SB 668

This bill creates a new aid program for certain consolidated school districts. To be eligible for this aid, the consolidation that created the consolidated school district must take effect on or after July 1, 2026, and the consolidated school district’s maximum allowable levy rate must be greater than the lowest levy rate of the school districts that were consolidated to create the school district (underlying school districts). In general, the levy rate of a school district is the total amount of property taxes levied by the school district divided by the school district’s equalized value. The bill does not provide funding for the new aid program.

An eligible consolidated school district is entitled in the first school year following the consolidation to aid in an amount equal to the consolidated school district’s equalized value multiplied by the difference between the maximum allowable levy rate of the consolidated school district and the lowest levy rate of the underlying school districts (base aid amount). In the second school year following the consolidation, the consolidated school district is entitled to aid in an amount equal to 80 percent of the base aid amount. In the third school year following the consolidation, the consolidated school district is entitled to aid in an amount equal to 60 percent of the base aid amount. The amount of the aid continues to be reduced by 20 percent each school year so that in the sixth school year following the consolidation, the consolidated school district no longer receives this aid.

Current law limits the total amount of revenue a school district may receive from general state aids and property taxes in a school year. This limitation is known as a school district’s revenue limit. The new aid provided under the bill is a general state aid for purposes of school district revenue limits. As a result, the new aid reduces the amount of property taxes that the consolidated school district is allowed to levy.

Additionally, under current law, a consolidated school district is eligible for state aid in the amount of $150 per pupil for the five school years following the consolidation and a percentage of that amount in the sixth and seventh school years following the consolidation. The bill makes no changes to this consolidation state aid.