The bill HB2089 modifies the current law regarding the withholding of state aid from community college districts (CCDs) that exceed their expenditure limitations for fiscal years 2024-2025 through 2026-2027. Under the new provisions, if a CCD exceeds its expenditure limitation, the amount withheld will vary based on the percentage of excess expenditures. Specifically, if the excess is less than 5%, 10% of the excess will be withheld; if it is between 5% and 10%, 20% will be withheld; if it is between 10% and 12%, 50% will be withheld; and if it exceeds 12%, the existing statutory withholding amounts will apply.

Additionally, the bill introduces limits on the maximum amount of state aid that can be withheld based on the population of the county in which the CCD is located. For provisional CCDs in counties with populations under 300,000, the maximum withholding is capped at 1% of their budget, while for CCDs in counties with populations under 1,000,000, the cap is set at 0.5%. The bill also includes a retroactivity clause effective from July 1, 2023.