Conference committee shifts K-12 funding mix, sets aside $100 million for school construction

The Appropriations - Education and Environment Division conference committee met to reconcile differences in the Department of Public Instruction budget language and funding for the K‑12 biennium, focusing on how to allocate the Foundation Aid Stabilization Fund and carryover dollars and on proposals to fund school construction.

Senator Shibley, who led the committee discussion of the DPI long- and short-sheets, said the committee set an order for fund sources used to pay the integrated per-pupil payment: first the Common Schools Trust Fund, second available carryover, and third the Foundation Aid Stabilization Fund. He said the committee identified $233 million in available SIF resources and proposed directing $100 million of that toward school construction and $133 million to per-pupil payments, with remaining needs covered by general funds. Senator Shibley described ongoing items as candidates for general-fund support and one-time items for SIF funding.

The move changes how several line items are funded compared with House and Senate versions. Senator Shibley said the committee made formula and funding-source adjustments to preserve revenue neutrality where possible, and to limit the budgetary impact of formula changes to about $2 million going forward for related transportation and aid calculations.

The committee also discussed transporting a $595 million transfer from the Common Schools Trust Fund into state aid payments; Senator Shibley said that amount reflects an $85 million increase from the prior biennium. He told members the transfer strengthens the trust fund's contribution to K‑12 but cautioned against treating trust funds as a long-term mechanism for budget balancing.

Program-level decisions: the committee left many program requests intact and made only targeted changes. Agreed or maintained amounts included $5.5 million for adult education training grants, $3 million for a paraprofessional-to-teacher fast-track program, $1.5 million for the 7th-year leverage program, and $300,000 in one-time funding for dyslexia identification training (specified as screening/identification support, not diagnostic services). Senator Shibley said science-and-reading and literacy programs need roughly $1 million more to reach operational goals, and that a school-food free-meal expansion from 200 percent to 225 percent eligibility would require approximately $7.3 million if the higher threshold is maintained.

The committee approved operational changes at specific institutions: the School for the Blind would receive one full-time technology coordinator position funded for the second year of the biennium (about $152,000) to support assistive technologies; the Center for Distance Education will receive a 0.2 FTE increase to help qualifying staff reach benefit-eligible status; and funding-language updates will reflect two consolidated regional education associations (six REAs total) receiving $50,000 per year each.

On program grants and one-time projects, the committee left some items unchanged, reduced or reprioritized others after DPI survey results about statewide reach: the National Writing Project funding was reduced from the House request; mentoring grants (North Dakota RISE) were scaled; Governor's School was funded at $500,000 (split between the two research universities), and some highly targeted projects (for example a robotics pilot discussed as serving a narrow population) were deprioritized in favor of broader statewide programs.

Members also discussed an interrelated technical issue: House Bill 1369 would include a $100 million transfer to school construction (the House had proposed $75 million). Senator Shibley said the increase to $100 million was intended to preserve access to low-interest revolving loan capacity for locally led school projects while enabling an 80/20 federal matching opportunity for projects tied to Air Force base-related construction; the committee added $25 million to reduce competition between base-related projects and other local borrowers. He said those grant-match and revolving-loan interactions are handled in separate bills, with 1369 carrying the transfer language the committee reflected in the budget.

The committee did not record any formal floor votes during this meeting. Members agreed to schedule a follow-up meeting to reconcile remaining differences, including discussion points that several members flagged for additional review (centers of excellence, Cognia accreditation support funding to avoid local charges to districts, and the proposed transfer of the Upstart early‑literacy program from the Department of Human Services into DPI). Representative Lanza questioned the free-meal cost assumptions tied to eligibility changes; Representative Lasser asked members to prepare details on centers of excellence for further negotiation; Representative Lozar said maintaining the "3 and 3" funding target remains his floor for negotiations.

The committee adjourned after scheduling additional sessions to complete the conference reconciliation.