State Education Fund Report (2014)

The forecast for the State Education Fund and the level of General Fund appropriations needed to pay for school finance have changed from when the General Assembly adjourned in May 2013. Property values have stabilized and are expected to grow modestly over the next few years, helping to boost the local contribution to school finance. Similarly, income tax receipts are growing faster than anticipated, increasing deposits into the State Education Fund and the General Fund. In addition, House Bill 12-1338 has increased the funding capacity from the State Education Fund, given the transfer of $1.1 billion from the General Fund to the State Education Fund in December 2013. Assuming the 2014 supplemental school finance bill is adopted and the balance in the State Education Fund is gradually reduced to $400 million1 by the end of FY 2017-18, General Fund support for school finance will need to increase 3.7 percent annually under current law, or by $110 million in FY 2014-15, to reach the targeted ending balance. Increases in total program funding above the current law amount will require corresponding more General Fund support to achieve a $400 million ending balance in the State Education Fund.