The bill contains a contingency cushion for districts that depend on state subsidies to fund 30% or more of their base year operating costs. The cushion holds these needier units to a 5% loss if their combined losses in operating and program costs, incurred for any reason, exceed 5% from one fiscal year to the next. The cushion protects against sudden changes in either or both of the 2 major variables that impact the formula: valuation and pupil count.

The cushion is funded by reducing excess subsidies that would otherwise go to those units whose gains exceed a maximum percentage annually calculated by the Commissioner of Education at the rate necessary to pay the cushion subsidies.