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What the Governor has proposed thus far will not keep pace with inflation. In other words, school revenue will continue to decline in real dollars per pupil. Preliminary indications are that the Governor will propose a 2% increase for each year of the FY 2006-07 biennium, for a total increase over the biennium of about four percent. However, based on the implicit price deflator for state and local government purchases, the rate of inflation from the current biennium (FY 2004-05) to the next biennium (FY 2006-07) will be just over 6%. Some state leaders like to focus on the “formula allowance” as the measure of state revenue. In fact, the formula allowance is only one of many sources of E-12 revenue. It would be more meaningful to look at all state aid to school districts, not just one particular type of aid. Based on the November 2004 forecast, total state aid to school districts will decline by 7.2% from the FY 2004-05 biennium to the FY 2006-07 biennium. In order to keep pace with inflation, state aid will have to increase by approximately $900 million above what is currently projected for FY 2006-07. Anything less than this will represent a real per pupil decline. | ||||||||||||||||||||||
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