There shall be paid to every local operating authority which shall have established a junior college under this article, upon which construction had commenced prior to January 1, 1964, and which is not operated as a unit of the university system under the board of regents an amount which shall be determined on the basis of a budget for each fiscal year, developed pursuant to a formula agreed upon by the local operating authority, the director of the Office of Planning and Budget, and the legislative budget analyst. Budgets prepared pursuant to this authority shall be for expenses incurred by a junior college for educational and general expenditures as set forth in the latest edition of the publication entitled "College and University Business Administration." Such formula shall include financial participation from the local operating authority to include student matriculation fees and funds derived from not less than a one-half nor more than a three-fourths mill tax established by the local operating authority on the ad valorem tax digest of its political subdivision. No state funds shall be appropriated for capital construction. Expenditure under this article shall be audited annually by the Department of Audits and Accounts.