Your property taxes went up. Why didn't the school's budget?

Colorado decides how much money each school district gets. Not Telluride, and not Telluride's property values.

The State runs a formula that sets a dollar amount for every district. Local property taxes pay into that amount first, and the State pays whatever is left. When Telluride property values rise, local taxes cover more of the amount and the State pays less. The amount itself does not change by a single dollar.

So the property-tax increases you have seen in recent years did not grow the school's budget. They changed who was paying for it. The one thing that does grow the budget is a voter-approved mill levy override, which is what Ballot Measure 5A is.

There is a second problem. In 2024 the State rewrote the formula, and under the new version Telluride's amount goes down 17.7% per student by the time the change is complete. Because our existing override is a percentage of the State's amount, it shrinks too. 5A raises the override so the district loses less.

The four steps below walk through how that works, with sources.

Every Colorado school district's core budget comes from one law, the Public School Finance Act of 1994. The amount it produces for a district is called Total Program Funding. Think of it as the size of the district's bucket.

The formula starts with the same base amount for every student in Colorado, $8,692 in 2025–26, and then adds money for local conditions: how expensive it is to live and hire staff there, how small the district is, how remote it is, and how many students need extra support.

For Telluride in 2025–26 that worked out to about $16,600 per student. Multiply by the district's funded student count of roughly 806 (a multi-year average) and the bucket is about $13.4 million (Browne, Telluride Times).

That is the ceiling. The district cannot spend more than the State's number through the regular formula, no matter what happens to home prices in town.

The State does not write Telluride a check for $13.4 million. It tells the county to collect school property tax at a set rate first, then sends only the difference (Legislative Council Staff, School Finance in Colorado). Colorado calls the local part the local share and the State's part the state share.

Here is Telluride's bucket for 2025–26 (Browne):

What happens when your assessment goes up. The county collects more local tax. The State's top-off gets smaller by the same amount. The bucket stays $13.37 million. If local taxes ever exceed the State's number, the State pays nothing, and the district still cannot keep the extra under the regular formula.

This is by design. Colorado built the system in 1994 to equalize funding between wealthy and poor districts, so a district's budget would not depend on its property values (Legisource, School Finance 101). Telluride already covers about 92% of its own bucket. Rising values move that toward 100%, and nothing more.

The one exception: a mill levy override. Voters can approve a property tax on top of the State's number. That money stays in Telluride and is the only local lever that actually grows the budget. Telluride voters approved an override years ago, currently set at 30% of the bucket, which brings in about $4 million a year (Browne). Step 4 explains why that number is now shrinking.

In 2024 the legislature passed House Bill 24-1448, the first rewrite of the school formula in 30 years. The legislature finalized the details in 2025 with House Bill 25-1320. The new formula sends more money to districts with many at-risk students and less to small, high-cost mountain districts (Legislative Council Staff overview memo). Telluride is the second kind.

Three changes do most of the damage to Telluride. Figures are per student at 2025–26 rates, from the Colorado Department of Education's comparison worksheet (see How the State formula cuts Telluride's funding, the one-page PDF):

The phase-in hides the cut for now. The State is blending old and new: 18% new formula in 2025–26, 34% in 2026–27, 50%, 66%, 82%, and 100% by 2030–31 (LCS memo). Districts that lose money get a temporary "hold harmless" cushion through 2029–30. When the cushion ends, the district's forecast puts Telluride at $16,123 per student under the new law versus $19,581 under the old one: a cut of $3,458 per student, or 17.7% (Telluride R-1 Finance Forecast, August 2026).

The district has already started absorbing it. Telluride R-1 did not replace its drama teacher who retired, and the superintendent told the Telluride Times the district's "backs are against the wall" (Telluride Times, May 2026). The new formula also shortens the enrollment averaging the district relied on while its student count declines, from 910 students in 2018–19 to 752 in 2025–26 (district forecast, May 2026).

A mill levy override is written as a percentage of the State's number, not a fixed dollar amount. Telluride's is 30%. That was the legal maximum until the 2024 law, which lets districts hurt by the new cost-of-living cap ask voters for up to 50% (Colorado School Finance Project briefing).

Because it is a percentage, the override falls when the bucket falls. 30% of a smaller number is a smaller number. The district's forecast shows the full effect per student in 2031–32, when the State's cushion is gone (Telluride R-1 Finance Forecast, August 2026):

5A does not grow the budget. It limits the cut, from $4,495 per student to $1,270. Even with 5A, the district ends up with less per student than it has under the old law.

What happens either way. The district's forecast assumes it must cut about $2.76 million over seven years even if 5A passes, equal to roughly 27 positions, or 19% of current staff. If 5A fails, the cut roughly doubles to $5.5 million, at least 55 of 142 positions, or about 40% of staff (district forecast, May 2026, at 2.8% annual expense growth).