On Monday, June 22, the five-member Board of Education will gather at the district’s administration office on North Jefferson Street in Monument, take public comment, and then decide whether to adopt a spending plan built around a single, stubborn fact: the district is shrinking.
The proposed D38 budget for 2026-27, presented by chief business officer Brett Ridgway at a June 2 work session and posted for public inspection on the district’s financial-transparency page, projects enrollment at the district’s own schools falling by 164 students next year, to about 5,015. That continues a long slide: operated-school enrollment has dropped roughly 880 students — nearly 15% — from its 2018-19 peak of 5,895. Because Colorado funds schools per pupil, fewer pupils means fewer dollars.
Fewer children, flat dollars
Under Colorado’s School Finance Act, the money follows the student. The district’s funded pupil count is set to fall by 157.5, and per-pupil revenue is essentially frozen at $11,125 — up a token $1.75 from this year. The two forces together cut the district’s total program funding by about $1.74m, or 2.5%, to $67.2m. The general fund itself is presented in balance at $53.3m of revenue and $53.3m of spending, but only after the cuts described below.
| The budget at a glance | 2025–26 | 2026–27 (proposed) | Change |
|---|---|---|---|
| General-fund spending | $56.1m | $53.3m | −$2.8m |
| Total program funding | $68.9m | $67.2m | −$1.7m |
| Funded pupil count | 6,197.9 | 6,040.4 | −158 |
| Per-pupil revenue | $11,123 | $11,125 | +$2 |
| Per-pupil spending (general fund) | $11,454 | $11,242 | −$213 |
| Total mill levy (rate) | 37.5 | 36.0 | −1.5 |
| Year-end general-fund reserve | $6.0m | $6.0m | flat* |
*Reserves had already fallen from $13.7m two years earlier; the 2026-27 plan is balanced, holding the year-end fund balance near $6.0m. Regular staffing is set to fall by roughly 35 positions, and the average employee pay change is 2.03%. Source: D38 2026-27 proposed budget.
Mr Ridgway’s budget calls this exercise “right-sizing,” and it is unusually candid about the human arithmetic. Holding pay roughly flat and trimming supplies was not enough; the district needed about $2.9m in savings to offset the lost revenue and still fund a modest raise. Roughly 35 regular positions will go — about one job in twenty-three. Because elementary schools are absorbing most of the enrollment loss, they shoulder about two-thirds of the reductions; Lewis-Palmer Elementary alone is projected to lose 40 pupils, more than a tenth of its roll, and Palmer Lake Elementary about one in twelve. Lewis-Palmer Middle School is the lone school projected to grow.
The cuts are specific. The district plans to eliminate all new-hire signing bonuses (about $194,000) and all retention and qualification payments for special-education staff (about $302,000), while keeping the positions themselves. It will not refill the executive director of student services or a literacy coordinator, and it trims a gifted-and-talented facilitator to part time. What remains for employees is an average pay increase of 2.03% — front-loaded toward hourly classified staff (2.77%) and lighter for teachers (1.90%) and administrators (about 1.1%). That is a marked deceleration: the same categories averaged roughly 6% two years ago and 12% three years ago.
The property-tax paradox
Here is the part most homeowners will find counter-intuitive. The total D38 mill levy is falling, from 37.500 to 36.000 mills. Yet because assessed property values in the district jumped 16.5% — to just over $1.085bn — the property taxes actually collected will rise about 11.9%, to roughly $39.1m.
So residents will pay more even as the rate drops. But the district will not see a windfall, because of how the School Finance Act works: when local property-tax revenue rises, the state’s “equalization” share falls by almost exactly the same amount.
The extra money Monument and Palmer Lake homeowners send in mostly replaces money the state would otherwise have sent — leaving D38’s bottom line roughly flat. Rising home values, in other words, shift the bill from Denver to local taxpayers without enlarging the school’s budget.
A second feature of the levy is worth flagging for any future override debate. D38’s voter-approved mill-levy override is fixed in dollars — about $4.0m a year — rather than indexed to inflation or enrollment. As property values have climbed, the override now requires only 3.685 mills to collect, down from more than 9 mills in 2007, and the district is capturing only about 23% of the override revenue state law would allow. By the budget’s own reckoning, D38 is levying just 50% of its “potential” — the lowest share in the eighteen years the document tracks. The district is, quite deliberately, leaving several million dollars a year on the table.
A bet on health care
The budget’s boldest move is one few residents will notice on a tax bill: D38 is walking away from CEBT, the statewide trust that has long pooled its employee health insurance, and self-funding its own plan. The new design, assembled with broker Five|50 Advisory, puts a Direct Primary Care membership in front of a tiered PPO — Employers Health Network providers in Tier 1, the First Health (Aetna) network in Tier 2 — and buys the pieces (claims processing, stop-loss insurance, concierge support) separately rather than as a bundle.
The pitch is striking: a projected cost of about $4.0m against a CEBT renewal quote of $5.3m, a saving the district calls “staggering,” and enough to hold the district’s health-benefit cost increase at 0.0% for the year.
The risk is equally real. Self-funding means D38 — not an insurer — now carries the cost of its employees’ claims, capped only by stop-loss coverage (set at 125% of expected claims in aggregate and $175,000 per individual). Part of this year’s savings is earmarked to “seed” a reserve against bad years. It is an aggressive play for a district of about 800 employees, only 432 of whom currently take the plan; whether it pays off will not be clear until the claims come in.
A thinning cushion
The cuts and the candor share a backdrop: D38 has been spending its savings. The general fund’s reserve has fallen from $13.7m in mid-2024 to $9.7m a year later and to a projected $5.96m by mid-2026 — a drawdown of about $7.7m in two years. The district attributes the larger, $3.7m deficit of the current year to a one-time, capital-related expense the budget labels “CIC” — the district’s Career & Innovation Center, its career-and-technical-education facility — and the 2026-27 plan is balanced, so the cushion holds at roughly 11% of spending. But that is down from more than 25% two years ago, and the budget warns that the squeeze is not over: even if enrollment merely holds flat, the way Colorado averages pupil counts over several years means another funding decline is baked in for 2027-28.
The wider weather
D38’s troubles are partly local and partly Colorado’s. Statewide, districts dodged the worst this spring: Governor Jared Polis signed the 2026-27 School Finance Act on May 28, directing about $10.2bn to K-12 schools — roughly $180m more than the prior year — and lawmakers avoided across-the-board cuts even while closing a state budget hole estimated at well over $1bn. But the relief is fragile. At the June 2 work session, Mr Ridgway flagged the possibility of a mid-year “rescission” in early 2027 — a state clawback of money already sent to districts — if Colorado’s revenue falls short, with clarity unlikely before the legislature reconvenes late in 2026, as Our Community News reported. State law already contains a trigger: if the education fund is projected to dip below $200m, lawmakers must apply a “smoothing factor” or adjust the funded pupil count — either of which would land on districts like D38.
For perspective, D38’s per-pupil funding sits well below national norms. The U.S. Census Bureau reported average current spending of $17,619 per pupil nationally in fiscal 2024; D38’s School Finance Act funding of $11,125 per pupil is closer to the bottom-spending states such as Idaho and Utah. The measures are not identical — the Census figure counts all current spending, not just formula revenue, and Colorado is a comparatively low-spending state — but the gap is real, and it frames every choice in this budget.
Meanwhile, the charter grows
One part of D38 is moving the other way. Monument Academy, the district’s charter school, is projected to add students next year and now educates about 1,166 children — roughly 19% of the district, up from 14% a decade ago. Its separately adopted $37.5m budget includes financing for an estimated $11m performing-arts center. As the neighborhood schools contract, the charter’s share of D38 keeps rising — a divergence worth watching in its own right.
What happens June 22
The hearing begins at 6 p.m. at the administration office, 146 N. Jefferson Street, and the board is expected to vote on adoption immediately afterward, as the public notice specifies. Colorado law requires districts to adopt a budget before the fiscal year begins on July 1, and any resident who pays school taxes in District 38 may file an objection at any point before the vote. Board president Ron Schwarz and Superintendent Amber Whetstine have backed the plan; barring a surprise, it is likely to pass. The harder questions — how long reserves can keep bridging a falling roll, and whether the health-insurance gamble pays — will outlast the meeting.
Sources and further reading
- Lewis-Palmer School District 38, 2026-27 Proposed Budget (May 18, 2026), 282 pp. — primary source for all district figures. District financial-transparency page.
- Lewis-Palmer School District 38, public notice, D38 Budget Hearing, June 22, 2026 (via Our Community News calendar).
- Our Community News, “D38 Budget Presentation, June 2,” June 14, 2026.
- Colorado Public Radio, “Colorado lawmakers avoid big cuts to education in 2026-27 budget.”
- The Colorado Sun, “Colorado schools avoid budget squeeze while voters decide future of education funding,” May 29, 2026.
- Chalkbeat Colorado, “Colorado school budget unclear despite School Finance Act’s early filing,” Jan. 30, 2026.
- Colorado General Assembly, HB25-1320 School Finance Act; Colorado Department of Education, Public School Finance Act overview.
- U.S. Census Bureau, “Public School Spending Per Pupil Reaches Historic High in 2024” ($17,619 national average, FY2024).
- District board agendas and minutes: Lewis-Palmer BoardDocs.
Methodology
All district financial figures — enrollment, per-pupil revenue, mill levies, fund balances, staffing changes and health-plan projections — are drawn directly from D38’s 282-page proposed 2026-27 budget document dated May 18, 2026, and were cross-checked for internal consistency (for example, the all-funds total of about $80.0m reconciles with the district’s own fund-financial summary). Year-over-year percentages were calculated from the budget’s stated values. Statewide context and the national per-pupil comparison come from the secondary sources listed above; the U.S. Census “current spending per pupil” measure is broader than Colorado’s School Finance Act per-pupil revenue and the two are not strictly equivalent. The possible 2027 state “rescission” reflects remarks attributed to the chief business officer at the June 2 work session and remained, at publication, a contingency rather than a confirmed action. The Monument Independent sought no comment beyond the public record for this preview; figures will be updated if the board amends the budget before adoption.