Fact Sheet: Excess Spending Threshold Summary and Tax Rate Impact
A district with an education spending amount per long term weighted average daily membership (less applicable exclusion) greater than the excess spending threshold incurs an additional tax for the amount over the threshold. The threshold amount is calculated annually using statewide data from a legislatively determined prior fiscal year, multiplied by a given percentage, and inflation.
Act 183 of 2024 - the “Yield Bill” - rebased the excess spending threshold to be the fiscal year 2025 average statewide per pupil spending plus New England Economic Project inflation from FY25 to current year, plus eighteen percent.
District per pupil spending is current year per pupil spending plus one-hundred and fifty percent capital reserve funds (24 V.SA. § 2804 (b)) more than five-years old.
The single exemption for excess spending is districts with voter-approved bonds, approved before July 1, 2024. The amount of principal and interest payments for the voter-approved bonds shall not be included in education spending for purposes of excess spending calculations.