This bill revises the framework for calculating costs related to providing an adequate education, extraordinary need grants, and education grants, while also introducing fiscal capacity disparity aid grants. Starting July 1, 2026, the per pupil cost for adequate education will increase from $4,100 to $4,351, with additional differentiated aid for students eligible for free or reduced-price meals, English language learners, and those receiving special education services. The bill establishes a new section for fiscal capacity disparity aid, which will provide grants based on a municipality's equalized valuation per pupil, including specific thresholds for eligibility and grant amounts. Key changes include the deletion of previous cost figures and the insertion of updated amounts for various aid categories, along with a provision for a 2% annual adjustment for certain grants beginning July 1, 2027.

Additionally, the bill introduces new definitions for special education categories, including Category B for students receiving services for 80% or more of the school day, Category C for those in separate schools or residential placements, and a "Catch All" category for students not fitting into the defined categories. The proposed changes are expected to increase adequacy grants to school districts by approximately $7,139,756 for FY 2026, raising the total adequacy grant from $716,948,319 to $724,088,075. Charter school grants and education freedom accounts (EFAs) are also projected to see increases. The bill outlines specific per pupil aid amounts for each special education category, significantly raising funding for Categories A, B, C, and the "Catch All" category, while eliminating the previous special education per pupil aid amount. The impact on future fiscal years remains uncertain but is anticipated to be similar to FY 2026.

Statutes affected:
Introduced: 198:40-a
As Amended by the House: 198:40-a, 198:40-d, 198:41