly $6.0 million. Proposition NN money could not rebuild that reserve. It could not cover facilities, transportation, or administration. It is restricted to compensation, retention, class size, and CTE.

It also does not come out of anything else: the positive factor sits outside a district’s total program, so it does not reduce the state share or change local property tax obligations.

The honest caveats

It depends on there being a surplus. Proposition NN does not create revenue. It only changes what happens to revenue above the Referendum C cap. Legislative Council Staff projected surpluses of $136.1 million in FY 2026-27 and $969.7 million in FY 2027-28, which is enough to fund the positive factor in both years. There is no state revenue forecast past FY 2027-28. In a year when the surplus falls short, the bill defers the unpaid portion to be made up later when revenue allows — a promise to pay, not a payment.

The figures are estimates tied to other bills. The $241,240 comes from the April 28, 2026 revised fiscal note, which assumes passage of the School Finance Act (SB26-023) as amended and HB26-1357. Legislative Council Staff flagged that the district numbers may change if those change. That fiscal note also analyzes an earlier draft than the one that finally passed — the version voters will see added the requirement that at least half the account go to K-12. The positive factor amounts, including D38’s, are paid first under either version.

Ten years, then a plateau. The 2% increase compounds annually — each year adds 2% of the state share on top of the prior year’s positive factor — through FY 2034-35, then holds at that level rather than continuing to grow.

What it does not do

Proposition NN is a state measure about state revenue. It would send D38 a modest, restricted, and probably growing amount of money for teacher pay and class sizes. It would not change D38’s enrollment trend, its per-pupil revenue, its reserve position, or its override authority, all of which are local questions with local answers.

Both can be true, and voters here will likely be asked about both.

The counterargument

Supporters, including bill sponsor Sen. Jeff Bridges and the Colorado Education Association, argue the measure directs money the state already collects to schools without asking anyone to pay a dollar more. Opponents, including Rep. Rebecca Keltie, call it a spending program built on revenue assumptions that may not hold — and the fact that there is no forecast beyond FY 2027-28 is a fair thing to point at.

There is also a straightforward objection that has nothing to do with schools: money retained under Proposition NN is money not refunded to taxpayers. Whether that trade is worth it is a judgment, not a calculation, and it is the actual question on the ballot.

Sources

• SB26-135 (rerevised), State Public K-12 Education Funding — bill text
• SB 26-135 Fiscal Note, Fourth Revised Note, Legislative Council Staff, April 28, 2026 (district table in Appendix A)
• Ballotpedia — Colorado Proposition NN, TABOR Revenue Cap Increase for K-12 Education Measure (2026)
• Colorado Department of Education — Total Program Funding fact sheet, 2025-26