SB 945

84(R) - 2015
Senate Education
Senate Education

Vote Recommendation

  • Neutral
  • Neutral
  • Neutral
  • Neutral
  • Neutral


Larry Taylor

Bill Caption

Relating to funding under the public school finance system for a school district with a compressed tax rate below the state maximum compressed tax rate.

Fiscal Notes

Estimated Two-year Net Impact to General Revenue Related Funds for SB945, Committee Report 1st House, Substituted: a negative impact of ($192,300,000) through the biennium ending August 31, 2017.

Bill Analysis

There are two types of school funding, Tier 1 and Tier 2, though the Foundation School Program (FSP). Wealthy school districts can raise their Tier 1 funding through local property taxes and consequently, are not eligible for FSP state funding, while less wealthy districts must receive matching state funding to make up the difference.

In 2005, the property tax relief brought school districts that were not taxing the maximal rate of $1.50 below the $1.00 threshold in Tier 1 funding, resulting in a compressed tax rate (CTR).  SB 945 would allow school districts to decide if they want to convert their Tier 2 pennies that yield $31.94 to Tier 1 in order to bring the district back up to the maximum compressed rate (MCR) of $1.00 in order to receive 100% of matching state funding. 

The bill would allow school districts to decide if they want to participate, and if so, would have to notify the commissioner no later than September 1 of the affected year.

Vote Recommendation Notes

Though there is a negative fiscal impact, the bill would allow all school districts to potentially be uniform with each other in regards to the tax rate and state funding received. SB 945 would allow a school district to decide if they wanted to participate in this, thus promoting local decisions made by the district.  For these reasons, we are remaining neutral on this legislation.