Date: 01/22/2014

Final
Presentation on School Finance

COMMITTEE ON JOINT EDUCATION

Votes: View--> Action Taken:
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11:10 AM -- Presentation on School Finance

Todd Herreid, Legislative Council Staff, and Craig Harper, Joint Budget Committee staff, came to the table and introduced themselves to the committee. Mr. Herreid explained that they would be presenting on school finance and the SEF. They distributed a handout to the committee (Attachment A). Mr. Herreid talked about the sources of funding for K-12 that come from state and local sources. He explained that state sources, including income and sales tax revenue, account for 65 percent of K-12 funding, and local sources, primarily property tax revenue, account for 35 percent. Mr. Herreid discussed K-12 funding trends and the history of the Negative Factor. Representative Hamner asked Mr. Herreid and Mr. Harper to further explain the Negative Factor. Mr. Harper talked about the federal funds that districts receive for specific uses such as funding special education and ELL programs, and about the year-over-year increase in the Governor's budget request for K-12 funding.

14JTEd0122AttachA.pdf14JTEd0122AttachA.pdf

11:26 AM

Mr. Herreid explained that the Governor's budget request includes a small reduction in the Negative Factor. He talked about the $1.1 billion transfer from the General Fund surplus into the SEF in December 2013, and explained that any supplemental increase in funding to K-12 education this year will decrease the General Fund surplus that can be transferred into the SEF. He talked about the allowed uses of SEF funds and the anticipated balance in the SEF at the end of FY 2013-14. Representative Priola asked how the SEF is funded, and Mr. Herried responded that it is funded by income tax deposits, one-time General Fund surplus transfers, and a one-time refinancing of the Fire and Police Pension Association.


11:35 AM

Mr. Harper reviewed several options for school finance funding in FY 2014-15, including maintaining a flat Negative Factor, reducing the Negative Factor, and eliminating the Negative Factor. He discussed one-time versus on-going funding options and the impact of each on General Fund commitments.


11:49 AM

Senator Johnston asked how much is in the SEF reserve fund, and about the annual contributions to the fund through income tax deposits. Mr. Herreid and Mr. Harper answered questions from the committee about the Negative Factor, past transfers from the General Fund to the SEF, the State Public School Fund, projected General Fund growth, and early literacy assessment tools.


12:04 AM

The committee adjourned.