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Compensatory Revenue Flexibility Bills Presented

By March 3, 2015 No Comments

Both the House and Senate Education Committees heard bills that would give districts more flexibility in allocating their compensatory revenue accounts.

The House Education Finance Committee heard two bills on Tuesday. HF567 is sponsored by Rep. Anna Wills (R-Apple Valley) and HF1222 is sponsored by Jerry Hertaus (R-Greenfield).

Compensatory revenue is the second largest component of general education revenue after the basic formula allowance. Compensatory revenue is site-based revenue, calculated on the characteristics of each school site. The formula that generates compensatory revenue is a concentration formula based on each school building’s count and percentage of students who are eligible for free or reduced price meals.

Compensatory revenue must be used to meet the educational needs of pupils whose progress toward meeting state or local content or performance standards is below the level that is appropriate for learners of their age.

Under current law, compensatory revenue must be reserved in a separate account, and the revenue must be distributed to, and spent on, qualifying programs at each school site. At least 90 percent of compensatory revenue must be spent at the school site where it is earned. Up to 5 percent of the compensatory revenue may be reallocated according to a plan adopted by the school board, and up to another 5 percent of the revenue may be used for early education programs.

Rep. Wills’ HF567 gives the district authority to allocate up to 50 percent of the revenue according to a plan adopted by the school board. Rep. Hertaus’ HF1222 gives the district authority to allocate all of its compensatory revenue according to a plan adopted by the school board.

SF558 (Sen. Melissa Wiklund, DFL-Bloomington) is the companion to the Wills bill. The Senate E12 Committee  on Feb. 26 heard that bill.

The two House bills and one Senate bill were laid over for possible inclusion in their education omnibus bill. Hertaus has no Senate companion bill at this time.