Joint Fiscal Office outlines education fund mechanics and options to ‘buy down’ property tax rates

Julia Richter, budget analyst with the Joint Fiscal Office, told the Senate Committee on Appropriations on Jan. 16 that the state’s Education Fund is built from a mix of property-tax and nonproperty revenues and that the Legislature must make annual policy choices that determine how much of school spending is covered by property taxes.

“The way that it works, essentially, is school boards are building budgets that need to be approved by voters,” Richter said. She described the Education Fund outlook as an "operating statement" that shows how policy choices affect the fund’s balance and the property-tax yield the Legislature must set.

Richter walked the committee through the key mechanics: local school budgets are reduced by offsetting revenues (such as categorical grants, federal dollars and tuition receipts) to calculate “education spending,” which is aggregated into the state Education Fund as the education payment. The fund’s other appropriations—categorical aids (special education, transportation, technical education, flexible pathways) and small state-level operating items—also draw from the same pot. Nonproperty revenues (sales-and-use tax, portions of…