What is in the Road Bill that Affects School Funding?
The House and Senate passed a road bill this past legislative cycle. The bill increases the gas tax by 0.02$ a year for the next six years. To increase additional funding for the roads bill beyond the gas tax, legislators included funding from additional auto registration fees. In addition, they increased the maximum tax (now called a fee) on car sales.
Several items have been added to the road bill in order to garner enough support to overcome the Governor’s veto. These items include:
- A capped tax credit for the amount individuals pay in increased gas taxes or on car maintenance, whichever is lesser.
- A tax credit to help lower-income families.
- An increase in the two-wage earner tax credit.
- An increase in the tuition tax credit for attendance at 2- and 4-year colleges.
- A decrease in manufacturers’ property tax rate from 10.5% to 9% over six years.
A portion of these manufacturers’ taxes fund school district operations and district debt service for school construction and renovation projects. School districts are then reimbursed for the lost revenue gained from these manufacturer property taxes. Additionally, gas tax/vehicle maintenance credits will not affect the General Fund. However, the other tax credits, and the reimbursement for the reduced manufacturer’s tax rate, are projected to decrease available General Fund dollars by $104.7 million by Fiscal Year 2023-24.