Requiring a school board to spend at least 70 percent of its operating expenditures on direct classroom expenditures and annual pay increases for school administrators. (FE)

Under the bill, if a school board fails to meet the 70 percent threshold in any school year, the school board must increase the amount spent on direct classroom expenditures by at least 2 percent in each succeeding school year until the 70 percent level is reached. In addition, in the school year following a school year in which a school board fails to meet the 70 percent threshold, the bill directs the Department of Public Instruction to reduce the school district’s state aid payments by the difference between what the school board spent on direct classroom expenditures and the minimum that it should have spent on direct classroom expenditures and prohibits the school board from levying additional property taxes to compensate for the reduction. Finally, if the total reduction in state aid and other state payments does not cover a school board’s excess expenditures, DPI must order the school board to reduce the property tax obligations of its taxpayers, including providing refunds to taxpayers who have already paid their annual taxes, by an amount that represents the amount of excess expenditures that have not been recovered through the state aid reductions.

Limitation on annual compensation increases for school administrators The bill limits the amount a school board may increase the total compensation paid to a school district administrator, business manager, or school principal, or an assistant to any of those positions (collectively, school administrators), to the average annual percentage increase in total compensation that the school board provided to teachers in the school district.

Under current law, the term of a school administrator contract is limited to no more than two years but may provide for additional one year extensions. The pay increase limitation created in the bill first applies to contracts entered into, renewed, or modified on the date the bill becomes law.