JFC Budget Includes Incentives for Consolidation, Shared Grades/Services

The state budget package approved by the Joint Finance Committee (JFC) also includes funding to provide incentives for school districts to consolidate, share whole grades, and share administrative services.

Consolidation Aid–The JFC-approved K-12 package creates a new sum-sufficient (state moneys will be provided sufficient to fully fund aid demands) appropriation to provide categorical aid funding for two or more school districts that consolidate into one district. Districts could qualify for aid equal to $150 per pupil attending school in the consolidated district for the first five years after the consolidation. In the sixth year the district would qualify for 50% the fifth year amount.  In the seventh year, districts would qualify for 25% of the fifth year amount.  (Categorical aid is received outside the revenue limits.)

This aid would be available to districts where the consolidation takes effect beginning July 1, 2019, or thereafter, and the current consolidation aid provisions (higher cost ceilings, guarantees under the equalization aid formula, revenue limit adjustments) would no longer apply.  Districts that consolidate prior to that date would continue to receive additional equalization aid and the related revenue limit adjustment as under current law. Current law special adjustment aid provisions would continue to apply to all consolidated school districts, meaning the consolidated district’s general school aids cannot be less than the total aggregate state general school aids received by the consolidating school districts in the school year prior to consolidation.

Whole Grade Sharing–The JFC plan provides $750,000 beginning in 2018-19 for this new aid program. Under current law, two or more school districts can enter into a whole grade sharing agreement to consolidate pupils in a particular grade level by offering that grade in only one of the participating districts.  The new aid program would provide aid equal to $150 per pupil enrolled in a grade included in a whole grade sharing agreement for the first four years of the agreement and 50% of the first year’s aid in the fifth year. No funding would be received in the sixth year and thereafter.

The above aid payment schedule applies to original whole grade sharing agreements only and not agreements that have been extended or renewed. Further, the DPI must consider a whole grade sharing agreement between school boards that contains substantially similar terms to an expired agreement, including that the same grades are part of the agreement, to be an extension of the expired agreement.  If before the fifth year of a whole grade sharing agreement, two or more districts decide to begin consolidation under the current law consolidation process, then the districts would receive a fifth and sixth year of full aid under this provision.  This appropriation is sum certain; thus, aid payments to districts would be prorated if the appropriation is insufficient to meet the demand.

Shared Services Aid Program–The JFC-approved package would provide $2 million beginning in 2018-19 for a pilot program that would provide categorical aid for districts that share the services of certain administrative positions. Two or more districts could qualify for aid based on the following amounts for each position shared, with no limit on the number of positions:

  • district administrator $40,000;
  • human resources director, IT coordinator, business manager $22,500; and
  • any other non-faculty administrative position, excluding principals & assistant principals, $17,500.

Aid would be fully paid in the first three school years of the plan, with a 50% payment in year four, and no payment in the fifth year.  If, before the beginning of the fourth year of a shared services plan, each school district decides to enter into a whole grade sharing agreement, then each district would receive 100% of the aid in year four and five of the plan. Require DPI to make the first payments under this program by January 1, 2019.

Require each applicant school board to pass a resolution approving participation in this program and to jointly submit a shared services plan to DPI by July 1, 2018. Specify that the plan include all of the following:

  • position(s) that districts intend to share;
  • position(s) that will be eliminated;
  • salary & fringe benefit costs of the position(s); and
  • information demonstrating that the plan will result in a net reduction in filled administrative positions.

A school district could enter into an agreement with a unit of government other than another school district, but that unit of government could not receive aid under this provision.

The JFC plan requires the DPI to review and approve applications in the order in which they are received and approve applications until all moneys are appropriated. If a school district participating in a shared services plan hires an additional individual to a position covered under the plan without eliminating the current incumbent, DPI is required to withdraw all of the school districts party to the plan from the program and withdrawn districts could not receive any additional aid under the program. If a school district employee holds more than one position in each district covered by a plan, each district could receive aid only for the one position with the highest aid amount.