(UPDATED, 5:47 p.m. Friday, to reflect revised payment plan for schools.)

Idaho school districts will receive $235.2 million from the state, designed to offset the sticker price of local, voter-approved property taxes.

The payments were in limbo Friday morning, as representatives from several state agencies met to try to figure out how much money the state had available for a payout. The state settled on a bottom line late Friday afternoon, after two days of confusion over the annual payments.

The complicated math exercise centered on a convoluted 2023 property tax relief law — and state payments designed to cover some school bond issues and levies. Districts cannot use these payments for everyday purposes; they are designed solely to offset property taxes.

On Thursday morning, the Idaho Department of Education emailed local school administrators, telling them they could expect $180.8 million from the state’s school district facilities fund.

That figure fell far below initial forecasts. Earlier this year, lawmakers had appropriated $246.4 million for the facilities fund.

Thursday’s email drew a swift response from the Legislative Services Office, which provides professional support to lawmakers. LSO began reviewing the various state accounts that feed into the school district facilities fund, Julie Oberle, the state’s school finance director, said in a Friday morning followup email to school administrators, obtained by Idaho Education News.

Representatives from several state agencies — including the State Tax Commission, the state controller’s office and Gov. Brad Little’s Division of Financial Management — met Friday morning to discuss the issue, Oberle said in the email. “They are working together to finalize the amount that will actually be available.”

By close of business Friday, state officials settled on the $235.2 million figure — down slightly from the Legislature’s initial appropriation, but still a record property tax relief payout to school districts.

The sticking point boiled down to the sales tax, and whether sluggish sales tax collections would cut into the payments to schools.

When lawmakers earmarked $246.4 million for school property tax relief, they were hoping to have $88.1 million in sales taxes to put into the fund, Oberle wrote Thursday. However, she wrote, the state will have only $26.6 million in sales taxes available for this fund. And this, in turn, would account for the reduced payments to schools.

The exact numbers were in flux late Friday. State officials now appear to expect the sales tax transfer to come in well above $26.6 million, but still below the initial $88.1 million forecast. That, in turn, appears to be the driving force behind the new, larger payout to schools.

Sluggish tax collections have become a recurring theme this summer, across state government, as Idaho faces its most serious financial crunch in five years. Tax cashflow is one reason why the state is facing a deficit of at least $79.9 million this year, prompting Gov. Brad Little to impose midyear spending cuts across much of state government.

The single-purpose school property tax relief fund is a byproduct of House Bill 292, passed in 2023. Schools are limited in how they can spend this money.

Schools must first use the money to pay down bond issues for buildings. Schools without a bond can apply payments toward supplemental levies or plant facilities levies that are used for maintenance and repairs. Schools with no bonds or levies can bank their payments for future building projects.

Money is distributed based on student attendance. The West Ada School District, Idaho’s largest district, will now receive $33.4 million, up from Thursday’s projection of nearly $25.7 million. Three Creek, a tiny elementary district near the Idaho-Nevada border, will receive about $4,700. (Click here for the revised district-by-district breakdown, released Friday afternoon.)

It’s not unprecedented for the school property tax relief fund to fall below projections. The same thing happened last year, Gideon Tolman, the Idaho Department of Education’s chief fiscal officer, said in an email Thursday.

A year ago, schools received $140.9 million from the school property tax relief fund, Tolman said.