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School funding: executive recommends 2% per-student increases, reliance on foundation and common-schools trust funds explained
Summary
Legislative analysts told the Appropriations Committee the Burgum executive recommendation adds about $60 million to state school aid, centered on a 2% per-student payment increase in each year and continued reliance on the Foundation Aid Stabilization Fund and Common Schools Trust Fund.
Sheila Sandness, senior fiscal analyst with Legislative Council, briefed the Appropriations Committee on K–12 funding in the executive budget.
Sandness said the executive recommendation includes an increase to state school aid totaling about $60 million and recommends a 2% increase in the per-student payment rate in each year of the biennium. That would raise the integrated per-student payment rate to $11,293 in year one and $11,519 in year two of the next biennium, according to the executive book.
The Burgum recommendation offsets some general-fund cost through larger Foundation Aid Stabilization Fund and state tuition fund distributions. Sandness noted the executive proposal would require school boards to use 70% of the new money they receive from the increased per-student payment rate for increased compensation to nonadministrative personnel.
She summarized 1-time proposals in the executive budget: general fund 1-time funding items include an array of small education-related grants; the executive recommended $5 million in one-time Foundation Aid Stabilization Fund grants for program and teacher retention grants, and a $50 million SIF one-time pilot for education savings accounts covering public, private and homeschool students.
Sandness also summarized trust-fund balances: she cited an unaudited Common Schools Trust Fund balance of about $7.2 billion as of Aug. 31 (the figure appears in the executive book) and showed the Foundation Aid Stabilization Fund estimated ending balance and reserve. On the Foundation Aid Stabilization Fund she reported current biennium estimated ending balance before the reserve of about $486 million, a reserve of roughly $250 million, and an estimated available balance going into the next biennium of $235.9 million. The executive recommends disbursing roughly $305 million from that fund in the next biennium, including $225 million for state school aid and a $75 million transfer to the school construction assistance revolving loan fund, leaving an estimated balance after reserve of about $133.8 million going forward, per the executive calculations.
Why it matters: K–12 formula funding is a large and visible portion of the general fund, and the interplay between general fund appropriations and trust fund distributions will determine how much new operating money flows to school districts and how much one-time money is available for grants and pilot programs.
Members asked staff for additional historical charts and breakdowns tying common-schools trust fund distributions to statewide per-student payments for use in later division hearings; staff pointed to trust-fund analysis pages in the budget book and offered to provide additional time-series detail on request.
