Proposed amendment would direct unspent school aid to urgent school repairs

The proposed amendment would set higher limits on debt service costs for approved school construction projects. The listed limits cover approved major school construction projects. The listed limits apply in fiscal years 2028 through 2031.

The proposed amendment would keep certain debt service costs above a set limit out of the state’s total education cost calculation. The rule covers debt service costs paid by the Department of Education above the fiscal year 2027–28 maximum limit. The costs include principal and interest for approved major capital projects. The rule excludes payments made with certain federal school project bond accounts and costs tied to a school closed for lack of need. The rule would begin in fiscal year 2027–28 and apply in each later fiscal year.

The proposed amendment would establish a fund for urgent school repairs and direct some unspent school aid into it. School administrative units could seek funding for immediate heating, ventilation, air-conditioning, or roof repairs at schools. The State Board of Education, consulting with the Department of Education, would set award rules, including eligibility guidelines. The State Controller would transfer the school aid beginning in fiscal year 2027–28 and in each later fiscal year.

The proposed amendment would direct yearly transfers to the School Revolving Renovation Fund and require rules to raise its loan limit. The loan limit would apply to work addressing each priority in a school building through the School Revolving Renovation Fund. The State Controller would transfer up to $50 million from unbudgeted lapsed General Fund balances, then use General Fund surplus to bring the total to $50 million. Transfers would begin at the end of fiscal year 2026–27 and recur at the close of each later fiscal year. The higher loan limit would cover each priority within a five-year period.

The proposed amendment would require a cost-sharing formula for major school construction projects and a working group to recommend ways to increase construction. The formula would apply only to projects submitted for state approval on or after July 1, 2027. The Department of Education would convene the working group, which would include state officials and representatives of education and municipal bodies. The formula must consider a municipality’s ability to pay and a school administrative unit’s consolidation policies, and include an implementation timeline. The working group would review goals identified in the Governor’s Commission on School Construction report and recommend administrative and financial changes, including possible legislation. The State Board of Education would adopt the formula rules by July 1, 2027. The Department of Education would send the working group’s report to lawmakers and the Governor by January 15, 2027.