S 2025Funding & Budget

Education - The Education Equity and Property Tax Relief Act

This bill limits how much state funding school districts can lose from one year to the next.

Held for study

Population
Affected

Introduced Jan 9, 2026Committee Senate Finance

Plain-English Summary

This legislation amends the "Education Equity and Property Tax Relief Act" to provide financial stability to school districts facing reductions in state aid. It creates a "poverty loss stabilization fund" for districts that experience a drop in their state funding ratio of more than 2% from the previous year. Additionally, the bill mandates that the total education aid provided to a local education agency cannot be reduced by more than 1% of the municipality's education appropriation from the prior fiscal year, ensuring that funding cuts do not happen abruptly.

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 schools might end up with less money than they had before. This bill makes a new rule to stop the state from taking away too much money at one time. If a school was going to lose a lot of money, the state has to give them extra help so they can keep running smoothly.

Who & Where It Applies

Impacted groups

Public School StudentsSchool District AdministratorsTeachers and School StaffMunicipal OfficialsProperty Taxpayers

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 drastic budget cuts, ensuring that students and teachers maintain access to necessary resources and stable learning environments.
Safeguards districts with high concentrations of poverty from sudden financial instability caused by fluctuations in data or funding formulas.
Strengthens the social safety net by ensuring that the state government maintains a baseline level of support for education, preventing austerity measures at the local level.
May inadvertently subsidize wealthier districts that no longer qualify for higher aid levels based on need, diverting potential resources from the most disadvantaged communities.
Acts as a temporary fix rather than a systemic reform, potentially delaying necessary overhauls to make the funding formula more equitable long-term.
Could reduce the pressure on the legislature to identify new, progressive revenue streams to fully fund education, relying instead on stabilization caps.

For Conservatives

Provides fiscal predictability for municipalities, allowing town councils and administrators to plan budgets without fear of sudden, massive revenue shortfalls from the state.
Helps prevent sudden local property tax increases that towns might otherwise impose to cover unexpected gaps in state education aid.
Supports stability in local governance, preventing the chaotic administrative churn that often accompanies severe budget reductions.
Interferes with the efficient allocation of taxpayer dollars by continuing to fund districts at higher levels than the data-driven formula dictates.
Increases state spending obligations by creating a "stabilization fund" bailout mechanism rather than allowing fiscal adjustments to happen naturally.
Reduces the incentive for school districts to economize or adjust their operations in response to changing demographic realities, such as shrinking enrollment.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 4 additions

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%) of the difference in the amount of permanent foundation education aid received pursuant to § 16-7.2-3 received in the prior year.

(d) In any given fiscal year, the total education aid paid to a local education agency, including distributed categorical funds, shall not be reduced by more than one percent (1%) of the municipal education appropriation to the local education agency in the previous fiscal year.

SECTION 2. This act shall take effect upon passage.