Compensatory Revenue Task Force 7/28/2026 Meeting Update

Courtesy of Scott Croonquist, Association for Metropolitan School Districts

The Compensatory Revenue Task Force met on Tuesday to review, discuss, and refine recommendations from the various subgroups. Last month the committee reached consensus on which data elements should be used to generate compensatory revenue — direct certification, the application for educational benefits form, and SUN Bucks applications. The committee also supports exploring the use of income tax data as a data element in the long-run. 

On Tuesday the committee discussed several other topics:

• District or site level. Agreement was reached to require 70 percent of compensatory funds to be directed to the site level in the short term. Longer term, the task force discussed creating a set of conditions for a school district to be able to have maximum flexibility with where the dollars are spent with the expectation that those schools would be required to submit a report documenting and justifying dollars spent. The committee discussed whether the additional flexibility should be based on district size and whether MDE should be required to issue an annual report. 

• Concentration factor. The committee considered several options including: 

  • Keep the current concentration formula with students eligible for reduced price lunch weighted the same as students eligible for free lunch and the application for educational benefits form restored. 

  • Return the concentration factor to .8 with students eligible for reduced price lunch weighted the same as students eligible for free lunch and the application for educational benefits form restored. 

  • Change the cap and/or concentration factor to a different number with students eligible for reduced price lunch weighted the same as students eligible for free lunch and the application for educational benefits form restored. 

  • Add a minimum revenue floor. The task force members voted, but not unanimously, to return the concentration factor to .8 with students eligible for reduced price lunch weighted the same as students eligible for free lunch and the application for educational benefits form restored. 

• Extended Time Revenue. Members agreed that they will not recommend any changes to extended time revenue.

• Uses of Compensatory Revenue. Members agreed that they will not recommend changes to the current allowable uses. They also discussed the idea of refining the UFARS codes to identify best practices and adding a requirement to include a short narrative on the uses of compensatory revenue to the Comprehensive Achievement and Civic Readiness report.

• Effectiveness. Task force members discussed the challenges of evaluating the effectiveness of Compensatory funds and that it is unrealistic to isolate the impact of one funding stream in the larger context of insufficient overall funding to schools. It was noted that the Office of Legislative Auditor’s 2020 report acknowledged that measuring effectiveness is unrealistic. Task force members agree that a better approach would be to establish an ongoing study of compensatory revenue to identify successful uses and share the information. 

The Task Force will meet again in September at a date yet to be determined. The report to the Legislature will be submitted Oct. 15.