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HF2510 (Legislative Session 94 (2025-2026))

School district local optional revenue increased, and local optional revenue program indexed to the formula allowance.

Related bill: SF1254

AI Generated Summary

Purpose of the Bill

This bill is aimed at modifying education financing by increasing the local optional revenue that Minnesota school districts can receive. It aims to adjust how school funding is calculated and allocated, particularly to ensure the funding formula keeps pace with inflation and other fiscal changes over time.

Main Provisions

  • Local Optional Revenue Increase: The bill increases the local optional revenue allowance, starting with fiscal years 2026 and 2027 at $724, then adjusting the amount in fiscal year 2028 and later by indexing it to the formula allowance.
  • Tiered Revenue Allowances: It establishes a first tier local optional revenue allowance of $300, with any additional amount being part of the second tier.
  • Calculation of District Revenue: A school district's local optional revenue is the sum of its first and second tier allowances. The revenue for each tier is determined by multiplying tier allowances by the district’s adjusted pupil units.
  • Local Optional Levy Permissions: Each district's levy is determined based on their ability to levy against referendum market value per resident pupil unit. There are specific calculations for fiscal years 2023 to 2027 to determine the maximum amount of second tier levy.

Significant Changes to Existing Law

  • The bill amends existing laws to increase the flexibility and amount of local optional revenue available to school districts.
  • It updates how revenue is calculated by introducing new ratios based on pupil units and market values, allowing for adjustments that reflect changes to the formula allowance over time.
  • Introduces a mechanism to adjust future allowances based on inequalities in market values per pupil across districts which could address funding disparities.

Relevant Terms

  • Education finance
  • Local optional revenue
  • Levy calculation
  • Revenue allowance
  • Formula allowance
  • Adjusted pupil units
  • Referendum market value

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 16, 2025HouseFloorActionIntroduction and first reading, referred toEducation Finance

Citations

 
[
  {
    "analysis": {
      "added": [
        "Introduces new fiscal year specific multipliers for calculating the local optional revenue."
      ],
      "removed": [
        ""
      ],
      "summary": "This bill modifies the indexing and calculation of local optional revenue for school districts under section 126C.10, subdivision 2e.",
      "modified": [
        "Adjusts the calculation for local optional revenue and levy based on new fiscal year considerations."
      ]
    },
    "citation": "126C.10",
    "subdivision": "subdivision 2e"
  }
]

Sponsors