State Public K-12 Education Funding

The act requires the secretary of state to refer a ballot issue at the November 2026 general election to seek voter approval for the state, beginning in the 2026-27 state fiscal year, to retain and spend an amount of state revenue equal to the amount of state public K-12 education funding in excess of the limitation on state fiscal year spending and to increase state public K-12 education funding by up to 2% per year for 10 years.     The act directs legislative council staff to determine the amount of state public K-12 education funding and describes how legislative council staff will make that determination.     The act creates a positive factor to increase state public K-12 education funding. The amount of the positive factor compounds annually for 10 years. The positive factor for the 2026-27 budget year is 2% of the program foundation calculated for the 2025-26 budget year. For the 2027-28 through 2034-35 budget years, it is the sum of 2% of the prior year's program foundation plus the prior year's positive factor. For the 2035-36 budget year and beyond, it is the sum of 2% of the 2034-35 program foundation plus the 2034-35 positive factor.     A district's share of the positive factor is calculated proportionally based on the district's total program under the new school finance formula relative to the statewide total program.     A district may only use its positive factor funding for increasing teacher pay, improving teacher retention, lowering class sizes, and increasing access to career and technical courses.     For the 2026-27 state fiscal year, the children's account consists of an amount of money equal to the amount of state revenues that the state retains for a given fiscal year pursuant to voter approval of the act. For state fiscal years commencing on or after July 1, 2027, the account consists of that same amount minus an amount equal to the total dollar amount of warrants issued by the state treasurer to reimburse local governments for property tax exemptions. Money in the account must first be spent to pay districts their positive factor, then any remaining funds are appropriated for disability services and school services and to increase annual contact hours, and finally to programs prioritizing child care and full-day preschool.     The act directs the state auditor to conduct and publish a report on excess state revenues for each state fiscal year that the state retains and spends state revenues in excess of the limitation on state fiscal year spending. That report must include descriptions of:The amount of state revenues that the state retained and spent that would otherwise have been in excess of the limitation on state fiscal year spending; andHow the state expended the state revenues that the state retained and spent that would otherwise have been in excess of the limitation on state fiscal year spending.     Beginning August 1, 2027, the act requires each local education provider to post, online for free public access in a format that can be downloaded and sorted, its actual expenditures of any positive factor received.     Lastly, the act updates provisions regarding the expanded earned income tax credit, the family affordability tax credit, and the affordable housing financing fund to ensure that voter approval of the act does not adversely impact those programs.(Note: This summary applies to this bill as enacted.)