House Finance committee forwards education funding bill after contentious debate over three‑year averaging and special‑education counts

Co‑chair Foster presided May 5 as the House Finance Committee considered House Bill 261, a sponsor‑led measure to change how the state calculates school funding by moving many student counts to a three‑year average. Sponsor Representative Andy Story said the bill would smooth funding by using an average daily membership (ADM) across three years for most counts and would smooth the statutory funding cliff around the 1,0425‑student mark.

Supporters argued the averaging approach would provide predictability to school districts and the legislature. Representative Bynum, who moved an amendment to simplify the bill into a mandatory three‑year average with a >5% true‑up if the current year exceeded the average, said the design would reduce complexity and give districts a reliable forecast for state funding.

Opponents warned averaging intensive special‑education counts could jeopardize federally required maintenance‑of‑effort under IDEA and underfund students with high per‑pupil service costs. Sponsor Story and other members repeatedly said special‑education students have unusually high costs in any given year and that districts must be able to count current intensive needs to meet legal obligations. Story noted a prior bill that included averaging for intensive students produced a $47,000,000 increase on the fiscal note, testimony he referenced from a previous hearing.

Lori Weed, finance manager at the Department of Education and Early Development, told the committee the foundation formula is general operating funding and that districts have maintenance‑of‑effort responsibilities for special education. She said the amendment under discussion would replace the prior‑year calculation with a three‑year average for both regular and intensive counts, but that if the current year count were higher it would be used in lieu of the average. Weed described the maintenance‑of‑effort calculations as complicated, with exceptions for enrollment drops and other circumstances.

The committee considered a conceptual amendment that would have kept three‑year averaging for standard ADM but exempted intensive needs; that conceptual amendment failed on a 5–6 roll call. Amendment 2 — which would have required three‑year averaging for all ADM including intensive students with a >5% true‑up — failed on a 5–6 roll call. Later, Representative Moore proposed an amendment capping district administrative spending at 15% of operating expenditures; the sponsor and several members debated definitions and local‑control impacts, then adopted a conceptual clarification inserting "at the district level," and the amended administrative‑cap amendment also failed on a 5–6 roll call.

After vetting multiple amendments and hearing extensive questions, Representative Froggy moved HB 261 out of committee "as amended" with individual recommendations and the attached fiscal note. Following objections and subsequent withdrawals, the motion passed and the committee forwarded the bill out of the House Finance Committee as the members had amended it. Representative Story thanked members for the careful vetting.

Next procedural steps identified by the committee included circulation and signing of committee reports and any follow‑up fiscal analysis the committee requested during floor preparation.

Ending: The committee concluded its HB 261 work and moved to public testimony on other bills; committee members repeatedly asked for additional modeling and data on the fiscal impacts of averaging options to inform future action.