The Legislature should use tax and revenue anticipation notes to advance funds to local school districts during the first two months of the school year, to better meet the cash needs of public schools.
Most school districts run a cash deficit during the first two or three months of the school year.
Starting in November, as local property taxes are received, cash receipts begin to meet the cash required to finance operations. While many school districts can borrow funds to finance their operations, costs are associated with these loans, which means less money for instruction. Alternatively, school districts can choose to maintain larger fund balances to finance the shortfall they experience during the first two months of the school year. The state distributes money to school districts primarily based on the taxable property value per student.3 Districts are placed into one of three categories based on the relationship between the district's wealth per student and the statewide average wealth per student. Category 1 school districts have wealth per student less than one-half of the statewide average.