FISCAL NOTE

Senate Bill 9 as passed the Senate amends the Foundation Program formula to (1) include an allowance for student growth based on the net year-over-year growth of average daily membership for the two preceding school years and (2) eliminate the existing funding methodology for student growth via the Current Unit allocation. The appropriation for current units from the Education Trust Fund through the Foundation Program Fund for Fiscal Year 2021 is $13,109,561.

Using the five-year average historical enrollment growth figures for systems experiencing enrollment growth from 2017 to 2021 and the per-student Foundation Program costs for those years, this bill would increase the obligations of the Foundation Program, funded by the Education Trust Fund and local funds, by an estimated $28.5 million annually, assuming this component is fully-funded.

The net affect to the Foundation Program by eliminating the current units funding and establishing the new student growth allowance would be an estimated increase in Foundation Program costs of $15.4 million.

Further, this bill provides that for fiscal year 2022: (1) the growth allowance for non-virtual students shall be funded net of the amount received by the school system under the existing Current Units allotment and 100% thereafter; and (2) the growth of full-time virtual students shall be funded at a rate determined by the State Department of Education based on the average cost to school districts to educate a full-time virtual student. This could increase or decrease the obligation of the Foundation Program Fund, the ETF, and local funds by an undetermined amount dependent upon the rate established by the State Department of Education.