House Committee on Finance reviews governor’s proposed freeze on car‑tax indexing and targeted school‑aid increases

At a House Committee on Finance hearing, state budget staff outlined two linked parts of the governor’s proposal: a freeze of the sales‑tax indexing that would increase motor vehicle excise reimbursements to municipalities and changes to the education funding formula to target more funding to districts with concentrated poverty.

Sharon, a budget presenter, told the committee that “Article 5 section 13 would repeal that indexing of future funding, and the budget assumes $9,700,000 in savings from that repeal.” She said the current‑law indexing was scheduled to increase local aid in fiscal 2026 and that, under current estimates, the indexed amount for fiscal 2026 would be $2,244,600,000.0; the governor’s proposal would instead freeze the dollar amount and include a small hold‑harmless adjustment of about $140,000 for rounding and data shifts.

The net effect of stopping the indexing grows over time, Sharon said, and under current estimates may reduce what would have otherwise occurred by nearly $50 million by 2030. “These are purely estimates, but directionally probably correct,” she added.

On education aid, Sharon and Brian Daniels, director of the Office of Management and Budget, described changes in Article…