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SB 2025

AN ACT RELATING TO EDUCATION -- THE EDUCATION EQUITY AND PROPERTY TAX RELIEF ACT

2026 Regular Session Introduced by Thomas Paolino and 3 co-sponsors

Reforms Rhode Island education aid by blending district and poverty metrics to set state shares, creates a poverty stability fund, and caps annual LEA aid reductions at 1%.

05/19/2026 Committee recommended measure be held for further study
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Bill Summary · SB 2025

Overview

  • Bill: SB 2025 (Education Equity and Property Tax Relief Act)
  • Jurisdiction: Rhode Island
  • Session: 2026
  • Introduced: January 9, 2026; Referred to Senate Finance
  • Sponsors: Senators Rogers, de la Cruz, Paolino, Raptakis (co-sponsors: de la Cruz, Paolino, Rogers, Raptakis)
  • Purpose: Modify the calculation of the state’s share of foundation education aid, create a poverty loss stabilization mechanism, and place a cap on year-to-year reductions in total education aid to local education agencies (LEAs).

1) Main purpose and intent

  • To reform how the state determines its share of foundation education aid for each district, with emphasis on district revenue capacity and high-need (poverty) student concentration.
  • To protect districts from large fluctuations in aid by creating a stabilization fund for poverty-related declines.
  • To cap annual reductions in total education aid (including distributed categorical funds) to LEAs, limiting declines to no more than 1% of the previous year’s municipal education appropriation.

2) Key provisions and changes

A. State share calculation (16-7.2-4)

  • The state share for each district’s foundation aid is calculated using a blended metric:
    • The square root of the sum of:
    • The district’s state share ratio for the community (per § 16-7-20) squared, plus
    • The district’s percent of students in grades PK-6 in poverty status squared,
    • All of that divided by two.
  • A safeguard provision:
    • If the resulting state share ratio is less than the community-based state share ratio (per § 16-7-20(a)) and the district’s poverty status percentage is greater than 50%, then the state share ratio reverts to the community-based ratio.
  • Data scope:
    • Includes charter school and state school students in calculating the district’s state share.
  • Applicability:
    • These ratios feed into the permanent foundation education aid formula (§ 16-7.2-5).

B. Poverty loss stabilization fund (new mechanism)

  • Creates a fund to stabilize districts that experience a decline in the state share ratio (as calculated, subsection a) by more than 2% from the prior year.
  • Funding for the stabilization:
    • The amount equals 50% of the difference in the district’s permanent foundation education aid received in the prior year.
  • Purpose:
    • Mitigate steep year-to-year declines in state support for districts with worsening poverty-related measures.

C. Annual aid reduction cap (district-level protection)

  • In any fiscal year, total education aid to a LEA (including distributed categorical funds) cannot be reduced by more than 1% of the LEA’s municipal education appropriation from the previous year.
  • Purpose:
    • Provide stability and predictability in total funding to LEAs.

D. Effective date

  • Takes effect upon passage.

3) Who or what would be affected

  • Rhode Island local education agencies (LEAs), including districts and charter/state schools included in the calculations.
  • The calculation of state aid for foundation education funding, with particular attention to districts with higher concentrations of poverty.
  • Districts experiencing declines in state share ratios would access funds from the poverty loss stabilization fund.
  • Overall annual aid to LEAs would be capped in terms of reductions, potentially altering budgeting processes for districts.

4) Procedural and timeline aspects

  • The act is introduced and referred to Senate Finance (January 9, 2026).
  • Scheduled for hearing/consideration as of May 15, 2026.
  • As a new act, it would require passage by the General Assembly and signature by the governor to become law.
  • Key implementation detail: takes effect upon passage.

Potential implications and considerations

  • The blend in the state share calculation places weight on both district capacity and poverty concentration, potentially shifting aid toward districts with higher needs and different revenue capacities.
  • The poverty loss stabilization fund provides a safety net, but its size and funding source are not specified beyond the 50% of the prior-year aid differential; actual fiscal impact would depend on appropriations and district-specific dynamics.
  • The 1% cap on annual reductions may help districts plan budgets but could delay necessary adjustments in funding for districts with meaningful need changes.

If you’d like, I can provide a plain-language paraphrase of the calculation formula with a worked example or a side-by-side comparison of the current law vs. the proposed changes.

Compiled from official sources — confirm details with the bill’s official record.

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