SCHOOL FINANCE SCHOOL BUDGET I. School District Total Revenue - - PowerPoint PPT Presentation

SCHOOL BUDGET

SCHOOL FINANCE

• I. School District

Total Revenue Sources

(State Report Card)

State Average Your District State 49.2% ?? % Local 39.4% ?? % Federal 11.4% ?? %

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State Funding

Where does it come from? ØSales Tax ØMixed Drink Tax ØCigarette Tax – BEP 2.0

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State Funding

How is it determined?

Basic Education Program (BEP)

Formula that determines the funding level required for each school system to provide a common, basic level of service for all students.

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BEP Funding Formula

History

ØAdopted by the Legislature in 1992 as part

• f the Education Improvement Act (EIA)

ØDeveloped in response to Small Schools I lawsuit, where TN Supreme Court ruled State’s previous school funding formula was inequitable Ø“Funding formula, not a spending plan”

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BEP Funding Formula

Highlights

• 1. Comprehensive
• 2. Attempts to equalize state and local

funding (fiscal capacity; cost differential factor)

• 3. Provides flexibility
• 4. Attempts to keep up with increased costs

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BEP Funding Formula

Comprehensive

Formula contains a number of components (46 total) that the Legislature has deemed necessary for schools to succeed.

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Determining Need - ADMs

Ø ADMs (student enrollment) drive the formula – funded on prior year’s ADMs

• Note: LEAs also receive growth funding based on current

year growth. This is outside the BEP, but distributed based on the BEP formula

Ø ADMs generate:

• Positions – teachers, supervisors, assistants
• Funding – ADMs are multiplied by a Unit Cost for supplies,

equipment, textbooks, travel, capital outlay, etc.

Ø Funding months and weighting

• Month 2 – 12.5%

Month 6 – 35%

• Month 3 – 17.5%

Month 7 – 35%

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BEP Funding Formula

4 Categories

Formula contains instructional salaries, instructional benefits, classroom and non-classroom components: ØInstructional Components (State = 70% / Local = 30%)

• Example: Teaching Positions

ØClassroom Components (State = 75% / Local = 25%)

• Example: Textbooks, Instructional Equipment

ØNon-Classroom Components (State = 50% / Local = 50%)

• Example: Capital Outlay, Transportation

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BEP Funding Formula

Equalization

Formula determines actual state share of education funding by each county’s relative ability to fund education from its own local sources:

“FISCAL CAPACITY”

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Fiscal Capacity

ØCounty’s “ability to pay”

• Fiscal Capacity Indices provided by:
• Tennessee Advisory Commission on

Intergovernmental Relations (TACIR)

• UT Center for Business and Economic

Research (CBER)

ØExpressed as an index measure, which is a proportion of the total fiscal capacity for all counties

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Fiscal Capacity

TACIR Model (complex multiple-regression model)

Ø Per pupil own-source revenue Ø Per pupil equalized property assessment Ø Per pupil taxable sales Ø Per capita income Ø Tax Burden Ø Service Burden

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Fiscal Capacity

CBER Model (newer model per BEP 2.0)

Ø Determines a county’s capacity to raise local revenues for education from its property and sales tax base Ø Each county’s fiscal capacity is the sum of:

• The County’s equalized assessed property plus IDBs

multiplied by a statewide average property tax rate for education

• The County’s sales tax base multiplied by a statewide

sales tax rate for education

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Cost Differential Factor (CDF)

Ø Used to adjust BEP funding in systems where the cost of living in the county is greater than the statewide average Ø Compares county wages in non-government industries to statewide wages Ø Counties with above-average wages according to this index receive an increase Ø Increase is applied to salaries, retirement contributions and FICA contributions Ø Eliminated in BEP 2.0 Ø Counties receiving an adjustment currently receive 25% of the calculated CDF

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BEP Funding Formula

Flexibility

ØSchool boards have broad flexibility in determining how to allocate state funds.

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BEP Funding Formula

Cost evaluation

ØBEP component costs are recalculated and updated for inflation each year.

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BEP

Unit Costs

ADMs

CDF Fiscal Capacity Salaries, Retirement, Insurance

BEP – many inputs

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Instructional Classroom Non-Classroom

Regular Education Career & Technical Education Special Education Elementary Guidance Secondary Guidance Elementary Art Elementary Music Elementary Physical Education Elementary Librarians (K-8) Secondary Librarians (9-12) ELL Instructors ELL Translators Principals Assistant Principals Elementary Assistant Principals Secondary System-wide Instructional Supervisors Special Education Supervisors Career and Technical Education Supervisors Special Education Assessment Social Workers Psychologists RTII Staff Benefits, Insurance, Retirement K-12 At-risk Duty-free Lunch Textbooks Classroom Materials and Supplies Instructional Equipment Classroom Related Travel CTE Center Transportation Technology Nurses Instructional Assistants Special Education Assistants Staff Benefits, Insurance, Retirement Substitute Teachers Alternative schools Superintendent System Secretarial Support Technology Coordinators School Secretaries Maintenance and Operations Non-instructional Equipment Pupil Transportation Staff Benefits, Insurance, Retirement Capital Outlay

BEP Components (46) by Category

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For further information…

Ø Tennessee Basic Education Program: An Analysis

§ https://www.comptroller.tn.gov/office-functions/research-and- education-accountability/legislative-toolkit/bep.html See the Legislative Brief

Ø State Board of Education

§ https://www.tn.gov/sbe/committees-and-initiatives/the-basic- education-program.html

§ BEP Blue Book – up to date data on BEP components § Recommendations of the BEP Review Committee § BEP Handbook for Computation– comprehensive guide

• n calculations

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SCHOOL FINANCE

THANK YOU!