AB 937

Under the current general school aid formula, the state establishes a

guaranteed property tax base, known as the guaranteed valuation. The rate at

which a school district's costs are aided through the formula is determined by

comparing the school district's per pupil property tax base (or equalized valuation)

to the guaranteed valuation. State equalization aids are provided to make up the

difference between the school district's actual property tax base and the state

guaranteed level. Thus, school districts with low property valuations per pupil

receive a larger share of their costs through the formula than school districts with

high property valuations per pupil. Currently, the income of school district residents

is not a factor in the calculation of general state aid to the district.

This bill provides for the distribution of 50 percent of the money appropriated

for general school aid using an income equalization formula that is based on the

structure of the current property tax equalization base formula. (The other 50

percent continues to be distributed using the current property tax base equalization

formula.) The guaranteed valuation is based on the net taxable income reported by

taxpayers in the school district rather than the district's equalized property

valuation.

The bill first applies to the payment of state aid in the 2011-12 school year.