House Bill 1630: Funding Formula Technical Amendments

February 8, 2025April 2, 2025 Bill Tracker

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Conferees failed to file a conference report by the 3/31 deadline, causing this bill to die in conference.

Explanation of the Bill

As amended by the Senate, House Bill 1630 makes amendments to the Mississippi Student Funding Formula. 

In addition, it makes amendments to laws around the hiring of retired teachers, creates new financial literacy course requirements, directs school districts to establish cell phone bans, and allows school boards to provide health insurance for their members. 

Correcting Drafting Errors

Last session, the legislature passed the Mississippi Student Funding Formula (MSFF), which replaced the Mississippi Adequate Education Program (MAEP) as the state’s public school funding formula. Due to the length and complexity of the bill, some drafting errors were overlooked before final passage. The conference report missed a few references to MAEP or “adequate education program.” The bill corrects these drafting errors. These changes are purely technical in nature and not controversial. 

This change was included in the House version of the bill. 

Correcting the Definition of Net Enrollment

One important technical change in this bill is a correction to the definition of net enrollment for school districts. The conference report last session introduced errors to 37-151-207(a) by omitting sentences which made the remaining language nonsensical. The update corrects this problem to define the school district net enrollment to be used for formula calculations as “the school district’s net enrollment for months two (2) and three (3) for the preceding school year for which funds are being appropriated.”

This change was included in the House version of the bill. 

Funding for CTE in Middle School

The current funding formula includes formula weights for students who take career and technical education courses in high school. HB 1630 adds funding formula weights for seventh and eighth grade students who take career and technical education courses.

This change was not included in the House version of the bill. 

Rehiring of Retired Teachers

The current law allows districts to hire retired teachers in critical shortage districts. A retired teacher is eligible to teach for up to five years, and they may receive their retirement benefits in addition to a salary. In such cases, the district determines the salary the teacher is owed based on the state’s minimum salary schedule, and it can allocate up to 125% of this amount towards the employee. The district pays the teacher up to 50% of this amount, while the other 50% must be paid to PERS as a pension liability participation assessment. 

HB 1630 amends this so that the district could allocate up to 150% of the appropriate salary towards the retired employee (while retaining the requirement that 50% of this must be directed to PERS). In effect, retired teachers who were rehired could receive up to 75% of a full salary, an increase from the current 62.5%. 

HB 1630 removes a provision requiring a retiree to have at least 30 years of experience in order to be rehired as a teacher in critical shortage districts. It also clarifies that retired administrators (not just employees who retired as teachers) may return to the classroom to teach, with the same restrictions and requirements as retired teachers. 

In addition, the bill allows local education agencies (LEAs) to pay all or a portion of health insurance premiums for retired employees returning to work as teachers. 

This change was not included in the House version of the bill.

Insurance for School Board Members

The bill allows local school boards to vote to provide its members and their dependents with health insurance, provided that the insurance is paid with local funds and not state funds. 

This change was not included in the House version of the bill. 

Financial Literacy Courses

The bill requires the Mississippi Board of Education to incorporate financial literacy components within existing curriculum for students in grades 6-8, to take effect by the 2026-2027 school year. It also requires high school students to pass a ½ Carnegie Unit course in personal finance, or a full Carnegie Unit course in which at least half of the content is related to financial literacy, beginning with the class of 2031. 

It would establish the Financial Literacy Trust Fund in the State Treasury to fund financial literacy education. The fund would be administered by the Mississippi Board of Education. 

This change was not included in the House version of the bill. 

Cell Phone Ban

The bill requires public school districts to adopt policies restricting the use of cell phones during class, or while under the supervision of school employees, by January 1, 2026. Such policies could include exceptions in the following situations:

• In the case of an emergency;
• When a licensed medical provider has determined that the student must have a cell phone for their health or well-being; or
• When a cell phone is required by a student’s IEP.

If a school district failed to adopt a policy restricting the use of cell phones, they would lose funds under the state funding formula for each day of noncompliance. 

This change was not included in the House version of the bill. 

The House version of this bill made several changes that the current version leaves out. These changes include: 

Certain Drafting Errors

The House version corrected a sentence about net enrollment incorrectly inserted into the component of “operation and maintenance of plant” of the base student cost calculation, likely due to last-minute copy and pasting during the creation of the conference report. 

Specifying the Grade Levels of Funded Students

The House version of the bill updated the definition of net enrollment to specify that the calculation should include students in grades K-12. The original law did not specify which grade spans to include in this calculation, leading to confusion as to whether pre-K students should be included in student counts.

Deleting Reconciliation for School Districts

The original law contained a provision to require reconciliation of state funds for school districts at the end of a school year. Because no one can precisely predict enrollment for an upcoming school year but funds must be appropriated in advance, state education funding across the country is based either on a school district or charter school’s prior year’s enrollment or some reasonable projection of upcoming enrollment. States then commonly reconcile this estimated or prior year enrollment with actual enrollment at the end of a school year and adjust funding in a future year to account for the difference. Although this means that districts or charter schools which exceed their funded enrollment can receive additional funds, it also means that districts or charter schools whose enrollment was lower than their funded enrollment must pay money back. (In practice, this often means simply receiving fewer funds in the following year.)

Under long-standing practice, Mississippi charter schools are funded based on their projected enrollment according to their charter contract and then this is reconciled with their actual enrollment for the relevant school year. If a charter school does not enroll their full projected enrollment then they have to pay the state back the base student cost for those children out of their following year’s funds. The new formula left this practice intact. 

However, school districts have never faced this type of “true up” of their enrollment. Under MAEP, school districts were funded each year based on prior year enrollment with no reconciliation. For districts that grew year over year, they had to wait a year for funding to catch up. For districts that declined in enrollment year over year, they always had an additional year of funding for students they no longer served. MSFF introduced a reconciliation process for school districts to take effect at the end of this school year (2024-2025).

Although reconciliation is a common practice nationwide, Mississippi school districts are unprepared for this new process, and many have likely not made contingency plans if they would be affected. The legislature has also not reviewed impact data to understand what this might mean for districts statewide. Though there is a three-year hold harmless, districts that received above their hold harmless could still experience an unexpected reduction in funds. As a result, the House version of the bill deleted the reconciliation process for school districts. This was one of the most important technical changes in this bill.

Clarifying Hold Harmless

The House bill clarified that if a reconciliation is applicable, the reconciled amount must not be lower than the hold harmless guarantee in 37-151-215 for fiscal years 2026 and 2027.

University-Based Programs

The conference report from last session neglected to update the code for university-based programs to be based on MSFF. The House bill updated the code to provide for funding from MSFF as intended. 

Updating References to Charter Schools and the Mississippi Achievement School District

Nearly all of the remainder of the changes in the House bill made relevant codes applicable to charter schools. Due to current state law, charter schools must be explicitly named for a code to be applicable because charter schools are not included in the definition of “school district” or “district” as it appears in Title 37, the state education code. In the original bill, some sections inconsistently added charter schools whereas other sections omitted them by accident. 

The final change in the House bill deleted references to the Mississippi Achievement School District where no longer applicable.

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