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Board hears advocacy update on substitute House Bill 96; district warns against 25% cash-balance restriction
Summary
District leaders and board members reported that the substitute version of House Bill 96 would reverse an earlier projected revenue loss and instead show a modest gain, but expressed concern about a provision allowing tax reductions when a district’s cash balance exceeds 25% of prior-year expenses.
Board members and district staff provided an advocacy update on substitute House Bill 96 at the April 7 meeting, describing both revenue simulations and a new provision that could affect future local tax levies.
According to the presentation, the district’s simulation showed that under the original House Bill 96 the district would have stood to lose about $2.1 million; the substitute bill, as presented to the board, would yield a gain of about $220,000 for the district — a swing of roughly $2.3 million. Board members praised legislators who incorporated changes they had requested in the substitute bill but emphasized continued engagement as the measure moves through the Senate.
Board members raised concerns about language in the substitute that would permit a county or taxing authority to reduce a district’s tax rate if the district’s year-end cash balance exceeded 25% of prior-year total expenses. District presenters said that the 25% figure appears to reference a 90-day-cash recommendation used in some fiscal white papers (90/365 ≈ 25%), but they argued the 25% figure was intended historically as a minimum threshold for fiscal health, not a maximum.
Presenters described how the district’s cash balance rose following valuation increases in 2020 and 2023, and that the district has used five-year forecasts to plan for inflationary expense lines and future obligations. They said the proposed 25% cap could force more frequent levy requests or higher levy rates in the future, reduce the district’s ability to sign multi-year contracts, and constrain multi-year planning.
District staff also noted existing oversight mechanisms: the five-year forecast required by the state is reviewed by the Department of Education and the State Auditor’s Office, and those mechanisms can trigger review or inquiry if balances are unusually high or low. Presenters urged legislators to remove the automatic 25% reduction provision and instead address property-tax reform or use the Department’s existing review channels.
Board members said they had met with Representative Adam Berg, Representative Jean Schmidt and Senator Johnson during legislative day and that district advocates had communicated the concerns to those offices. The board asked staff to continue advocacy as the substitute bill moves to the Senate.
