Committee walkthrough: Act 73 creates $15,033-per-pupil foundation formula and Educational Opportunity Payment
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Summary
Presenters told the Ways & Means committee that Act 73 establishes a new foundation formula with a base amount of $15,033 per pupil, a district-specific Educational Opportunity Payment (EOP), revised weights including special-education and EL refinements, and transitional supports for small and sparse schools.
Presenters reviewed the education-finance portions of Act 73, saying the law creates a new foundation formula with a base amount of $15,033 per pupil and an Educational Opportunity Payment (EOP) calculated by multiplying that base by a district’s weighted long-term membership.
The formula replaces the prior “education spending” concept and refocuses funding as an EOP that districts receive irrespective of prior local spending patterns. "In section 34, we create your base amount of 15,033 per pupil," the presenter said while outlining how the EOP is calculated.
Why it matters: The change alters how much of a district’s revenue is considered automatic (the EOP) versus what voters approve locally. Under Act 73, local budget votes will concern supplemental district spending—funds raised above a district’s EOP—rather than the whole prior budget amount.
Details and timeline: Section 35 revises weights: a prekindergarten grade-level weight is retained; the English learner weight is expanded into categories by proficiency and prior education; and special-education weights are reorganized by estimated disability cost, replacing the old census-block grant. Small-school and sparsity weights are repealed and replaced with targeted support grants (section 37). Presenters noted the foundation formula rollout is contingent and that several provisions are slated to be contingently effective on 2028-07-01 pending receipt of a JFO-contracted foundation-formula report and the formation of new school districts.
Transition mechanics: The committee heard a multi-year transition for districts to move from locally varying homestead rates and ad hoc spending patterns onto the EOP. For fiscal years 2029–2032 the law prorates the difference between a district’s FY2025 spending and its FY2029 EOP so districts move gradually toward the new payment level. Presenters explained that districts currently spending below the EOP will be incrementally increased, while districts spending more will be incrementally lowered during the transition.
Support grants and appeals: Support grants for small schools (under 100 pupils by two‑year average plus an annual 'small by necessity' state-board determination) and sparse schools (defined by municipal type and population density plus annual determination) provide alternative support in place of prior weights. The statute retains appeal paths and includes conforming cleanup across several sections.
Next steps: Staff and JFO will deliver reports required by the statute (including the section 45(a) foundation-formula report) and address remaining implementation details before multipliers, district reconfigurations or other contingent elements take effect. Committee members asked about tying disbursements to performance goals; presenters urged focusing on statutory text in the walkthrough and flagged those policy choices for future debate.
