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Senate debates revolving loan fund for school districts and fights over education freedom accounts, interest rates and audits
Summary
Senators spent an extended period on House Bill 292, which would create a revolving loan fund to help school districts manage short-term cash gaps; debate focused on interest-rate indexing, possible expansion of Education Freedom Accounts (EFA), auditing requirements, and whether changes would favor or harm struggling districts such as Claremont.
House Bill 292, as amended, would establish a revolving loan fund allowing eligible districts to access up to 75% of adequacy funding after approvals by the commissioner of education, the state treasurer and the joint fiscal committee. Participating districts would provide monthly financial reports and could adopt a local tax-cap option.
Floor debate centered on several contested elements. Senator Prentiss and others pushed to set the interest rate by the state treasurer — arguing that the Federal Reserve Bank index in the amendment could impose punishing rates that would harm distressed districts. A floor amendment (0052s) proposing the state treasurer be used to set the rate failed. Opponents described an EFA (Education Freedom Account) expansion included in the committee amendment as a "poison pill" that could funnel funds away from public schools; proponents said the measure would provide immediate relief to districts like Claremont and stressed accountability and oversight.
Senator Altschuler and others objected to auditing requirements imposed by the committee amendment as onerous and raised concerns about the EFA off-ramp. Attempts to strike or modify the EFA expansion via floor amendment (0053s and 0050s) were rejected. A roll-call vote on the 'ought to pass as amended' motion ultimately passed by a recorded vote of 16–8 and the bill was ordered to third reading.
What happens next: HB 292 moves to third reading. Sponsors and opponents both signaled further negotiation is likely between the chambers and with stakeholders on precise interest-rate indexing, audit timing, and EFA cohort treatment.
