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TASBO School Finance 101 – November 16, 2011 1

SCHOOL FINANCE. SCHOOL BUDGET. TASBO School Finance 101 – November 16, 2011 1. School District Total Revenue Sources (s tate-wide average for 2009-2010 per State Report Card). State = 47.4% Local = 39.0% Federal = 13.6%.

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TASBO School Finance 101 – November 16, 2011 1

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  1. SCHOOL FINANCE SCHOOL BUDGET TASBO School Finance 101 – November 16, 2011 1

  2. School District Total Revenue Sources (state-wide average for 2009-2010 per State Report Card) State =47.4% Local =39.0% Federal =13.6% TASBO School Finance 101 – November 16, 2011 2

  3. State Funding Where does it come from? • Sales Tax • Mixed Drink Tax • Cigarette Tax(beginning July 1, 2007) TASBO School Finance 101 – November 16, 2011 3

  4. 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. TASBO School Finance 101 – November 16, 2011 4

  5. BEP Funding Formula History • Adopted by the Legislature in 1992 as part of the Education Improvement Act (EIA) • Developed in response to Small Schools I lawsuit, where TN Supreme Court ruled State’s previous school funding scheme unconstitutional • “Funding formula, not a spending plan” TASBO School Finance 101 – November 16, 2011 5

  6. BEP Funding Formula Highlights Comprehensive Attempts to equalize state and local funding (fiscal capacity;cost differential factor) Provides flexibility Attempts to keep up with increased costs TASBO School Finance 101 – November 16, 2011 6

  7. BEP Funding Formula Comprehensive Formula contains a number of components (45 Total)that the legislature has deemed necessary for schools to succeed. TASBO School Finance 101 – November 16, 2011 7

  8. BEP Funding Formula Equalization Formula determines actual state share of education funding by each county’s relative ability to pay or its “FISCAL CAPACITY” TASBO School Finance 101 – November 16, 2011 8

  9. FISCAL CAPACITY • County’s “ability to pay” based on • Tax base (sales, property) • Per capita income • Resident tax burden • Students relative to total population • Expressed as an index measure, which is a proportion of the total fiscal capacity for all counties TASBO School Finance 101 – November 16, 2011 9

  10. BEP Funding Formula Flexibility • School boards have broad flexibility in determining how to allocate state funds. TASBO School Finance 101 – November 16, 2011 10

  11. BEP Funding Formula Cost evaluation • BEP component costs are recalculated and updated for inflation each year. TASBO School Finance 101 – November 16, 2011 11

  12. BEP Funding Formula Inadequacies • Not enough positions funded to meet class-size mandates • High cost of educating at-risk students and English Learners (EL) not recognized adequately • Capital costs under-funded, especially for growing systems TASBO School Finance 101 – November 16, 2011 12

  13. BEP Funding Formula Inadequacies • Teacher salaries still not adequately addressed • School nurse ratio inadequate • Professional development for teachers not included • Technology not adequately funded TASBO School Finance 101 – November 16, 2011 13

  14. BEP 2.0 Reforms (2007) Overall Concepts (phased-in) • New Fiscal Capacity model (county) • Assessed property values • Sales taxes • Eliminate Cost Differential Factor (CDF) • Affects 17 systems • Not replaced to measure cost-of-living • differences TASBO School Finance 101 – November 16, 2011 14

  15. BEP 2.0 Reforms Overall Concepts (phased-in) • State returns to 75% share of teacher pay • Currently 70% • Also increases teacher salary amount (used • in the formula) TASBO School Finance 101 – November 16, 2011 15

  16. BEP 2.0 Reforms Structural Changes • “100% funding” for at-risk students • 1:20 EL ratio (phased-in, currently 1:30) • $40,000 teacher salary unit cost (phased-in, currently $38,700) • 100% student enrollment growth (current year enrollment) TASBO School Finance 101 – November 16, 2011 16

  17. Local Funding Where does it come from? • Property Taxes • Assessed property values (Assessor of Property) • Tax rate allocated for Schools • Collection rate • Value of penny on property tax rate TASBO School Finance 101 – November 16, 2011 17

  18. Local Funding Where does it come from? • Local Option Sales Tax • Half of revenue must be appropriated to education • Other sources (wheel tax, etc.) TASBO School Finance 101 – November 16, 2011 18

  19. Local Funding • Maintenance of Effort No local government can reduce its budgeted amount of local funding for schools unless there is a decrease in student enrollment. TASBO School Finance 101 – November 16, 2011 19

  20. Local Funding • Fund Balance Any accumulated fund balance in excess of 3% of budgeted operating expenditures may be budgeted and expended for any purpose, but must be recommended by the Board of Education. TASBO School Finance 101 – November 16, 2011 20

  21. Budget Process Planning Approach Calendar TASBO School Finance 101 – November 16, 2011 21

  22. Planning Strategic Plan Expenditure Plan • Strategic Plan • District goals & objectives (TCSPP) • Individual schools’ SIP • Revenue Plan • Expenditure Plan Revenue Plan BUDGET TRIANGLE TASBO School Finance 101 – November 16, 2011 1 22

  23. Required Additional Expenditures • Labor (salaries & benefits) = 85% of operating budget • Health insurance • Pension • Salary steps • Required state teacher raise TASBO School Finance 101 – November 16, 2011 23

  24. Required Additional Expenditures • Opening New Schools • Staff • Utilities • Materials & Equipment TASBO School Finance 101 – November 16, 2011 24

  25. Required Additional Expenditures • Inflation • Fuel • Utilities • Materials & Supplies • Multi-Year Contracts TASBO School Finance 101 – November 16, 2011 25

  26. Calendar • Develop/review goals, objectives and needs assessment (Jan, Feb) • Develop draft budget, allow public input (March, April) – post on district website • Make any necessary revisions (May) • Vote on revised budget, present to governing body (June, July) • Send final certified copy of budget to State by August 1 2 TASBO School Finance 101 – November 16, 2011 26

  27. Statistical Data • District data (size of operation) • # Employees (certificated / classified) • # Years experience (25 yrs / 30 yrs) • # Buildings (square footage / acreage / number of portables) • # Buses (regular ed / special ed) • # Students (ADM / ADA) 39 TASBO School Finance 101 – November 16, 2011 27

  28. Statistical Data • State Report Card • District • Individual schools • State Data • Expenditure per pupil calculation • Other data (Annual Statistical Report) 40 TASBO School Finance 101 – November 16, 2011 28

  29. SCHOOL FINANCE THANK YOU! TASBO School Finance 101 – November 16, 2011 29

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