Required Set-Asides

• Class size reductions. Of a district’s basic general education revenue, an amount must be reserved for class size reduction which must be used to reduce and maintain the average class size to 1 to 17 beginning with kindergarten through third grade.
  
  
• Staff development. An amount equal to two percent of the per pupil basic formula amount ($95.66) must be spent for staff development, although this reserve may be waived if a district’s licensed teachers and school board agree via a vote each year. In addition, a district in statutory operating debt is exempt from this reserve requirement.

Legislated Penalties

• Contract settlement deadline. State aid is reduced by $25 per pupil unit in the first year of a biennium (for example, during the 2005-2006 school year in the 2005-2007 biennium) if a district and the exclusive representative of the teachers in that district have not signed a collective bargaining agreement by January 15 of the year following the expiration the teachers’ contract (teacher contracts expire June 30 of each odd numbered year). The penalty does not apply if the unresolved issues have been submitted to binding arbitration by December 31. For districts that reorganized the previous year, the deadline date is March 15 instead of January 15.