State Funding and Recent Changes

The constitutional duty

Article IX, Section 1 of the Idaho Constitution reads: "The stability of a republican form of government depending mainly upon the intelligence of the people, it shall be the duty of the legislature of Idaho, to establish and maintain a general, uniform and thorough system of public, free common schools." Everything in this lesson is the Legislature's answer to that sentence, and twice in the last 35 years Idaho's Supreme Court has been asked whether the answer was good enough.

The ISEEO cases

A coalition of school districts called Idaho Schools for Equal Educational Opportunity (ISEEO) sued the state in the early 1990s. The litigation produced a string of Supreme Court decisions, summarized in the court's own 2005 opinion:

Year	Decision	What it held
1993	ISEEO v. Evans, 123 Idaho 573	The coalition had standing, and defining what "thorough" means is the courts' constitutional job.
1996	ISEEO v. State, 128 Idaho 276	Legislative changes after 1993 did not make the case moot; sent back to the district court to decide whether the funding system met the thoroughness duty.
1998	ISEEO v. State, 132 Idaho 559	Upheld the State Board's facilities rules as meeting the thoroughness standard and said a safe environment conducive to learning is part of a thorough system; sent back the narrower question of whether the Legislature had provided a way to pay for such facilities.
2001	District court findings	Relying on loans alone was inadequate for poorer districts to fix unsafe buildings.
Dec. 21, 2005	ISEEO v. State, Docket No. 29616	Affirmed that Idaho's method of funding school facilities was unconstitutional. Left the remedy to the Legislature and kept jurisdiction to review later efforts.

The 2005 court noted the Legislature's recent steps, such as a loan and grant fund and a building safety act, but found no assurance of continued funding. It declined to rule on whether coursework and programs met the thoroughness standard, because that question was not before it. No court ordered the facilities laws of 2023 and 2024 described below. They still put state money into the same problem the ISEEO cases were about: districts that cannot pass bonds or afford safe buildings on local property tax alone.

Where the money comes from

The State Department of Education publishes each district's and charter's combined revenues and spending in its Financial Summaries of Idaho Schools. The 2024-25 workbook has one sheet per local education agency, 191 in all. Adding the "TOTALS" column across every sheet gives the statewide picture for July 1, 2024 to June 30, 2025:

Source	All funds, 2024-25	Share	General (M&O) fund only	Share
State sources	$3,896,700,192	74.8%	$2,648,529,472	83.8%
Local property taxes	$461,611,032	8.9%	$358,771,728	11.4%
Federal sources	$375,268,664	7.2%	$11,984,926	0.4%
Other local (fees, interest, meals, donations)	$337,709,624	6.5%	$110,900,558	3.5%
Other sources	$135,820,723	2.6%	$28,482,850	0.9%
Total revenue	$5,207,110,235	100%	$3,158,669,534	100%

Our sum of SDE's workbook; shares are rounded. State sources include facilities fund money that flows to capital projects and debt service funds. Federal money sits mostly in special revenue and child nutrition funds, which is why it nearly vanishes from the general fund column.

Two history points explain why the state share is so high. In 2006 the Legislature, in a special session, replaced most school maintenance and operation property taxes with state money, as the property tax course explains in Where the Money Goes. Since 2023 the state has also been paying down voter-approved school levies with facilities money. What remains of local school property tax is mostly supplemental levies, bonds and plant facilities levies that voters approved, covered in lessons 05 through 07.

Shares vary widely by district. A district with a large supplemental levy and a recent bond may draw a fifth or more of its revenue from local taxes. A district with no levies may draw almost nothing locally. Every district's own sheet is in the SDE workbook.

The formula: from attendance to dollars

The state's main school formula is the educational support program in Idaho Code 33-1002. Read slowly, it works step by step.

1. Total state funds. Add the general fund appropriation, the public school income fund (including endowment earnings) and miscellaneous revenue.
2. Take out the programs paid off the top. Subtract the amounts for transportation, tuition equivalents, border and special education contracts, salary-based apportionment for staff, unemployment insurance, technology, the Idaho Digital Learning Academy, charter facilities, advanced opportunities, literacy intervention, counseling, master teacher premiums, a safe environment allocation of $300 per support unit, and other items the statute or appropriation bill lists.
3. Count support units. For each district, divide average daily attendance by divisors from tables for kindergarten, elementary, secondary, exceptional education and alternative schools. Smaller schools get smaller divisors and minimum unit counts so they can staff a school at all. Add the units statewide.
4. Find the distribution factor. Divide what is left after step 2 by the total state support units. That is the money per unit.
5. Pay each district. Each district's allowance is its support units times the distribution factor, plus its share of the step 2 programs.

Some of the divisors from 33-1002(4) for larger schools:

Category	Size condition	Divisor (ADA per support unit)
Kindergarten	41 or more ADA	40
Elementary, grades 1 to 3	300 or more ADA	20
Elementary, grades 4 to 6	300 or more ADA	23
Secondary, grades 7 to 12	750 or more ADA	18.5
Secondary	400 to 749.99 ADA	16 (minimum 28 units)
Exceptional education	14 or more ADA	14.5
Alternative school (grades 6 to 12)	12 or more pupils	12

Staff and salaries

Most of the state's money goes to people, through salary-based apportionment. 33-1004 converts support units to staff allowances: units times 1.021 for instructional staff, 0.079 for pupil service staff, 0.075 for administrators and 0.375 for classified staff. A district must show it actually employs the instructional staff it is funded for, though it may employ up to 9.5 percent fewer instructional and pupil service positions than funded without losing money. 33-1004E then multiplies the instructional and pupil service allowances by the weighted average of the career ladder amounts, sets minimum pay on each rung, and figures administrators' apportionment from an experience and education index times a base salary of $46,668 on and after July 1, 2025. Districts set their own salary schedules; the state amount is what the formula sends, not what any one teacher must be paid above the minimums.

Discretionary money and health insurance

What districts call "discretionary" is the money per unit they can spend as they choose. Under 33-1018, the appropriation states an estimate of discretionary funding per support unit, and if the actual figure differs, the public education stabilization fund absorbs the difference. For fiscal 2027, SDE's summary shows $23,472 per unit for on-site schools, unchanged since fiscal 2025 (fiscal 2024 was $19,537), and $19,723 for fully virtual schools after a 2026 trailer bill. Health insurance money is now split: $25,063.50 per unit for schools on the state's group health plan and $24,273.43 for those that are not.

Protections and counting rules

• Decline cushion. Under 33-1003(1), a district whose attendance drops 3 percent or more may be funded on the prior year's attendance minus 3 percent. Charter schools are excluded.
• Which weeks count. The final July settlement uses attendance for the 28 best weeks of the school year (33-1009(3)(a)), and the February recalculation uses attendance through the first Friday in November.
• Enrollment counts. Separately, 33-1027, added in 2019, requires official enrollment counts on October 1, December 1, February 1 and April 1. A 2026 amendment (House Bill 846) says a student with unexcused absences for the first 10 consecutive days of the school year may not be counted as enrolled until the student attends. As of October 2026, the support unit tables in 33-1002 still run on average daily attendance.

How big the budget is

The State Department of Education's April 2026 summary of the fiscal 2027 appropriation gives the numbers. The table combines public schools, the Idaho Educational Services for the Deaf and the Blind, central services and the Idaho Digital Learning Academy, as SDE does.

Revenue	FY 2026 original	FY 2026 revised	FY 2027	Change from revised
General fund	$2,754,658,600	$2,732,292,100	$2,750,379,700	+0.7%
State dedicated revenue (endowment, lottery, other)	$96,249,800	$96,249,800	$105,411,400	+9.5%
Federal revenue	$260,647,800	$268,447,800	$268,447,800	0.0%
Total	$3,111,556,200	$3,096,989,700	$3,124,238,900	+0.9%

Within that budget, SDE lists $1,084,817,500 for career ladder salaries in fiscal 2027, unchanged from revised fiscal 2026, along with $113,901,900 for transportation (then reduced by $7.5 million in distributions by a 2026 trailer bill), $72,812,000 for literacy intervention, and a cut in the Idaho Digital Learning Academy line from $25.8 million to $12.3 million. Support units were held at 15,722 statewide. SDE's summary says Senate Bill 1362 "continued the majority of FY 2026's revised appropriated dollars into FY 2027" with no change in employee compensation, and a $6,359 per cell addition to the career ladder allocation repeated language from the prior three years.

Context: in August 2025, facing a projected deficit, Gov. Brad Little ordered most state agencies to cut current budgets 3 percent, but the Idaho Capital Sun reported that public schools were exempt from that order. SDE's table still shows the fiscal 2026 general fund revised down by $22,366,500 by the time of the 2026 session. For fiscal 2028, the Capital Sun reported in September 2026 that Superintendent Debbie Critchfield was seeking more than $3.3 billion for K-12, a 3.9 percent increase, with $20 million in new operational funding as her only new request.

Recent laws that changed school finance

Law	What it did	Status
House Bill 292 (2023)	Created the School District Facilities Fund and the Homeowner Property Tax Relief Account. Facilities money is distributed by average daily attendance and must pay bonds and levies before other uses. Eliminated the March school election date. Relaxed circuit breaker criteria.	Vetoed March 27, 2023; veto overridden by the House 58 to 12 and the Senate 28 to 7. Session Law chapter 200.
House Bill 521 (2024)	Dedicated $125 million a year of sales tax to a new School Modernization Facilities Fund for state building authority bonds and district distributions; raised the facilities fund's sales tax share from 2.25 to 3.25 percent and redirected lottery dividends to it; cut income tax rates from 5.8 to 5.695 percent; revised school bond and levy election provisions, including removing the August election date.	Signed March 29, 2024. Session Law chapter 237. One section sunsets June 30, 2034.
House Bill 304 (2025)	Added $50 million a year to the facilities fund and $50 million a year to homeowner relief, starting in 2025, per its statement of purpose.	Enacted 2025.
House Bill 93 (2025)	Created the Idaho parental choice tax credit, Idaho Code 63-3029N.	Signed February 27, 2025. Session Law chapter 9. Amended 2026 (chapter 302).
Senate Bills 1288 and 1447 (2026)	Created the Idaho High-Needs Student Fund (33-1016) and funded it with $5,000,000 for fiscal 2027, reimbursing costs above $30,000 per student up to $100,000.	Enacted 2026.
House Bill 636 (2026)	Let leftover facilities fund money also make extra payments on existing bonds and lease-purchase payments.	Enacted 2026.
House Bill 846 (2026)	Tightened enrollment counting for students absent at the start of the year.	Enacted 2026.
House Bill 831 (2026)	No in-person instruction on election dates unless the clerk and district agree schools will not be polling places.	Effective January 1, 2028.

The facilities funds in brief

Idaho Code 33-911 now says facilities fund money "shall be used in place of property tax levy moneys" in this order: bonds issued before July 1, 2025; payments under the cooperative funding program in 33-909; bonds issued on or after July 1, 2025; temporary supplemental levies (not indefinite ones); plant facilities levies; and then construction, renovation, maintenance, new or extra bond payments, lease-purchase payments or a reserve. The amounts used for bonds and levies must be subtracted from the levy and shown on each tax bill. 33-912 sets up the modernization fund. Lessons 05 through 07 apply these to levies and bonds, and the property tax course works an example in Where the Money Goes.

The sponsors' case for these laws, from the statements of purpose: HB 292 promised "immediate and long term property tax relief," and HB 521 called itself "the largest state investment in school facilities." The case on the other side is also in the record. HB 292 was vetoed before it was overridden. HB 521 passed the Senate 23 to 11, with members of both parties among the no votes. The money comes from sales tax that every buyer pays, and because it is distributed per student, it cuts property tax most where districts had already borrowed most.

The parental choice tax credit

HB 93 created a refundable state income tax credit for "qualified expenses" a parent, legal guardian or state-licensed caregiver with a child placed in the home pays for an eligible student not enrolled in public school: private school tuition and fees, tutoring, tests, textbooks, curriculum and similar costs. Under 63-3029N:

• The credit is up to $5,000 per eligible student per year, or $7,500 for students with certain disabilities.
• Total credits are capped at $50,000,000 per tax year.
• For 2026, applicants at or below 300 percent of the federal poverty level get priority and may take a one-time advance payment. From 2027, prior-year recipients get priority first.
• Parents apply to the Tax Commission. The current statute, as amended in 2026, requires the Tax Commission to reopen the application period if claims in completed applications have not reached the cap, taking new applications until August 15 or until the cap is reached.

The bill passed the House 42 to 28 and the Senate 20 to 15. Its fiscal note put the cost at a maximum of $50 million in reduced general fund revenue. The cost never appears in the public schools appropriation. It reduces the same general fund the Legislature uses to pay for public schools.

The 2026 Supreme Court decision

A group of petitioners went straight to the Idaho Supreme Court asking it to stop the Tax Commission from carrying out the credit. They included the Committee to Protect and Preserve the Idaho Constitution, Mormon Women for Ethical Government, School District No. 281 in Latah County, the Idaho Education Association and several parents and residents. The State, through the Tax Commission, and the Legislature, which intervened, defended the law.

On February 5, 2026, in Committee to Protect and Preserve the Idaho Constitution, Inc. v. State, Docket No. 53264-2025, the court denied the petition. Chief Justice Bevan wrote the opinion. Its main points:

• Standing. The court found the petitioners had not shown traditional standing, but relaxed the standing requirement because of the urgency and importance of the constitutional question and because no other party was likely to bring it. It called that "a close question."
• Article IX, Section 1. The petitioners argued that the duty to maintain "a" system of public schools barred the Legislature from funding a second, private system. The court disagreed: "We hold that the use of the indefinite article 'a' in Article IX, section 1, does not impose a limitation on the legislature's authority to do more than what the provision minimally requires. Rather, it establishes a floor, and not a ceiling." It distinguished Evans v. Andrus (1993), which required a single State Board under Section 2, as a grant of authority to one body rather than a duty.
• What was not argued. The court noted the petitioners "do not argue that the public school system established by the legislature is somehow deficient, or that the tax credit would render it constitutionally deficient."
• Public purpose. Education is a public purpose, and private benefit to schools and vendors is incidental. The court deferred to the Legislature's stated purpose of letting parents choose services for their children.
• Fees. Because a school district was a petitioner and the Tax Commission is a state agency, the court awarded the Tax Commission attorney fees under the statute for cases between government entities.

Supporters of the credit, including the bill's sponsors, describe it as giving parents, especially lower-income parents, more ability to choose. Opponents, including the petitioners, argued it diverts public money to private schools outside state oversight. The decision settles the constitutional question the petitioners raised. It leaves open, by the court's own words, a challenge that claims the public system itself has become deficient, and it leaves the policy debate to the Legislature: "Reasonable minds may differ over the wisdom or effectiveness" of the law, the court wrote, but policy is "primarily the business of the legislature."