Although most of the key decisions on K-12 education issues are not expected to be made by the Joint Finance Committee (JFC) until next week, a decision coming up on Thursday could have a profound impact on K-12 school funding options for the next two years.
JFC members are set to take up a budget issue paper (Paper #595) prepared by the non-partisan Legislative Fiscal Bureau that outlines several alternative uses for funding included in the proposed budget to increase the School Levy Tax Credit. Historically, this credit is used to reduce tax bills in December of one year but is paid out in July of the following year, which moves the payment into the state’s next fiscal year.
Note: In a WASB Legislative Alert that went out last week, we noted that there is funding already in the proposed budget that could be used to increase resources for schools. The $211.2 currently allocated to increase this credit is one of the main sources of funding we were referencing.
The paper outlines four options as well as the property tax impact of each option on the hypothetical “median-valued” state home. Options include:
- Approving the governor’s recommendation as is (i.e., increase the school levy tax credit distributions by $105.6 million annually);
- Replacing the governor’s proposal with a new plan to direct an equivalent amount ($105.6 million annually) toward property tax relief aid for technical college districts;
- Replacing the governor’s proposal with a new plan to increase the general school aids appropriation by an equivalent amount ($105.6 million annually); and
- Modifying the governor’s recommendation in a way that would not affect property taxes but would make $105.6 million available for other purposes in 2016-17 by delaying the payment date of these monies. This option would increase the state’s deficit under generally accepted accounting principles (GAAP) by an estimated $80.2 million.
School leaders should urge JFC members to support reallocating this funding for K-12 public education.