School Finance Act

     The bill:

• Increases the statewide base per pupil funding for the 2026-27 budget year by $217.30 $208.60 to account for inflation;
• Sets a new statewide base per pupil funding amount for the 2026-27 budget year at $8,909.10 $8,900.40 ; and
• Sets the total program funding for the 2026-27 budget year at $10,209,589,888 $10,189,918,642 .

      Under current law, there is a school transformation grant program. A grant recipient may use the grant award for various statutorily-specified purposes. For one of the statutorily-specified purposes, the bill specifies the rigorous redesign strategies for which a grant recipient may use the grant award.

      Under current law, there is a financial reporting fund, and the state treasurer is required to annually transfer $3 million from the state education fund to the financial reporting fund to offset costs incurred by the department of education for creating and maintaining a website that explains major categories in the chart of accounts for local education providers. Under current law, the fund and the annual $3 million transfer requirement are scheduled to repeal on July 1, 2026. The bill exempts from repeal the general assembly's legislative declaration that using state education fund money for maintaining the website is a permissible use of state education fund money.

      Under current law, there are 2 total program formulas to finance public schools, commonly referred to as the old formula and the new formula. For the 2026-27 budget year, a district's total program is the greater of:

• The district's total program amount for the 2024-25 budget year; or
• The amount calculated for the 2025-26 budget year under the old formula plus an amount equal to 30% of the difference between the amounts calculated between the old formula and the new formula.

      The bill clarifies that for the 2026-27 budget year, if the calculation under the new formula is less than the calculation under the old formula, then that district's total program for the 2025-26 budget year is the greater of:

• The district's total program amount for the 2024-25 budget year under the old formula; or
• The amount calculated for the 2026-27 budget year under the old formula.

      Current law is scheduled to repeal a statute that authorizes contingency reserve fund payments to be used for rural or small rural school districts if an unusual financial burden would be caused by the withholding of local property taxes due to a delay in filing the audit report due to extraordinary problems that could not have reasonably foreseen or prevented by the rural or small rural school district. The bill repeals the scheduled repeal, resulting in a continuation of the authorization of contingency reserve fund payments.

      Under current law, there exists postsecondary and workforce readiness sustain funding. Eligible local education providers receive reimbursements for students who, in the preceding year, successfully satisfied postsecondary credit, received an industry-recognized credential, or satisfied certain work-based learning requirements. The bill changes the word 'reimbursement' to 'distribution' as applicable in the statute.

      Under current law, a service retiree who is a superintendent, principal, teacher, or other specified school employee may receive salary without a reduction in public employees' retirement association (PERA) benefits if the service retiree meets specified conditions. The bill adds an assistant superintendent, a vice principal, and an assistant principal to the eligible list.

      Under current law, there are requirements for determining the district of residence of a child with a disability. The bill authorizes the state board of education to adopt rules that are necessary to determine a child's district of residence for a circumstance that is not described under law.

      Under current law, $500,000 must be distributed to administrative units that enroll children with disabilities. The bill requires that $1 million must be distributed to fund reimbursements for administrative units that pay tuition or education expenses that ensure a free appropriate public education for a student in out-of-home placement.

      Under current law, each participating school food authority that satisfies certain requirements is eligible to receive a local food purchasing grant and an amount to increase wages or stipends for individuals employed to prepare and serve school meals. The bill clarifies that a charter school that operates under a participating school food authority is eligible for the awards.

(Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.)


(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)