H 8157Funding & Budget

Education - The Education Equity and Property Tax Relief Act

This bill increases state financial assistance for school districts that experience a significant drop in state funding compared to the prior year.

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Introduced Feb 27, 2026Committee House Finance

Plain-English Summary

This legislation amends the "Education Equity and Property Tax Relief Act" regarding how state aid is calculated for school districts. Specifically, it adjusts the "poverty loss stabilization fund." Currently, if a school district experiences a decline in its state funding share ratio of more than 2% from the previous year, the state provides extra funding covering 50% of that loss. This bill increases that coverage to 75%. Essentially, it provides a larger financial cushion for school districts facing significant reductions in state education aid.

For younger readers

Schools get money from the state government to help pay for teachers, books, and buildings. Sometimes, the math used to decide how much money a school gets changes, and a school might be set to lose a lot of money compared to the year before. This bill says that if a school is going to lose a big chunk of money, the state will help them out more than they used to. Instead of covering half of the missing money, the state will now cover three-quarters of it, helping the school keep running smoothly.

Who & Where It Applies

Impacted groups

School DistrictsPublic School StudentsLocal Property TaxpayersTeachers and School StaffMunicipal Governments

Impacted communities

All

Constitutional & Fiscal Check

None Likely

Estimated cost

Amount unknown

Estimated revenue

None

Bill Analysis

Both viewpoints

For Progressives

Protects public schools from sudden, drastic budget cuts that could lead to layoffs of teachers or the elimination of essential student programs.
Ensures greater stability in the public education system, allowing administrators to plan for the long term without fear of immediate fiscal cliffs.
Demonstrates a commitment to maintaining robust funding for public services, ensuring that students do not suffer due to fluctuations in funding formulas.
May inadvertently direct scarce state resources to wealthier districts whose funding is being cut because their property values (and ability to pay) have increased, rather than prioritizing the poorest districts.
Reduces the total amount of money available in the general fund that could otherwise be used for new social programs or targeted equity initiatives.
Acts as a temporary patch to the funding formula rather than addressing systemic issues regarding how poverty and need are calculated in education.

For Conservatives

Helps prevent local property tax spikes, as towns would otherwise have to raise taxes to make up for the sudden loss of state education aid.
Provides fiscal predictability and stability for local municipal governments, allowing for better budgeting and financial planning.
Supports existing institutions and community stability by preventing the chaotic restructuring of local school systems.
Increases government spending by bailing out districts that the funding formula determined should receive less money, interfering with the efficient allocation of resources.
Disregards the mathematical formula established by law; if a district's metrics show they need less aid, the state should not artificially subsidize them.
Creates a dependency on state stabilization funds rather than encouraging districts to streamline operations or adjust to their actual demographic reality.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 2 additions · 1 deletion

SECTION 1. Section 16-7.2-4 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: 16-7.2-4. Determination of state’s share.

(a) For each district, the state’s share of the foundation education aid calculated pursuant to § 16-7.2-3(a) shall use a calculation that considers a district’s revenue-generating capacity and concentration of high-need students. The calculation is the square root of the sum of the state share ratio for the community calculation, pursuant to § 16-7-20, squared plus the district’s percentage of students in grades PK-6 in poverty status squared, divided by two. If this calculation results in a state share ratio that is less than the state share ratio for the community calculated pursuant to § 16-7-20(a) and that district’s poverty status percentage as defined in § 16-7.2-3(a)(2) is greater than fifty percent (50%), the state share ratio shall be equal to the state share ratio for the community calculated pursuant to § 16-7-20(a).

(b) For purposes of determining the state’s share, school district student data used in this calculation shall include charter school and state school students. These ratios are used in the permanent foundation education aid formula calculation described in § 16-7.2-5.

(c) There shall be a poverty loss stabilization fund for districts that experience a decline in the state share ratio calculated pursuant to subsection (a) of this section from the prior year of more than 2.0 percent (2%). The amount shall be equal to ~~fifty percent (50%)~~ seventy-five percent (75%) of the difference in the amount of permanent foundation education aid received pursuant to § 16- 7.2-3 received in the prior year.

SECTION 2. This act shall take effect upon passage.