Summary of HB 7420 (Education Equity and Property Tax Relief Act)
Session: 2026 | Jurisdiction: Rhode Island
Purpose and Intent
HB 7420 proposes broad revisions to Rhode Island’s education-finance system and certain literacy standards, with a focus on equity, state funding sufficiency, unfunded mandates, and alignment between K-12 standards, curriculum, and postsecondary opportunities. The bill explicitly aims to address unfunded or partially funded education costs and to stabilize districts facing fiscal pressures, while also updating standards, curriculum frameworks, and dual enrollment policies.
Key Provisions and Changes
1) Determination of the State’s Share (Foundation Education Aid)
- The state share for each district’s foundation aid would be calculated using a new formula that blends:
- The district’s revenue-generating capacity (via a state share ratio) and
- The district’s poverty concentration in grades PK-6.
- Formula: the square root of (state share ratio for the community, squared) plus (district PK-6 poverty percentage, squared), all divided by two.
- If the new district-state share ratio falls below the community ratio and the district’s poverty rate exceeds 50%, the state share ratio is set to the community ratio.
- Data used includes charter school and state school students.
- Introduction of a Poverty Loss Stabilization Fund: if a district’s state share ratio declines by more than 2% year-over-year, the fund provides 50% of the difference between that district’s prior-year permanent foundation aid and the current year’s assistance.
- A transparency/reporting requirement: the Department of Revenue (DOR), with local districts, must publish a costs-of-unfunded/partially funded items report for the governor and public.
2) Categorical Programs and State-Funded Expenses
HB 7420 adds and clarifies state funding for several categorical programs beyond foundation aid:
- Excess costs for special education (with thresholds at 2x, 3x, 4x, and 5x the core foundation amount; funds prorated if demand exceeds appropriations).
- Career and Technical Education (CTE) costs, with criteria to allocate funds and prorate if over-requested.
- Pre-K access programs (early childhood).
- Central Falls, Davies, and the Met Center Stabilization Fund to stabilize funding for these districts, including sharing costs outside the permanent foundation formula (transportation, facilities, retiree health benefits) and defining a transition period.
- Excess costs for transporting students to out-of-district nonpublic schools, and costs for transporting within regional districts (with shared costs).
- Regionalization bonus for regionalized districts (e.g., two-year ramp: 2% of state share in year 1, 1% in year 2, then ceasing in year 3). Chariho’s bonus allocated to member towns; funds prorated if over-committed.
- State support for School Resource Officers (SROs): from FY2019 for three years, districts receive 50% reimbursement for salaries/benefits, with per-position requirements and restrictions.
- Effective July 1, 2026: the state assumes the cost of dual enrollment programs (e.g., Run Start, NEIT early college programs) as a categorical expense.
3) Curriculum Standards and Frameworks
- Section 16-22-30 and 16-22-31 (Statewide standards and curriculum frameworks) undergo modernization to emphasize:
- PK-12 standards for core subjects with clear outcomes and high expectations.
- Inclusion of diverse voices and cultures; avoidance of stereotypes; attention to diverse learning needs and impediments.
- Public availability and periodic review cycles (reviews in 2025, 2029, 2033, every 4 years).
- A requirement that, starting July 1, 2026, districts may implement lower-cost curriculum programs substantially similar to approved ones, upon petition to RIDE.
- A pause on purchasing new curricular materials and related professional development starting July 1, 2026, until further legislative action.
4) Regional Vocational Education
- The Rhode Island Board of Education would oversee regional vocational schools, including staffing and enrollment timelines (effective timelines for sending districts’ notification).
5) Dual Enrollment Funding and Policy
- The state would fund all costs for dual enrollment programs as of July 1, 2026, with a statewide policy to be regulated; a workgroup would advise on funding, supports, and shared costs.
- Grade twelve students in full-time dual enrollment on college campuses may be exempt from certain standards.
Effective Date
- The act takes effect upon passage.
Impact Overview
- Aims to more equitably distribute foundation aid using poverty and capacity factors.
- Establishes stabilization funds to offset declines in state support and to aid districts with structural challenges.
- Expands and clarifies state funding for categorical programs (special education, CTE, transportation, regionalization, SROs, and dual enrollment).
- Prescribes modernization and public transparency for statewide standards and curriculum frameworks, with a transitional pause on new curricular purchases.
- Increases postsecondary access through state-funded dual enrollment.
