OKLAHOMA CITY – Public schools would be able to accumulate unlimited carryover funds under a bill that cleared the Oklahoma Senate last Monday.
Senate Bill 1126 would remove the caps currently in place carryover funds, its author state Sen. Jessica Garvin said. Garvin said the bill also requires public schools to report those funds to the state Department of Education. The measure passed the Senate on a 32-15 vote.
Carryover funds are money school districts hold in reserve for emergencies or to use during July when districts don’t receive a state aid payment.
“We must stop penalizing our local districts for being fiscally responsible and wanting to save unused general funds for essential future expenses,” Garvin, a Republican from Duncan, said.
Though most public schools have extra – that is, carryover – funds from year to year, the practice has drawn both praise and criticism. Last year, the Legislature passed House Bill 2078, which altered the state’s funding formula and allowed school districts to carryover additional money.
Public education groups, including the Oklahoma State School Boards Association and the Organization of Rural Oklahoma Schools, opposed the bill. The measure was signed by Gov. Kevin Stitt.
A position paper, circulated by the OSSBA, said the bill allowed more than $900 million in combined carryover/emergency funds to be banked by schools. Documents from the state Department of Education show that public schools reported $982 was carried over and the end of the 2020 budget year, about 8% more than 2019.
At that time, State School Superintendent Joy Hofmeister said public school leaders had been unwilling to spend the extra money because they were concerned about next funding cycle due to the COVID-19 pandemic.
In a media statement, Garvin said the change would eliminate the wasteful and unnecessary spending that often happens as school officials seek to avoid losing money for the next fiscal year.
“My bill will encourage and support responsible long-term strategic planning to improve educational outcomes through technological and infrastructure upgrades, hiring and retention incentives, and other critical areas,” she said. “School financial decisions should be based on needs, not calendar deadlines.”
Oklahoma’s school funding law currently includes restrictions on how much a school district may carry over from one fiscal year to the next in its general fund. A school district’s state aid can be reduced if its carryover funds exceed the caps. Those penalties, Garvin said, were waived last year and the waivers will continue until the 2024 fiscal year.
Should Garvin’s bill become law, the cap on carryover funds would be eliminated. The bill now moves to the House of Representatives. State Rep. Marcus McEntire, R-Duncan, is listed as a co-author of the proposal.
State lawmakers have until the end of May to finish their work.