During the Barbour administration, legislators made a change to the school funding law that calls for a full recalculation of the MAEP base student cost only once every four years, instead of annually as the original statute required. In the intervening years, the amended law calls for the MAEP full funding amount to be determined by applying the inflation rate (CPI) to what was intended to be the operational cost component of the formula (expenditures subject to inflation), which were, at the time, estimated to be 40 percent of school district budgets.
Since that time, it has become clear that a much smaller percent of school district budgets are spent on operational costs. The vast majority of school district budgets are spent on teacher salaries and benefits, which do not rise due to inflation.
The Senate proposal would change the portion of the base student cost that is adjusted for inflation from 40 percent to 25 percent. It also would make the CPI component less volatile by applying the 20-year average inflation rate (CPI) instead of the annual rate.