Local optional revenue increased for school districts with limited referendum revenue authority, and money appropriated.
Summary
HF3371 would increase the amount of “local optional revenue” available to school districts that have limited referendum revenue authority, beginning with revenue for fiscal year 2027. The bill amends Minnesota Statutes section 126C.10, subdivision 2e, to raise the first-tier local optional revenue to $300 per adjusted pupil unit and the second-tier amount to $424 per adjusted pupil unit, while retaining the third-tier formula tied to a district’s operating referendum revenue per pupil unit. It also updates the levy formulas that determine how much of that revenue is raised locally versus paid as state aid, including a revised second-tier levy equalization threshold for fiscal year 2027 and later.
The bill appropriates general fund money to the Department of Education in fiscal year 2027 to cover the additional general education aid needed to support the higher local optional revenue. In practical terms, the measure would increase state aid obligations for the state while giving qualifying school districts more funding capacity without requiring them to rely as heavily on local referendum authority. The bill is targeted at districts with limited ability to raise money through local referenda, so the fiscal benefit would be concentrated in those districts rather than applied uniformly statewide.
Impact
HF3371 would amend Minnesota’s school finance law governing local optional revenue, changing the statutory revenue and levy amounts used to calculate school district funding. It would increase the state’s general education aid commitment beginning in fiscal year 2027 and alter the equalization structure for the second tier of local optional levy, affecting how much districts can raise locally and how much state aid they receive. School districts with limited referendum revenue authority would be the primary beneficiaries, while the Department of Education would administer the additional appropriation and aid calculations.
Sentiment
Based on the bill text and the absence of recorded committee testimony or votes, the available evidence suggests a generally supportive or at least straightforward fiscal-policy purpose: increasing funding flexibility for school districts that have less local taxing capacity. The bill’s framing indicates an effort to address inequities in school finance rather than a controversial policy shift. No formal opposition, amendments, or recorded vote history is provided in the materials.
Contention
The main potential point of contention is fiscal: the bill requires a general fund appropriation and increases state aid obligations, which may raise concerns about cost and budget priorities. A second possible issue is distributional fairness, since the bill specifically benefits districts with limited referendum revenue authority, which could prompt debate over whether the state should target aid this way or use a broader school funding formula. However, no explicit objections or competing viewpoints appear in the provided transcripts or voting history.