K-12 districts across metro Denver are laying off employees, closing schools and dipping into their reserves as they continue to face budget deficits amid falling student enrollment and rising costs.
School systems began curtailing their spending last year by pulling back on staff raises, but now they are taking more drastic measures — marking a period of retrenchment that administrators say is likely to continue for the foreseeable future.
“This is probably the first of a number of difficult budget years because the state of Colorado simply can’t invest in K-12 — not to say that (the state) really invested in K-12 over the last number of years either,” said Scott Smith, chief financial officer for Cherry Creek Schools, during a school board meeting last week.
The K-12 budget crunch stems from the fact that enrollment is falling nationwide as fewer people have children and rising housing costs change where families live.
Generally, districts receive less money from the state when there are fewer children in their classrooms. The state uses a mechanism called averaging to determine how much money individual districts receive and to soften the impact of declining enrollment.
This year, Colorado used a three-year enrollment average, a change from last year’s four-year average. The change in how the state counts students is affecting districts’ bottom lines, and education officials are concerned about the state’s ability to implement the funding formula in the future given the government’s own budget constraints, officials who spoke to The Denver Post said.
While districts didn’t seeing a decrease in state funding this year, some, such as the Sheridan School District, are receiving the same amount of money they did two years — which is a problem because the dollars that districts do receive aren’t stretching as far as they used to, as costs for health insurance, fuel and other expenses have increased, said Tracie Rainey, executive director of the Colorado School Finance Project.
“Every district is facing very different challenges,” she said. “They are very unique to every community.”
Democratic state legislators hope voters will approve a ballot measure in November that would exempt K-12 education funding from the spending cap set by the Taxpayers’ Bill of Rights, which would increase education funding by giving the state a $4.5 billion buffer before it needs to refund money.
Several metro Denver school districts have recorded deficits in recent years, using money they had saved in their reserves to balance their budgets. But district officials said they can’t continue to rely on those savings to make ends meet.
As a result, Jeffco Public Schools and Cherry Creek Schools began cutting jobs this year, slashing 139 and 159 positions, respectively. Adams 12 Five Star Schools eliminated roughly 150 positions in 2025.
Cherry Creek will reduce about $23 million via the cuts, a move that enabled the district to balance its roughly $846 million budget without using reserves.
Jeffco Public Schools, the state’s second-largest district, has spent most of the school year implementing a plan to trim $45 million, which included laying off 50 employees this month and cutting 89 unfilled positions.
The district expects to use $13 million from its reserves to balance the 2026-27 budget, an improvement from the $49 million deficit Jeffco ran last year. Jeffco Public Schools’ budget is nearly $1 billion.
“We are doing the work to live within our means, we’re making financially responsible decisions, and yet the declines in enrollment are so great that we continue to grapple with it,” outgoing Superintendent Tracy Dorland said.
Jeffco Public Schools leaders are hoping voters will approve a $15 million mill levy override in November that can increase funding for the district. Otherwise, the district will have a second round of reductions, Dorland said.
The Douglas County School District, the state’s third-largest K-12 system, will close three elementary schools at the end of the month in an effort to save money. Still, the district will operate at a $22 million deficit next year because leaders plan to give staff 2% raises.
The Douglas County district saved money during the pandemic when schools struggled to fill staffing shortages, which is now enabling it to increase employee wages — a priority in recent years —by dipping into those reserves, Chief Financial Officer Jana Schleusner said.
However, the district can’t continue to use the money stashed away and is planning to slash between $15 million and $18 million — cuts that are likely to include jobs — in the 2027-28 fiscal year, she said.
“This is probably about the last year to use our reserves to stay where we are,” Schleusner said. “…As a nation, our demographics are changing. People aren’t having as many kids.”
Denver Public Schools, the state’s largest district, was able to balance its billion-dollar budget for next year without using reserves. But district officials expect to begin running a deficit by the 2027-28 academic year, according to the latest projections.
The district is facing a cumulative four-year deficit of $28 million between the 2027-28 and 2030-31 fiscal years, according to a presentation district officials gave the Board of Education in May.
“We can’t continue to do everything we are doing when we have substantially fewer children,” DPS Chief Financial Officer Chuck Carpenter said.
The district’s financial outlook for the next four years “is something to be concerned about,” he added.
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