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$25 million more for schools would lower mill rate
A majority of the Appropriations Committee members are supporting a budget that increases General Purpose Aid going out to school districts by $25 million in each year of the state’s biennial budget, adding onto what was proposed by the administration.
The additional funding will come from two sources. The lion’s share – $19.5 million per year – is additional state funding. The rest will come by redirecting $5.5 million in funding initially earmarked for so-called miscellaneous costs in the education budget. Those miscellaneous costs do not go out directly to districts for the operation of schools.
The administration’s original budget sent around $9 million directly out to districts. The proposed budget also created a required local mill rate of 8.48 – the highest mill rate since the EPS funding and state distribution formula went into effect in fiscal year 2006. The current mill rate is 8.1.
The Appropriations Committee’s majority proposal would result in a local mill rate estimated at 8.23. Districts are cautioned that is just an estimate right now, but shows the impact of the additional General Purpose Aid on local tax burden.
School boards and superintendents have raised the alarm about the mill rate impact since the original budget was released. They also have raised concerns about the rising cost of education, particularly the cost shift onto districts of retirement costs that had for years been paid for by the state.
This current school year, those retirement costs total just under $30 million. In the next two years of the biennium they will go up to $37 million and $38 million respectively – a 25 percent increase over current costs.
Budget negotiations are continuing at this writing largely over the debate on income tax reduction. The Legislature is on a deadline to get something passed before July 1 – the start of the new fiscal year.
MSMA will keep members posted through email alerts on budget negotiations and votes as they unfold over the coming weeks.
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