New public school funding adjustments adopted

Lawmakers passed a bill May 15 that adjusts the state aid funding formula for public schools under the Tax Equity and Educational Opportunities Support Act (TEEOSA).

LB407, introduced by Cedar Rapids Sen. Kate Sullivan, reduces the base limitation rate for school districts from 2.5 percent to 1.5 percent for the 2013-14 school year. The rate will revert to 2.5 percent for each subsequent school year.

The bill includes additional changes to the funding formula, including:
• a base limitation rate of 1.5 percent for fiscal year 2013-14 and 2.5 percent thereafter;
• a local effort rate of $1.03 for FY2013-14 and FY2014-15 and $1.00 thereafter;
• an averaging adjustment threshold equivalent to the average basic funding for all school districts with 900 or more formula students;
• a teacher education allowance of $30 million with distribution based on teacher education points;
• 50 percent of teacher education allowance paid as teacher education aid;
• an instructional time allowance of $20 million with distribution based on the average days in session in excess of 175 days multiplied by formula students;
• 50 percent of instructional time allowance paid as instructional time aid; and
• 2 percent additional budget growth with 75 percent board approval with the expenditures included in the general fund operating expenditures for FY2013-14 only.

The bill eliminates the local choice adjustment beginning in FY2013-14 and limits the summer school allowance to reported summer school expenditures that are not included in other allowances. It also clarifies that expenditures included in the poverty and limited English proficiency allowances cannot be included in other allowances.

Additional budget authority for early childhood education will be included in the calculation of TEEOSA aid when programs move away from grant funding. Voluntary termination agreements will be excluded from the budget, but only when districts can prove a net savings in salary and benefits over a five-year period.

The bill passed on a 47-0 vote.