This bill modifies the existing school district property tax cap law by establishing that the cap on tax levy increases will be the greater of the percentage increase in the Consumer Price Index (CPI) or two percent. It also introduces new provisions allowing for adjustments to the tax levy for school districts that are spending below adequacy, ensuring they can raise their general fund tax levy to meet necessary funding levels. The bill amends the calculation of allowable adjustments for increases in enrollment, health care costs, and pension contributions, replacing previous fixed percentage limits with more flexible criteria based on CPI and specific thresholds.

Additionally, the bill appropriates $67.9 million from the Property Tax Relief Fund to provide additional State school aid to school districts that are projected to experience reductions in State aid during the 2025-2026 school year. This funding aims to ensure that these districts receive at least the same amount of State school aid as they did in the 2024-2025 school year, thereby supporting approximately 200 school districts and preventing any loss in funding. The provisions of the bill are set to take effect immediately, with specific sections applying to the adjusted tax levies raised in the second full school year following enactment.

Statutes affected:
Introduced: 18A:7F-38