Final
Overview of State Education Fund
SCHOOL FINANCE SYSTEM
Votes:
Action Taken:
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11:24 AM -- Overview of State Education Fund
Deb Godshall, Assistant Director, Legislative Council Staff, came to the table to provide an overview of the State Education Fund for the committee. She provided a handout (Attachment H). Ms. Godshall explained that the State Education Fund was created by Amendment 23 and receives revenue from one-third of one percent of taxable income and also keeps any interest that the fund earns. Money in the fund, she said, can be spent on meeting the school finance funding requirement in Amendment 23, meeting the minimum funding requirement for categoricals, and for other purposes enumerated in Amendment 23. She noted that moneys began flowing into the fund on December 28, 2000, and were first appropriated from the fund in fiscal year 2001-02. She remarked on forecasting revenues to the fund and expenditures from the fund. Referring to the handout, Ms. Godshall discussed the estimated fund balance. She remarked on the relationship between the General Fund and the State Education Fund. She noted that all of the numbers on the handout through 2004-05 are actual. The estimated fund balance at the close of the current fiscal year, she said, is $181.8 million. Ms. Godshall provided further clarification regarding the handout to the committee.
11:31 AM
Ms. Godshall responded to questions from the committee, including questions regarding the estimated fund expenditures in fiscal year 2010-11, which appear to be a substantial increase compared to other years.
11:37 AM
Ms. Godshall continued responding to committee questions regarding her handout. She commented on the need for the General Fund to make up education funding when the balance of the State Education Fund is not large enough to fill the funding need. She commented on the estimate of total school spending, noting it is a combination of projections of per pupil counts and inflation. Estimates of total state aid, she said, would take into account projections for assessed value. Ms. Godshall talked about interest earned by the fund if there is more money in the fund over a longer period of time. She described the relationship between the fund and the General Fund, noting that if there is insufficient money is the fund, funding obligations must be met using General Fund dollars.
11:45 AM
Ms. Godshall continued her responses to committee questions, commenting on the estimated spike in spending in fiscal year 2010-11. She noted that the difficulty with looking at the State Education Fund, and where we should be, is that it is not being measured toward a target.