Denver Public Schools is sketching out some grim "what if" plans as state lawmakers debate how much money districts will get next year. At a board meeting on Thursday, finance leaders warned that depending on what happens at the Capitol, DPS may have to ask voters for a tax increase, cut central-office spending by about 10%, or even revisit school closures. Superintendent Alex Marrero told board members that small schools with dwindling enrollment could once again face consolidation if revenue drops.
As reported by The Denver Gazette, DPS Chief Financial Officer Chuck Carpenter told the board that "the state volatility is incredibly real" and that his team has laid out responses that range from a mill-levy ask to a 10% cut at central office. The district's mill levy is currently about 25 percent, below the state cap of 29 percent, leaving some room to raise local taxes, but only if voters approve. Marrero also signaled he may ask the board to revisit its three-year moratorium on school closures, pointing to several schools that now serve fewer than 215 students.
Enrollment is at the heart of the squeeze. As Denver7 reports, DPS saw an estimated 1,300-student drop this year, a decline district officials say will cost roughly $18.5 million in state funding. Fewer students, combined with the possibility of reduced federal grant support, means fewer dollars for classrooms and staff raises. That one-two punch is why finance officials say they are drawing up contingency plans now instead of waiting for final numbers.
The pressure is intensified by proposals circulating at the statehouse. The Colorado Sun has reported that Gov. Jared Polis has floated a change to how vehicle-registration, or specific ownership, tax revenue is counted in the school funding formula. Denver leaders warn that the shift could effectively trim what local districts keep. DPS officials estimate that about $24 million of that tax revenue was not counted as local share this year; Carpenter cautioned that losing access to that level of funding would equal roughly 1 to 2 percent of the district's general fund and would almost certainly require trade-offs in staffing and programs.
Debt Load Limits DPS Wiggle Room
A Denver Gazette review of district audits shows DPS has reported a negative unrestricted net position for about two decades, with roughly $3.7 billion in assets and about $4.2 billion in liabilities. That imbalance limits how nimbly the district can respond when state dollars move up or down. The analysis notes that long-term borrowing, including voter-approved bonds and certificates of participation, makes up most of those obligations, while pension costs are a smaller share. Outstanding bond debt and COPs together add up to several billions, and district leaders say that leverage, plus a legal challenge over how some leases are structured, further narrows their options when revenue is uncertain.
Budget Math And What Families Should Watch
According to an official DPS finance update, the district's operating budget clocks in at roughly $1.5 billion. DPS has highlighted that it recently balanced its budget and received a clean audit, but cautions that falling enrollment and any reduction in state or federal funding would still mean tough choices between classroom spending and central services. District staff says they plan to bring detailed budget scenarios to the board as part of the regular spring budget process.
For Denver families, that means the next several weeks could bring either clarity or more questions. The school board will be asked to weigh staff recommendations, and the community may see proposals for a mill-levy ballot question or specific cuts. Officials say any decisions will be rolled out in public meetings so parents and taxpayers can see exactly where dollars could be added or trimmed.
