Mandated Aid to Education Cannot Be Reduced Through “Doomsday” Budget

The FY 2013 budget (SB 150) as enacted by the General Assembly on the last day of the session contained a number of contingent reductions that would take effect if the Budget Reconciliation and Financing Act of 2012 and the State and Local Revenue and Financing Act of 2012 did not pass.  These contingent reductions, otherwise known as the “Doomsday” budget, would cut local aid by $262.2 million and cut other areas of the State budget by $250 million.

Upon further review, it has been determined that the reduction to the per pupil foundation amount and the 10% reduction to the library and State library network cannot be made since it is constitutionally mandated aid to education.  Reductions to mandated aid can only occur if changes are made to the education statute. The paragraph below from the “90 Day Report” summarizes this issue.

Contingent Reductions: Legislative action on the budget included two sections of contingent reductions, embodied in Sections 42 and 43 of Senate Bill 150 (enacted). Section 42 contains $262.2 million in reductions that were contingent on the failure of Senate Bill 152 (failed) containing a provision to implement sharing of a portion of teacher retirement costs with local jurisdictions. Exhibit A-1.3 includes a detailed list of the reductions that went into effect when Senate Bill 152 did not pass. This includes elimination of the GCEI ($128.8 million), local law enforcement grants ($20.8 million), and supplemental disparity grants ($19.6 million). Because constitutionally mandated aid to education cannot be reduced without enacting changes in underlying education statute, $75.9 million of the reductions in Section 42 cannot be implemented.

Exhibit A-1.3

A county breakdown of reductions in the “Doomsday” budget can be found here.  This chart includes the reductions in the per pupil amount and library and library network, which cannot be reduced because they are constitutionally mandated.

A summary of all actions can be found in the State Aid to Local Government section of the “90 Day Report.”

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