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Committee hears how three bills could shift millions in K-12 funding for ASD
Summary
Staff briefed the committee on HB 274 (BSA funding), SB 277 (omnibus), and SB 278 (2% cap on local contribution growth), outlining possible impacts: HB 274 could add about $44 million to ASD, SB 277 contains varied provisions (charter indirect cost cap, per-student transportation and BSA increases), and SB 278 could retroactively shift ~$5.1 million from municipal to state responsibility for FY26.
District staff briefed the finance committee on three pending education bills that could materially change state and local funding calculations.
Mr. Ratliff summarized SB 278 as proposing a 2% year-over-year cap on required local contributions; if applied retroactively to July 1, 2025, Ratliff estimated the change would shift roughly $5.1 million from municipal obligation to the state for the current budget year. "It would be a 5.1 reduction in the municipal portion and an increase to the state's portion," Ratliff said, while cautioning that language and enactment details could change and that FY27 interactions with the district's tax request and state caps are complex.
On SB 277, Ratliff said the omnibus bill includes raising the indirect cost cap that districts can charge charters (from 4% to up to 8%), a proposed $35 per-student transportation increase (about $1.35 million for ASD), a BSA increase that could yield about $9 million, and a proposal to fold correspondence-program students into ASD enrollment with cooperative agreements that could require administrative capacity and new registrars. Ratliff warned that administrative costs could offset some of the funding in that correspondence proposal.
Ratliff reviewed HB 274 (the BSA bill) as a $630 per-student proposal that would generate roughly $44 million for ASD but would still fall short of the projected cost to meet the legislature's target class-size changes (estimated implementation cost about $46 million for ASD). Board members asked about timing, testimony and whether administration expected to testify; staff said administration would likely testify as bills progress.
Board members raised concerns about how indirect cost rules are set federally and why a statutory cap increase to 8% may not change ASD's actual recoverable rate if the district's audited indirect rate remains below that level. Members also discussed operational implications if correspondence students are enrolled through ASD, including potential impacts to graduation-rate calculations and the need for new registrar staffing.
Ratliff said the bills were in early stages: SB 278 was slated for introduction and public testimony the next day per an association update, SB 277 had recently had committee scheduling changes, and HB 274 remained in committee. The administration said it would track the bills and consider testifying.
