H 7454Funding & Budget

Education - The Education Equity and Property Tax Relief Act

This bill adds Medicaid enrollment as a metric for identifying low-income students to calculate state education funding starting in FY 2027.

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Introduced Jan 30, 2026Committee House Finance

Plain-English Summary

This legislation amends the "Education Equity and Property Tax Relief Act" regarding how state education aid is calculated. Specifically, it updates the method for identifying students from low-income families, known as the "poverty status" for the student success factor. Starting with the Fiscal Year 2027 calculation, a student's enrollment in Medicaid will be included as a criterion for this status. The bill mandates the Department of Elementary and Secondary Education to utilize Medicaid data for these calculations and requires inter-agency reports to ensure accurate data matching and consistency in special education cost reporting.

For younger readers

Schools receive money from the state to help teach students. Some schools get extra money if they have many students whose families do not have a lot of money. Right now, the state uses specific lists to decide which students qualify for this extra help. This new law says that starting in a few years, the state will also look at a list called Medicaid. Medicaid is a program that helps people pay for doctors. By looking at this list, the state can count the students more carefully to make sure schools get the right amount of money.

Who & Where It Applies

Impacted groups

Public School StudentsSchool DistrictsTaxpayersLow-Income FamiliesDepartment of Elementary and Secondary Education

Impacted communities

All

Constitutional & Fiscal Check

None Likely

Estimated cost

Amount unknown

Estimated revenue

None

Bill Analysis

Both viewpoints

For Progressives

Increases the accuracy of identifying high-need students, ensuring that schools serving low-income communities receive the equitable funding necessary to support their student populations.
Utilizes existing government data (Medicaid) to automatically identify eligible students, reducing administrative barriers for families who might otherwise struggle to prove their poverty status.
Promotes a more robust social safety net by acknowledging that healthcare access data is a vital component in understanding and addressing economic disadvantage in education.
Delays the implementation of the Medicaid inclusion until Fiscal Year 2027, potentially leaving schools underfunded for the genuine needs of their students for several more years.
Relies on enrollment in specific government programs, which may still exclude undocumented students or families who are eligible for Medicaid but have not enrolled due to stigma or bureaucratic hurdles.
Focuses on altering the formula inputs rather than increasing the overall base amount of funding provided to all public schools to address systemic underfunding.

For Conservatives

Improves the integrity of the funding formula by using verified government data (Medicaid enrollment) rather than relying on potentially less accurate or self-reported measures.
Mandates stricter reporting and data matching requirements between state agencies, potentially reducing waste and ensuring taxpayer funds are allocated based on proven metrics.
Requires a report on the consistency of high-cost special education data, which could identify inefficiencies or errors in how local districts report spending.
Likely increases total state spending on education by broadening the definition of "high-need" students, resulting in a higher burden on taxpayers.
Expands the administrative state by requiring complex data integration between the education department and health and human services, increasing bureaucracy.
Further entangles the state education system with federal entitlement programs like Medicaid, moving away from local control of education metrics.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 9 additions

SECTION 1. Section 16-7.2-3 of the General Laws in Chapter 16-7.2 entitled "The Education Equity and Property Tax Relief Act" is hereby amended to read as follows: 16-7.2-3. Permanent foundation education aid established.

(a) Beginning in the 2012 fiscal year, the following foundation education-aid formula shall take effect. The foundation education aid for each district shall be the sum of the core instruction amount in subsection (a)(1) of this section and the amount to support high-need students in subsection (a)(2) of this section, which shall be multiplied by the district state-share ratio calculated pursuant to § 16-7.2-4 to determine the foundation aid.

(1) The core instruction amount shall be an amount equal to a statewide, per-pupil core instruction amount as established by the department of elementary and secondary education, derived from the average of northeast regional expenditure data for the states of Rhode Island, Massachusetts, Connecticut, and New Hampshire from the National Center for Education Statistics

(NCES) that will adequately fund the student instructional needs as described in the basic education program and multiplied by the district average daily membership as defined in § 16-7-22. Expenditure data in the following categories: instruction and support services for students, instruction, general administration, school administration, and other support services from the National Public Education Financial Survey, as published by NCES, and enrollment data from the Common Core of Data, also published by NCES, will be used when determining the core instruction amount. The core instruction amount will be updated annually. For the purpose of calculating this formula, school districts’ resident average daily membership shall exclude charter school and state-operated school students.

(2) The amount to support high-need students beyond the core instruction amount shall be determined by:

(i) Multiplying a student success factor of forty percent (40%) by the core instruction per- pupil amount described in subsection (a)(1) of this section and applying that amount for each resident child whose family income is at or below one hundred eighty-five percent (185%) of federal poverty guidelines, hereinafter referred to as “poverty status.” By October 1, 2022, as part of its budget submission pursuant to § 35-3-4 relative to state fiscal year 2024 and thereafter, the department of elementary and secondary education shall develop and utilize a poverty measure that in the department’s assessment most accurately serves as a proxy for the poverty status referenced in this subsection and does not rely on the administration of school nutrition programs. The department shall utilize this measure in calculations pursuant to this subsection related to the application of the student success factor, in calculations pursuant to § 16-7.2-4 related to the calculation of the state share ratio, and in the formulation of estimates pursuant to subsection (b) below. The department may also include any recommendations which seek to mitigate any disruptions associated with the implementation of this new poverty measure or improve the accuracy of its calculation. Beginning with the FY 2024 calculation, students whose family income is at or below one hundred eighty-five percent (185%) of federal poverty guidelines will be determined by participation in the supplemental nutrition assistance program (SNAP). The number of students directly certified through the department of human services shall be multiplied by a factor of 1.6. Beginning with the FY 2027 calculation, a student's enrollment in Medicaid shall also be included in the student success factor. The department of elementary and secondary education shall utilize a student's enrollment in Medicaid in calculations pursuant to this subsection related to the application of the student success factor, in calculations pursuant to § 16-7.2-4 related to the calculation of the state share ratio, and in the formulation of estimates pursuant to subsection (b) of this section; and

(ii) Multiplying a multilingual learner (MLL) factor of twenty percent (20%) by the core instruction per-pupil amount described in subsection (a)(1) of this section, applying that amount for each resident child identified in the three lowest proficiency categories using widely adopted, independent standards and assessments in accordance with subsection (f)(1) of this section and as identified by the commissioner and defined by regulations of the council on elementary and secondary education. Local education agencies shall report annually to the department of elementary and secondary education by September 1, outlining the planned and prior year use of all funding pursuant to this subsection to provide services to MLL students in accordance with requirements set forth by the commissioner of elementary and secondary education. The department shall review the use of funds to ensure consistency with established best practices.

(b) The department of elementary and secondary education shall provide an estimate of the foundation education aid cost as part of its budget submission pursuant to § 35-3-4. The estimate shall include the most recent data available as well as an adjustment for average daily membership growth or decline based on the prior year experience.

(c) In addition, the department shall report updated figures based on the average daily membership as of October 1 by December 1.

(d) Local education agencies may set aside a portion of funds received under subsection

(a) to expand learning opportunities such as after school and summer programs, full-day kindergarten and/or multiple pathway programs, provided that the basic education program and all other approved programs required in law are funded.

(e) The department of elementary and secondary education shall promulgate such regulations as are necessary to implement fully the purposes of this chapter. (f)(1) By October 1, 2023, as part of its budget submission pursuant to § 35-3-4 relative to state fiscal year 2025, the department of elementary and secondary education shall evaluate the number of students by district who qualify as multilingual learner (MLL) students and MLL students whose family income is at or below one hundred eighty-five percent (185%) of federal poverty guidelines. The submission shall also include segmentation of these populations by levels as dictated by the WIDA multilingual learner assessment tool used as an objective benchmark for English proficiency. The department shall also prepare and produce expense data sourced from the uniform chart of accounts to recommend funding levels required to support students at the various levels of proficiency as determined by the WIDA assessment tool. Utilizing this information, the department shall recommend a funding solution to meet the needs of multilingual learners; this may include but not be limited to inclusion of MLL needs within the core foundation formula amount through one or multiple weights to distinguish different students of need or through categorical means.

(2) By October 1, 2024, as part of its budget submission pursuant to § 35-3-4 relative to state fiscal year 2026, the department of elementary and secondary education shall develop alternatives to identify students whose family income is at or below one hundred eighty-five percent (185%) of federal poverty guidelines through participation in state-administered programs, including, but not limited to, the supplemental nutrition assistance program (SNAP), and RIteCare and other programs that include the collection of required supporting documentation, and beginning with the FY 2027 calculations, a student's enrollment in Medicaid. The department may also include any recommendations that seek to mitigate any disruptions associated with implementation of this new poverty measure or improve the accuracy of its calculation.

(3) The department shall also report with its annual budget request information regarding local contributions to education aid and compliance with §§ 16-7-23 and 16-7-24. The report shall also compare these local contributions to state foundation education aid by community. The department shall also report compliance to each city or town school committee and city or town council.

(4) By October 1, 2025, as part of its budget submission pursuant to § 35-3-4 relative to state fiscal year 2027, the department of elementary and secondary education shall submit a report developed in coordination with the department of administration and the Rhode Island longitudinal data system within the office of the postsecondary commissioner. The report shall provide an overview of the process for matching the department of human services program participation data to the department of elementary and secondary education student enrollment records for use in the education funding formula and recommend methods to ensure consistency and accuracy in future matching processes.

(5) As part of its FY 2027 budget submission, the department shall also submit an estimate of foundation education aid that uses expanded direct certification with Medicaid matching in consultation with the Rhode Island longitudinal data system and the executive office of health and human services to identify students whose family income is at or below one hundred eighty-five percent (185%) of federal poverty guidelines, in addition to an estimate under the current law poverty determination.

(6) By December 31, 2025, the department of elementary and secondary education shall also develop and submit a report to the governor, speaker of the house, and senate president on current and recommended processes to ensure the consistency and validity of submitted high-cost special education data from local education agencies.

SECTION 2. This act shall take effect upon passage.