Legislative Session An Equity Center Presentation for Region 1 - PowerPoint PPT Presentation

Equity Gains Under HB 3, 86 th Legislative Session An Equity Center Presentation for Region 1 Superintendents Summer Retreat June 7, 2019

Equity Gains From HB 3, 86 th Legislative Session √ Basic Allotment increased from $5,140 to $6,160 Funding formulas moved to a Single Chapter, placing all school districts on √ formula funding, regardless of wealth Funding formulas changed to base calculations on Current Year Values, moving an √ additional $3.6 Billion into the Equalized Funding System ASF Per Capita included as first funding for all districts, ensuring all districts, √ regardless of wealth, receive Per Capita funding the same way 6/7/2019 Equity Center 2

Equity Gains From HB 3, 86 th Legislative Session (cont.) Eliminated the High School Allotment, rolling those funds into the Equalized √ Formula System, ensuring all districts are impacted equally Eliminated the Staff Allotment, rolling those funds into the Equalized Formula √ System, ensuring all districts are impacted equally Eliminated the GT Allotment, rolling those funds into the Equalized Formula √ System Moved optional Local Option Homestead Exemption funding to Chapter 48 for √ all districts, making sure that all districts with a LOHE, if funding is available, receive it in the same way, regardless of district wealth 6/7/2019 Equity Center 3

Equity Gains From HB 3, 86 th Legislative Session (cont.) Eliminated the 4% Bonus in funding recapture districts received for simply √ signing a Letter of Agreement to Purchase Attendance Credits by September 1 each year Put the 1993 Wealth Hold ‐ Harmless (26 years old) on a 5 ‐ year Phase Out to √ elimination √ Eliminated the 2017 Hardship Grant √ Disaster Relief placed in Chapter 48 so that it impacts all districts uniformly Eliminates the Equalized Wealth Level and puts all districts in the same Formula √ Funding System 6/7/2019 Equity Center 4

Equity Gains From HB 3, 86 th Legislative Session (cont.) Changes “Recapture” to Local Revenue in Excess of Entitlement and greatly √ simplifies the calculation, increasing equity Increases the Yield on Copper Pennies to nearly $50 per WADA per penny, and √ ties the Yield to 80% of the Basic Allotment, so the Yield Increases as the BA Increases Requires all districts to adopt tax rates equal to their New Compressed Rates in √ order to earn Full Entitlement in Tier 1 Forces all districts to tax at full New Compressed Rates before they can access √ any Tier 2 Golden or Copper Pennies 6/7/2019 Equity Center 5

Current Law/HB 3 Average M&O Tax Rates FY 20 $1.13 $1.04 $1.04 $0.98 CL ATR HB 3 ATR Wealthiest 5% Poorest 5% 6/7/2019 Equity Center 6

Current Law/HB 3 Average M&O Tax Rates FY 20 $1.14 $1.06 $1.04 $0.99 CL ATR HB 3 ATR Wealthiest 15% Poorest 15% 6/7/2019 Equity Center 7

Current Law/HB 3 Average FY 20 Revenue/WADA (HB 3 WADA) 7,976 8,000 7,788 7,500 7,067 7,000 6,500 6,254 6,000 5,500 CL Rev/WADA HB 3 Rev/WADA Wealthiest 5% Poorest 5% 6/7/2019 Equity Center 8

Current Law/HB 3 Average FY 20 Revenue/WADA (HB 3 WADA) 8,000 7,488 7,500 7,148 7,067 7,000 6,500 6,258 6,000 5,500 CL Rev/WADA HB 3 Rev/WADA Wealthiest 10% Poorest 10% 6/7/2019 Equity Center 9

Current Law/HB 3 Average FY 20 Revenue/WADA (HB 3 WADA) 8,000 7,500 7,271 7,061 7,000 6,897 6,500 6,259 6,000 5,500 CL Rev/WADA HB 3 Rev/WADA Wealthiest 15% Poorest 15% 6/7/2019 Equity Center 10

CURRENT LAW FY 20 PROJECTED REVENUE/WADA BY ADOPTED TAX RATE $11,500 $11,000 $10,500 $10,000 $9,500 $9,000 $8,500 $8,000 $7,500 $7,000 $6,500 $6,000 $5,500 $5,000 $4,500 $0.65 $0.75 $0.85 $0.95 $1.05 $1.15 $1.25 6/7/2019 Equity Center 11

HB 3 FY 20 PROJECTED REVENUE/WADA BY COMPRESSED TAX RATES $11,500 $11,000 $10,500 $10,000 $9,500 $9,000 $8,500 $8,000 $7,500 $7,000 $6,500 $6,000 $5,500 $5,000 $4,500 $0.65 $0.75 $0.85 $0.95 $1.05 $1.15 $1.25 6/7/2019 Equity Center 12

FY 18 Near Final ‐‐ Average Revenue per WADA & Wealth per WADA per M&O Tax Effort $950,000 $6,900 $946,817 $6,844 $875,000 $6,800 $720,656 $800,000 $6,700 $749,106 $725,000 $6,600 $6,515 $6,510 $6,474 $650,000 $6,500 $6,401 $575,000 $6,400 $500,000 $6,300 $6,198 $425,000 $6,200 $406,633 $350,000 $6,100 $282,859 $275,000 $6,000 $225,882 $200,000 $5,900 <1.00 >1.00<1.04 1.04 >1.04<=1.06 >1.06<1.17 >=1.17 av rev per wada av wealth per wada 6/7/2019 Equity Center 13

HB 3: Correcting the Equity Trends for FY 20 $7,500 $7,375 $7,254 $7,250 $7,188 $7,170 $7,125 $7,023 Revenue per WADA $7,000 $6,944 $6,875 $6,743 $6,750 $6,653 $6,625 $6,500 $6,358 $6,375 $6,328 $6,324 $6,250 <1.00 >1.00<1.04 1.04 >1.04<=1.06 >1.06<1.17 >=1.17 FY 20 CL Rev/WADA FY 20 HB 3 Rev/WADA Linear (FY 20 CL Rev/WADA) Linear (FY 20 HB 3 Rev/WADA) 6/7/2019 Equity Center 14

HB 3 Equity Trends FY 20 Region 1 $7,850 $7,650 $7,450 Revenue per WADA $7,250 $7,050 $6,850 $6,650 $6,450 $6,250 <1.00 >1.00<1.04 1.04 >1.04<=1.06 >1.06<1.17 >=1.17 FY 20 CL Rev/WADA FY 20 HB 3 Rev/WADA Poly. (FY 20 CL Rev/WADA) Linear (FY 20 HB 3 Rev/WADA) 6/7/2019 Equity Center 15

Comparative Equity Between Current Law & HB 3 FY 20 $7,500 500 496 437 $7,375 450 426 $7,254 $7,250 400 $7,188 $7,170 387 $7,125 350 Revenue per HB 3 WADA $7,023 Number of Districts $7,000 300 $6,944 $6,875 250 $6,743 $6,750 200 $6,653 $6,625 150 $6,500 100 95 78 $6,358 57 $6,375 $6,328 50 $6,324 27 17 14 $6,250 0 0 0 <1.00 >1.00<1.04 1.04 >1.04<=1.06 >1.06<1.17 >=1.17 FY 20 CL Rev/WADA FY 20 HB 3 Rev/WADA FY 19 CL # Districts FY 20 HB 3 # Districts 6/7/2019 Equity Center 16

Comparative Equity Between Current Law & HB 3 FY 20 $7,850 27 24 $7,650 21 $7,450 Revenue per HB 3 WADA 18 Number of Districets $7,250 15 $7,050 12 $6,850 9 $6,650 6 $6,450 3 $6,250 0 <1.00 >1.00<1.04 1.04 >1.04<=1.06 >1.06<1.17 >=1.17 FY 20 CL Rev/WADA FY 20 HB 3 Rev/WADA FY 19 CL # Districts FY 20 HB 3 # Districts 6/7/2019 Equity Center 17

HB 3 Major Tax Rate Categories After Compression FY 20 $8,000 $1,600,000 $1,503,199 $1,482,288 $7,419 $7,000 $1,400,000 $7,231 $7,542 $6,719 $6,000 $1,200,000 Revenue per HB 3 WADA Wealth per HB 3 WADA $5,000 $1,000,000 $4,000 $800,000 $555,329 $3,000 $600,000 $2,000 $400,000 $272,125 $1,000 $200,000 517 483 9 8 $0 $0 <0.93 >=0.93<0.97 >=0.97<1.01 >=1.01 FY 20 HB 3 Projected Rev/WADA Number of Districts FY 20 Projected Wealth/WADA 6/7/2019 Equity Center 18

HB 3 Major Tax Rate Categories After Compression FY 20 Region 1 $8,000 $500,000 $468,630 $450,000 $7,000 7,185 6,917 $400,000 $6,000 HB 3 Revenue per WADA $350,000 HB 3 Wealth per WADA $5,000 $300,000 $4,000 $250,000 $200,000 $3,000 $150,000 $123,522 $2,000 $100,000 $1,000 $50,000 7 29 ‐ ‐ ‐ ‐ $0 $0 <0.93 >=0.93<0.97 >=0.97<1.01 >=1.01 FY 20 HB 3 Projected Rev/WADA FY 20 HB 3 Projected Tax Rates FY 20 Projected Wealth/WADA 6/7/2019 Equity Center 19

Future Equity Concerns • Tier 2 Golden Penny Yields • Future District x District Tax Compression • Need to Move to Current Year Collections to Guarantee “all” districts receive full Tier 1 Entitlements • Make sure 5 year long “Transitions” don’t become permanent Hold ‐ harmlesses • Involvement in new “CEI” study • Eliminate last minute Exceptions for certain Districts • Work to Equalize I&S funding 6/7/2019 Equity Center 20

Determ rmin inin ing St State/Lo Local Fundi Funding ng fo for M&O M&O The State provides whatever is lacking after applying the Available School Fund Per Capita payment and the M&O tax collections (both current and delinquent) for the school State Funding year. District Funding Local M&O taxes collected during the school Amount Local Tax year constitute a district’s local share. Collections for the School Year The first payment to fund a district’s M&O funding amount comes from its Available ASF Per Capita School Fund Per Capita distribution. 6/7/2019 Equity Center 24

Determ rmin inin ing M&O M&O “Ex “Excess” s” fo for Property operty We Wealthy Di Districts cts Excess to Earned M&O Allotments Local M&O taxes collected during the school year constitute a district’s local share. In Local Tax some very wealthy districts, ASF Per Capita District Collections for plus collections will exceed the district the School Year Funding funding amount. Amount The first payment to fund a district’s M&O funding amount comes from its Available ASF Per Capita School Fund Per Capita distribution. 6/7/2019 Equity Center 22

The Plan is based on these basic elements • All districts are funded alike • All school funding elements are in Chapter 42 • No funding elements in Chapter 41 • There are NO Chapter 41 and 42 districts • One Basic Allotment for everyone – AND it applies to all pennies of tax rate from $0.01 through $1.17 • There is only one tier, with all 117 pennies funded at the same level • No Guaranteed Levels • No Equalized Wealth Levels • No Tier 2, Golden or Copper Pennies 6/7/2019 Equity Center 23