School boards could reserve money and seek budget changes for unexpected costs

Boards of education may create a cost stabilization reserve and use it for certain unexpected costs. The option is for boards of education and covers eligible general fund costs that rise significantly above what the district first expected in its tax certified budget. The reserve may cover general fund costs, but not staff salaries. It expressly covers health care, student transportation, and special education costs; state rules may add other categories. A board resolution must identify the cost increases and explain why the withdrawal is needed for a thorough and efficient education. State rules may require extra approval by the commissioner. Boards may add money through the annual budget or by resolution during the school year. The act would first apply to the first full school year after enactment.

Boards may ask the education commissioner to approve budget changes during the school year. The process covers significant, unexpected general fund costs. It expressly includes health care and tuition for resident students attending approved private schools for students with disabilities. The board must adopt a resolution by January 31 and show the costs rose significantly beyond what could reasonably have been expected, are needed for a thorough and efficient education, and did not result from poor planning or error. Applications must document the increase, explain its causes and effect on district finances, and describe steps taken to limit costs. The commissioner may direct budget and program changes that do not hinder a thorough and efficient education; the board must approve them by a recorded majority vote of its full membership. The board must adopt its application resolution no later than January 31. The process would first apply to the first full school year after enactment.