Section 296 of the School Aid Act states that if School Aid Fund (SAF) appropriations exceed the amount of SAF available for expenditure in any given fiscal year, the state must prorate payments to school districts, intermediate school districts (ISDs), other entities receiving SAF under Article I, and community colleges and public universities.

After the Department of Treasury notifies the State Budget Director that proration is necessary, the State Budget Director must notify the legislature at least 30 calendar days or 6 legislative session days (whichever is greater) before payments are prorated.

Within the 30-calendar-day or 6-session-day period, the legislature may prevent proration by doing either of the following:

  • Enacting legislation appropriating additional funds from the general fund, Budget Stabilization Fund, or other source to fund the projected shortfall
  • Reducing appropriations in order to avoid a proration

The proration for each group is determined by calculating the percentage of SAF that the group receives and multiplying that percentage by the total proration amount. Certain protected sections must remain fully funded.

Click on the button below to learn more about the process from the House Fiscal Agency