House Ways & Means hears mechanics of "excess spending yield" in draft education finance bill

The House Ways & Means Committee on April 1 heard the Joint Fiscal Office explain how draft 1.1 of an education finance proposal would calculate an "excess spending yield" to equalize tax rates when school districts raise spending above the state foundation formula.

Julia Richter, Joint Fiscal Office, told the committee the yield would be set annually by the Department of Taxes in the December 1 letter and used to convert each district's chosen excess spending into a tax rate. "Everything in here are example numbers, unless otherwise mentioned," Richter said while walking lawmakers through the mechanics and three made-up district examples used to illustrate calculations.

The discussion matters because the proposal ties the tax rate for spending above the foundation to a statewide yield based on the school district with the lowest property-tax capacity per pupil and because draft language benchmarks that district at 80% (0.8) of its equalized grand list per pupil — effectively creating a built-in cushion that would send some locally raised dollars into a state reserve.

Richter described the calculation in steps: compute each district's equalized grand list per pupil…