House Education committee advances strike‑all amendment to H.454, outlines new statewide education tax and local supplemental levy

The House Education committee on April 9 continued its review of H.454 as amended by the House Ways and Means Committee, voting in a committee straw poll to advance the strike‑all amendment. The amendment would create a statewide education property tax to fund the Education Fund and a locally raised, equalized supplemental district spending (SDS) tax for school districts that choose to raise funds above the statewide Educational Opportunity Payment (EOP). The committee counted a 7‑4 straw vote in favor; the measure will face floor action and final votes there.

The amendment replaces several features of the existing formula and property tax structure. Under the proposal, SDS is the amount a district enacts above its EOP, subject to a cap of 10% of the district's EOP. Per‑pupil SDS is calculated using long‑term membership (LTM), not weighted LTM. To set local tax rates consistently, the bill defines a "yield" based on the hypothetical revenue per LTM in the school district with the lowest taxing capacity; a district's supplemental district spending tax rate equals its per‑pupil SDS divided by that yield. Any revenue raised by a district in excess of the amount it voted (recapture) would flow first to a SDS reserve within the Education Fund to fix calculation errors and then, after those contingencies, into the School Construction Aid Special Fund.

John Gray, Office of Legislative Council, described the mechanics: "the commissioner shall determine that supplemental district spending tax rate by dividing the school district's per pupil supplemental district spending by that yield." Gray told the committee the SDS reserve would be used initially to correct math errors and that "any funds remaining after accounting for those errors would be transferred into the school construction aid special fund." Gray also emphasized that the per‑pupil calculation uses long‑term membership rather than weighted counts.

Committee members and staff discussed several operational details. Charlie Kimball, State Representative and ranking member on Ways and Means, explained the panel's view on allowing districts to raise funds above the EOP: "there may be times in which the school districts felt like, there was a need to raise more than the EOP," and the amendment seeks to allow that ability while protecting the lowest‑capacity districts from penalty. The committee also debated tax classification mechanics: the statewide education tax would apply to four property classifications (homestead plus three non‑homestead classes) with fixed factor relationships under the proposal; officials said those factors are currently placeholders (generally 1) and would be set later.

On taxation logistics, Legislative Council staff explained how non‑homestead apartment classification will be handled in practice. Kirby Keaton, who drafted the section, said landlords would make a forward‑looking attestation when filing landlord certificates, declaring whether they expect a unit to be rented for at least six months in the coming year. "They would, at the same time, attest for the upcoming year whether they expect to rent out the unit for at least 6 months," Keaton said. Keaton added that departments will likely flesh out form details and that the attestation is intended to limit discretionary reclassification by auditors.

Committee members asked how special education payments and high‑cost tuition placements will work under the new structure. A committee member asked whether extraordinary special education costs (placements costing well above typical levels) would follow the student. Committee discussion said that, under the proposed foundation model, funding for students' special education needs generally "would go with the student" through additive special education categories in the foundation formula; however, committee members and staff noted that the current extraordinary special education reimbursement mechanism (the statutory high‑cost pool that reimburses eligible costs above the threshold) was not explicitly changed in the amendment and remains subject to separate review. One member asked for clarification: committee staff indicated that the extraordinary cost reimbursement structure (the high‑cost threshold and state reimbursement) is expected to remain in place unless changed in subsequent work.

The amendment also updates the December 1 letter that agencies send to school districts. The revised letter would list each district's LTM, weighted LTM (used for EOP calculations), grand list totals, the district with the lowest taxing capacity, estimated per‑pupil grand list, and the prior year's range of per‑pupil SDS so local officials can calculate tax rates and projected impacts. The bill requires several reports due December 15 (before the next session): Agency of Education reporting on transportation reimbursement grants and Joint Fiscal Office reports on proposed inflationary measures and a report reviewing funding for pre‑K and early care and learning incentives.

The bill sets a multi‑year effective schedule. The new tax classifications and the foundation formula would not take full effect until the 2029 fiscal year (effective 01/01/2029 for foundation formula implementation details), and a transition to an "evidence‑based" foundation approach would occur only if four conditions are met (development of an evidence‑based formula by professional panels, 90% compliance with class‑size standards, 90% compliance with facility size standards, and implementation of MTSS across classrooms). The amendment also directs the Ed Fund advisory committee to assist with evaluation of a future transition from a cost‑factor base to an evidence‑based approach and to recommend weighting approaches to address intra‑district allocation effects.

The committee concluded its session by taking a committee straw vote on the Ways and Means strike‑all amendment; chairs counted seven members in favor and four opposed. Members and staff said the committee will reconvene after floor consideration to take up two specific amendments on the calendar and will conduct a formal poll later as part of the floor process. No final floor outcomes were recorded in this hearing.

The committee's next steps include floor consideration of the strike‑all amendment and subsequent committee reconvening to address the two calendar amendments; additional technical details (tax classification factors, administrative forms for landlord attestations, and special education implementation guidance) were repeatedly identified as items for agencies and the Joint Fiscal Office to refine in rulemaking, forms, or follow‑up reports.