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Understanding your State Aid Notice

Understanding your State Aid Notice. Kelly Hayes Springdale Public Schools October 26, 2011. Handouts. Your state aid notice Springdale’s state aid notice. Millage as it relates to the State Aid Notice. The State Aid Notice is based solely on the Uniform Rate of Tax (URT).

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Understanding your State Aid Notice

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  1. Understanding yourState Aid Notice Kelly Hayes Springdale Public Schools October 26, 2011

  2. Handouts • Your state aid notice • Springdale’s state aid notice

  3. Millage as it relates to the State Aid Notice • The State Aid Notice is based solely on the Uniform Rate of Tax (URT). • What is the URT? 25 maintenance and operation mills. • So, if your district has more M&O mills, Dedicated M&O mills, Capital Outlay mills, Debt Service mills---congratulations! • (But with regard to the State Aid Notice—none of that matters)

  4. State Aid Notice • Unless otherwise noted, the State Aid Notice used for this presentation was the Preliminary 2011-12 notice dated July 29, 2011.

  5. Lines 1-4: Local Assessment • Lines 1 through 4 are simply the assessed value of the property within the school district’s boundary. • This information can be obtained from the county assessor. • Note that this information is always behind—i.e. the assessment for the 2010-11 printouts is the 2010 assessment.

  6. Extra info about assessment • Question: How many dollars does your district generate per mill? • Answer: Look at your total assessment (Line 4). Put your finger over the last three numbers. The amount remaining is the dollars your district generates per mill if you were to collect 100% of your abstract. • Example: Springdale’s 2010 total assessment is $1,415,539,243. Ignore the 2, the 4, and the 3—Springdale generates $1,415,539 per mill.

  7. Line 5: 98% of URT X Assessment • Just what it says… • Take your total assessment (Line 4) and multiply it by 98% and the URT (.0025 or 25 mills). • Springdale’s calculation: 1,415,539,243 X 98% X .0025 = 34,680,711 • Calculate your district’s line 5.

  8. Line 6: Net Revenues • At the end of the calendar year, the county collector will send the state (and hopefully you) a report which shows all of the tax collections for the year. • Compare this report to your receipts for the calendar year. • When you are satisfied that it is reasonably close…you will need to prorate your receipts down to 98% of the 25 URT mills.

  9. Line 6: Net Revenues (cont) • Calculation: Total calendar year tax receipts divided by the total number of mills in your district multiplied by 25 (the URT mills) and 98%. • Example: School A collected $20 million in tax receipts during the 2010 calendar year. They have a total of 35 mills. Divide the $20 million by 35 and multiply by 25 and 98%. • $20 Million / 35 X 25 X 98% = $14 million

  10. Line 6: Net Revenues (cont) • The resulting number is then compared to Line 5. • If Line 6 is lower than Line 5, then the state sends you a check for the difference. Why? Because you didn’t receive all of your 98% guaranteed money. • If Line 6 is higher than Line 5, then you have to send the state a check for the difference. Why? Because you collected more than your 98% guaranteed money.

  11. Line 7: Five Year Avg Misc Funds • Miscellaneous funds include the following: Federal forest reserves, Impact Aid, Revenue in Lieu of Taxes…etc. (See §A.C.A. 6-20-2303) • This amount is your miscellaneous funds average for the last five years prorated down to URT mills. If you collected $100,000 in miscellaneous funds, then the calculation would be: $100,000 / 35 mills X 25 mills = $71,429. NOTE: This calculation is based on FISCAL year NOT calendar year.

  12. Lines: 8-13 • These lines refer to your Average Daily Membership. (See § A.C.A. 6-20-2303) • Line 8 comes from Cycles 3,5,& 6 of the second year prior to the current year. • Line 9 is from the previous year (cycles 3,5 & 6). This number is used to calculate Per Student Revenue (Line 14) for the current fiscal year. • Lines 10-13 are self explanatory.

  13. Line 14: Per Student Revenue • Formula: The sum of 98% of URT and Five-Year Avg Misc Funds divided by prior year 3 qtr avg ADM. Step 1: Add together Lines 5 and 7. Step 2: Divide the sum of Step 1 by the amount on Line 9.

  14. Line 14: Per Student Revenue (cont) • Springdale’s calculation: • Step 1: $34,680,711 (Line 5) + $14,119 (Line 7) = $34,694,830. • Step 2: Divide the total in step 1 ($34,694,830) by 18,716.83 (Line 9) = $1,853.67 (Line 14) • Springdale’s Per Student Revenue for 2011-12 is $1,853.67. • Calculate your district’s Per Student Revenue.

  15. Line 15: Per Student Foundation Funding Amount • Amount set by State legislature • 2010-11 $6,023 per ADM • 2011-12 $6,144 per ADM • 2012-13 $6,267 per ADM

  16. Line 16: Per Student State Foundation Funding Aid • Line 16 calculation: Line 15 minus Line 14. • Springdale’s Calculation: Line 15 $6,144.00 Minus Line 14 -$1,853.67 Equals Line 16 $4,290.33

  17. Line 17: PY ALE FTEs • This is the average of the four quarters FTE for the previous fiscal year. (Cycles 3,5,6,&7)

  18. Line 18: CY ELL Students • Current year English Language Learner Students (not proficient in English language) as of November 1st of the current fiscal year. • NOTE: This is the only categorical funding that is based on CURRENT year rather than PRIOR year ADM.

  19. Line 19: NSLA Students • National school lunch students (low socioeconomic as identified by eligibility for free or reduced-price meals) as of October 1st. • Must match Food Service free and reduced count! • Prior year number reported in Cycle 2.

  20. Line 20: Professional Development Funding Rate • Amount up to $51 per prior year ADM. • In 2011-12, amount per ADM is $42.38.

  21. Line 21: Adjusted 1/1/05 Scheduled Debt Payment • Used to calculate Bonded Debt Assistance • Based on Debt Payment schedule in place as of 1/1/2005. • To see your district’s payment schedule as of 1/1/2005, go to the ADE website. Choose School Finance Reports. At the bottom under Other Reports, you will see Bonded Debt Principal and Interest Payment Schedule 2005 to 2039.

  22. Line 21: Adjusted 1/1/05 Scheduled Debt Payment (cont) • Back in 2005, districts were told that 90% of their existing debt P&I payments would be eligible for Bonded Debt Assistance. To be eligible for the remaining 10%, districts had to prove that all bond proceeds related to the debt had been spent on academic (non-athletic) facilities. • Therefore, today Bonded Debt Assistance is calculated based on anywhere from 90% to 100% of the debt payment schedule which existed as of 1/1/2005.

  23. Line 21: Adjusted 1/1/05 Scheduled Debt Payment (cont) • Example: Per the debt payment schedule on the ADE’s website, Springdale’s annual P&I payment for 2012 (as of 1/1/05) was to be $7,714,998. • Springdale was able to prove that 93.67% of its bond proceeds qualified for Bonded Debt Assistance. • Therefore, the number listed for Springdale on Line 21 is $7,226,638.18 ($7,714,998 X 93.67%)

  24. Line 22: Bonded Debt Assistance Funding Factor • Set by legislature—currently at $18.03 per ADM

  25. Line 23: State Wealth Index • Formula as follows: Take Line 14 (per student revenue) and divide it by Line 16 (Per student state foundation funding aid). Subtract this number from 1.00. The result is your State Wealth Index. • Example: Springdale’s Line 14 (1,853.67) divided by Line 16 (4,290.33) equals 0.43206. • 1.00 minus 0.43206 equals 0.56794. • Calculate your district’s State Wealth Index.

  26. Lines 24 & 25: Isolated ADM & Funding • You know who you are! • Law is § 6-20-601, 6-20-602, & 6-20-603

  27. Line 26: State Foundation Funding Aid • Formula: Line 9 multiplied by Line 16. • Springdale’s example: Line 9 (18,716.83) multiplied by Line 16 ($4,290.33) equals $80,301,373.

  28. Line 27: Educational Excellence Trust Funds • This number is computed as a percentage of Line 26. For the 2011-12 school year, this percentage is 10.228%. • This % varies from year to year. (In 2010-11, it was 9.909%.) • Since trust funds are calculated based on State Foundation Funding Aid, some districts have little or no trust fund requirement—because they receive little or no State Foundation Funding Aid.

  29. Line 27: Educational Excellence Trust Funds (cont) • Districts with an annual increase in Trust Funds which exceeds the highest level of Trust funds in any year since 1991 must distribute the increase equally to all staff members. • Experience steps and education increments no longer count toward meeting the Trust fund requirement. • So, districts with an increase in Trust Funds must add to the base of the certified salary schedule.

  30. Line 27: Educational Excellence Trust Funds (cont) • Under what scenarios could your trust fund amount increase? • If the State increases the % of foundation aid that is considered to be trust funds • Decrease in local assessments • Increase in number of students is greater than the increase in assessments

  31. Line 28: Alternative Learning Environment • Formula: 2011-2012: Line 17 multiplied by $4,145. 2012-2013: Amount per FTE goes to $4,228.

  32. Line 29: English Language Learners • Formula: 2011-2012: Line 18 multiplied by $299. • Reminder: This is the only Categorical funding that is based on CURRENT year numbers. 2012-2013: Amount per student goes to $305.

  33. Line 30: National School Lunch Act • Formula: Line 19 multiplied by one of the following: Percentage of NSLA students: 2011-122012-13 More than 90%: $1,518 $1,549 70% to 90%: $1,012 $1,033 Less than 70%: $ 506 $ 517

  34. Line 31: NSLA Transitional Funding • Basically, if/when a district goes between tiers of NSLA funding, there is a three year phase in or phase out period. • Example: When moving from the tier of “Less than 70%” to the tier of “More than 70% but less than 90%”, the funding per FTE doubles. However, a district will only receive one-third of the additional funds the first year, two-thirds the second year, and all of the additional funds beginning in the third year.

  35. Line 32: NSLA Growth Funding • Based on growth pattern for previous three years. • Theory: If your district exceeds state growth, then you receive your average three years growth % multiplied by the amount of NSLA funds that you are entitled to receive in the current year.

  36. Line 33: Professional Development • PY Three Qtr ADM (Line 9) multiplied by Amount on Line 20. • Calculate your district’s professional development funds.

  37. Line 34: Bonded Debt Assistance • Formula: Step One: Convert your 1/1/05 scheduled debt payment to mills. Example: Springdale’s scheduled debt payment on Line 21 ($7,226,638.18) divided by total assessment on Line 4 ($1,415,539,243) multiplied by 1,000 equals 5.10521924 mills. In other words, based on the 2010 total assessment, it would take 5.10521924 mills to pay Springdale’s 1/1/05 Debt Payment.

  38. Line 34: Bonded Debt Assistance (cont) • Formula Step 2: Take the answer in Step One and multiply it by the PY ADM 3 Qtr Avg (Line 9) and by the Bonded Debt Assistance Funding Factor (Line 22) and by the State Wealth Index (Line 23). This will equal your Bonded Debt Assistance.

  39. Line 34: Bonded Debt Assistance (cont) • Example: The number of mills that it would take Springdale to pay its 1/1/05 debt is 5.10521924. Multiply this by PY ADM (18,716.83-Line 9) and by Funding Factor (18.03-Line 22) and by State Wealth Index (.56794-Line 23). The result is Bonded Debt Assistance. Calculation: 5.10521924 X 18,716.83 X $18.03 X .56794 = $978,468 (Bonded Debt Assistance Line 34)

  40. Line 35 & 36: General Facilities & Supplemental Millage • Amounts were frozen in 2005-2006. • Funding is being phased out at the rate of 10% per year. • Example: Springdale’s amount for General Facilities in 2005-2006 was $251,672. Our amount is being reduced by $25,167 per year. • The funds completely go away in 2015-16.

  41. Line 37: Isolated Funding • You know who you are! • Law is § 6-20-601, 6-20-602, & 6-20-603

  42. Lines 38-40: Special Needs Funding • You know who you are! • Law is § 6-20-604

  43. Line 42: Declining Enrollment • Equal to the difference between the average of the two immediately preceding years’ ADM and the ADM for the previous school year multiplied by the Per Student Foundation Funding Amount.

  44. Line 42: Declining Enrollment (cont) • Calculation: I’ll use Pine Bluff as an example. • 2009-10 3 quarter ADM = 4,809.57 • 2010-11 3 quarter ADM = 4,734.39 The average of these two amounts is 4,771.98 Subtract 2010-11 3 qtr ADM -4,734.39 The difference is 37.59 Multiplied by X 6,144 Equals Declining Balance $ 230,953

  45. Lines 41 & 43: Adequacy lines • No district received funds under either of these two categories in 2010-11. • ???

  46. Line 44: Student Growth • NOTE: The calculation for Line 44 (only) is based on the Final printout for the 2010-11 school year. • Formula: Step 1: Add together each Qtr ADM number for the year. • Step 2: Divide the resulting total by four to get an average of the four quarters. • Step 3: Subtract the three quarter average from the previous fiscal year from this number. Multiply the result by the Per Student Foundation Funding Amount.

  47. Line 44: Student Growth Example • Step 1: Springdale’s four quarter averages for 2010-11 were as follows: Qtr 1: 18,771.27 Qtr 2: 18,734.32 Qtr 3: 18,658.61 Qtr 4: 18,567.95 Total 74,732.15 Step 2: 74,732.15 divided by 4 = 18,683.0375

  48. Line 44: Student Growth Example (cont) • Step 3: 4 qtr average 18,683.0375 Minus: Prior yr 3 qtr avg -18,087.8700 Equals 595.1675 Multiplied by Per Student Foundation Funding Amt X $6023 = Student Growth Funding $3,584,694

  49. Line 45: 98% of URT X Assessment less Net Revenues • Line 5 minus Line 6 • This is the difference between the calculated 98% (line 5) and what the county collected (line 6). • If it is a negative—the district owes the state • If it is a positive—the state owes the district

  50. Questions? Comments? • Email: kelly.hayes@sdale.org

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