Bill > S1577

Introduced Session

This bill permits school districts to receive loans from the State to support the district's operating budget if the district is anticipating a significant budgetary shortfall. The bill establishes the School District Budget Relief Loan Account for the purpose of providing loans to school districts that have significant budgetary shortfalls that would otherwise require the elimination of multiple nonmandatory programs including: advanced placement courses and other specialized instructional programs; kindergarten; sports teams; student clubs and other programs, such as honor societies; musical programs, including bands; and student body government programs. A school district that has submitted an application for a loan would be allowed to delay submission of a proposed budget, the holding of public hearings on the proposed budget, the date for the notification of nontenured staff, and any additional budgeting deadlines that the Commissioner of Education deems appropriate until a decision has been made to approve or deny the loan application and the school district has been notified of the decision. Beginning in the 2024-2025 school year, a school district is to be able to apply for a loan after the district has received its State school aid notice following the State budget message by the Governor. Within 30 days of enactment, the commissioner is to develop a process by which districts are able to apply for the loans. The loan application is to include the following information: (1) the nature and amount of the budgetary shortfall, including an explanation as to why the district is unable to make sufficient changes to its budget through personnel and program reductions or general fund tax levy increases; (2) an analysis of the impact of the budgetary shortfall on the district's ability to provide a thorough and efficient education, which may include a description of the impact of the budgetary shortfall on student learning and participation in extracurricular activities, and which is required to include a demonstration that the district spent below adequacy in the year prior to the budget year for which the district is applying for the loan; (3) information about the district's general fund tax levy, including a demonstration that, in each of the five years preceding the budget year for which the district is applying for the loan, the district increased its general fund tax levy by at least two percent; and (4) information concerning the district's capital reserve fund balance and capital outlay budget. Prior to submitting the application for a loan to the department, a district is required to first submit its application and a preliminary budget to the executive county superintended and, if a State monitor has been appointed to the district, the district's State monitor. The executive county superintendent and, if applicable, the State monitor are to review the information provided and indicate to the commissioner whether they recommend that the commissioner approve the loan to the district. When making a decision regarding a district's loan application, the commissioner is to consider whether the loan is necessary to ensure the provision of a thorough and efficient education. For any district for which a State monitor has been appointed, the commissioner is required to approve the loan application if the State monitor has indicated that viable budget reductions and general fund tax levy increases are not sufficient to meet the budgetary shortfall. If the commissioner denies a district's loan application, the commissioner shall provide written documentation to the superintendent of the district which shall explain the reasons why the commissioner has determined that the quality of education in the district is better served by denial of the application than by approval.

AI Summary

Committee Categories

Carmen Amato (R)*,  Jim Holzapfel (R), 

Introduced in the Senate, Referred to Senate Education Committee (on 01/13/2026)

Official Document