State Education Fund Report (2016)

The forecast for the State Education Fund and the level of General Fund appropriations needed to pay for school finance has changed from when the General Assembly adjourned in May 2015. Property values grew rapidly in 2015, and are expected to continue to grow over the next few years, helping to boost the local contribution to school finance. In contrast, expectations for income taxes have fallen, decreasing projected deposits into the State Education Fund and the General Fund. This report assumes the 2016 supplemental school finance bill is adopted, the value of the negative factor remains at $831 million, and the balance in the State Education Fund is reduced to $100 million in FY 2016-17 and beyond. As a result, General Fund support for school finance will need to increase 8.3 percent and 8.1 percent, respectively, in the next two budget years. This entails year-over-year increases in General Fund support for school finance of $273 million in FY 2016-17 and $291million in FY 2017-18.