Transcript SCHOOL FINANCE

SCHOOL FINANCE
SCHOOL
BUDGET
TASBO School Finance 101 – November 17, 2010
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I. School District
Total Revenue Sources
(state-wide average for 2008-2009 per State
Report Card)
a) State = 48.5%
b) Local = 40.2%
c) Federal = 11.3%
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State Funding
Where does it come from?
Sales Tax
Mixed Drink Tax
Cigarette Tax (beginning July 1, 2007)
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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
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”
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BEP Funding Formula
Highlights
1. Comprehensive (45 components)
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 (45
Total) that the legislature has deemed necessary
for schools to succeed.
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BEP Funding Formula
Equalization
Formula determines actual state share of
education funding by each county’s relative
ability to pay or its
“FISCAL CAPACITY”
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FISCAL CAPACITY
County’s “ability to pay” based on
(pre-BEP 2.0):
 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
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BEP Funding Formula
Flexibility
School boards have broad flexibility
in determining how to allocate
state funds.
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BEP Funding Formula
Cost evaluation
BEP component costs are recalculated
and updated for inflation
each year.
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BEP Funding Formula
Inadequacies
Not enough positions funded to meet
class-size mandates
High cost of educating at-risk students and
English Language Learners (ELL) not
recognized adequately
Capital costs under-funded, especially for
growing systems
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BEP Funding Formula
Inadequacies (continued)
Teacher salaries still not adequately
addressed
School nurse ratio inadequate
Professional development for teachers not
included
Technology not adequately funded
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BEP 2.0 Reforms (2007-08)
Overall Concepts
(phased-in)
 New Fiscal Capacity model (county)
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•
Assessed property values
Sales taxes
 Eliminate Cost Differential Factor (CDF)
• Affects 17 systems
• Not replaced to measure cost-of-living
differences
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BEP 2.0 Reforms
Overall Concepts
(phased-in)
 State returns to 75% share of teacher pay
•
•
Currently 70%
Also increases teacher salaries (in the formula)
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BEP 2.0 Reforms
Structural Changes
 100% funding for at-risk students
 1:20 ELL ratio (phased-in, currently 1:30)
 $40,000 teacher salary unit cost (phased-in,
currently $38,000)
 100% student enrollment growth (current
year enrollment)
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BEP 2.0 Reforms
Accountability
 Ties planning to budgets and spending
 Gives State Department of Education more
authority over High Priority schools
 Requires Principal performance contracts
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BEP 2.0 Reforms
Accountability
 Requires Differentiated pay plan for teachers
(hard to staff schools / hard to fill subject areas)
 More frequent teacher
evaluations/assessments
•
1 formal evaluation every 5 years
•
2 assessments every 5 years
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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
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Local Funding
Where does it come from?
Local Option Sales Tax
Half of revenue must be appropriated to
education
Other sources
(wheel tax, hotel / motel tax, etc.)
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Local Funding
Maintenance of Effort
No local government can reduce
its share of local funding for
schools as a direct result of
increased state funding.
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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.
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II. Budget Process
1. Planning
2. Approach
3. Calendar
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Planning
 Strategic Plan
• District goals &
objectives (TCSPP)
BUDGET TRIANGLE
• Individual schools’ SIP
 Revenue Plan
 Expenditure Plan
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Approach
Two Methods:
SCHOOL
BUDGET
2010-11
Plan the Budget
Figure out how much revenue will be
available and divide it up
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Approach
Two Methods:
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BUDGET
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Budget the Plan
Identify what needs to be done and
how much it will cost to do it
•Comprehensive needs assessment
•“Zero-based” budgeting
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Required Additional
Expenditures
Labor (salaries & benefits) =
85% - 90% of operating budget
•Health insurance
•Pension
•Salary steps
•Required state teacher raise
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Required Additional
Expenditures
Opening New Schools
•Staff
•Utilities
•Materials & Equipment
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Required Additional
Expenditures
Inflation
•Fuel
•Utilities
•Materials & Supplies
•Multi-Year Contracts
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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
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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)
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Statistical Data
 State Report Card
• District
• Individual schools
 State Data
• Expenditure per pupil calculation
• Other data (Annual Statistical Report)
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SCHOOL FINANCE
THANK YOU!
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