This week was focused largely on the education budget.  HB00173 passed on 2nd reading with many amendments that had the effect of cutting funding to school districts by $70 million which would be phased in over 3 years. This is a 4.6% overall cut by year three (1.6% annual reduction).  This was accomplished without cutting any current employees and increased teacher salaries by 10%, which demonstrates the Legislature’s dedication to our teachers and the classroom. The proposed cuts include removing current funding for “ghost” employees, or positions that the State is paying for but are not being utilized. For example, on a statewide basis, we fund 376 total tutors, but there are only 154 tutors actually employed in the state. In this bill, we reduced the funding for tutors to 187 total positions which is still more than currently being used for an annual savings of $16 million. We reduced funding for other “ghost” employees like assistant principals, instructional facilitators and nurses. Again, this will not require any reduction in staff as these positions are currently vacant.

Additionally, HB00173 shifts the education health insurance premiums to be similar to other state employees and to effectively eliminate insurance compensation for “ghost” employees.  This will save the state over $59 million per year.

The bill still includes an additional 1% sales tax which would go into effect if our rainy-day account drops to $650 million.  With the current increase in oil prices, the rainy-day fund is not anticipated to drop to this level before 2025.

Finally, HB00173 includes a change in the block grant funding of school districts. Currently, each school district is given a block grant based on the state funding model and the local school boards decide how to spend that money. This provides for local control of the way the schools are ran. The change proposed in this bill would provide the exact same amount of funds to the individual school districts, but it would come in two separate grants, one for teachers/classrooms and one for central office expenses. This will prevent money that is intended for the classroom/teachers from being used to supplement central office costs and further protect our students. Again, this is demonstrating the Legislature’s commitment to the classroom and our children’s education.

Third reading of HB00173 will be heard next week. There are already over 14 amendments proposed to the corpus of this bill which may change the bill considerably. The American Rescue Plan Act of 2021 was passed, and which will provide over $300 million that will go directly to our schools in the next few months. We expect to have more definition on the restrictions on this federal money in the near future and will be better able to understand how it will affect our school districts.

Several bills are progressing through committee and will be heard on the floor next week.  These include legalization of marijuana, and abortion legislation.