The Agency of Education on Tuesday briefed the joint education finance committee on updated school finance data, the long-term weighted average daily membership (ADM) process and the fiscal implications of Act 73 proposals to form larger districts.

"We have filled our education finance director position, and that's Kelly Murphy who's joining me today," Gilbert Campbell, deputy secretary and chief of operations for the Agency of Education, told the committee while introducing the finance team. "We've invested in people resources as part of our reorg." Kelly Murphy, the agency's new education finance director, said she was "looking forward to coming back over on to the state side of things, at a really critical time," and signaled the team would provide updated modeling and support.

AOE senior fiscal staff described an iterative data-collection process that produced a preliminary statewide average growth estimate of 5.8 percent for education spending. Staff said roughly two-thirds of districts responded to the November survey, representing about 80 percent of total spending; earlier-year estimates (FY26) that projected 5.71 percent growth ultimately tracked at about 5.73 percent, the agency noted.

AOE flagged several data-integrity sources of error: inconsistent student information system (SIS) configurations across vendors, turnover among local data managers, and variable district interpretations of the uniform chart of accounts. "There were examples this year of several dozen paper income forms sitting on someone's desk that never made it into their student information system," Campbell said, describing how paper-based processes produced undercounts of free/reduced-lunch status that affect weighted ADM calculations.

To reduce late-stage corrections, AOE said it now requires verification and certification steps: data managers submit ADM data; business managers and superintendents then verify and certify the long-term weighted ADM for final use. As of the briefing, AOE reported 48 of 52 districts had signed the first certification step.

On excess-spending rules, AOE staff explained the FY27 per-pupil excess threshold is about $16,500 and noted that after statutory exclusions (for example, principal and interest on bonds) only a handful of districts currently look likely to exceed the threshold. AOE cautioned that the raw count of districts above a threshold can fall when districts deduct eligible exclusions.

Committee members pressed the agency for modeling that isolates pandemic-era compensation decisions, special-education contracting and other drivers of per-pupil growth. AOE staff said special-education contracted services are a major upward pressure — sometimes three times the cost of comparable in-house services — and that salaries and health insurance remain primary cost drivers across many districts.

"Governance changes alone are not going to change your spending outcomes if you don't change the way you staff, the way you run your systems, the way you contract," Campbell told members, urging that any consolidation plan be paired with operational reforms. Several legislators said they will require clear, district-level modeling showing projected savings and educational benefits before they would support closures or mergers.

The committee asked AOE and the Joint Fiscal Office to provide refined modeling tied to any proposed maps so members can evaluate expected savings, distributional impacts and community-level tradeoffs. AOE agreed to return with additional analysis and examples from other states that combined governance change with operational reforms.

Next steps: AOE will continue to finalize long-term weighted ADM certifications and provide the requested modeling and data to the committee for further deliberation.