Before statehood public education needs were priority- Note: State of Franklin- Education important with sums paid by the public.

Transcription

1

2

3 Before statehood public education needs were priority- Note: State of Franklin- Education important with sums paid by the public Congress specified that title for school lands be vested in the state itself Tennessee s first constitution- silent on education 1806 First mention of state support for public school 1815 First tax levied for education of orphans 1829 Appropriate state funds to operate public schools 1838 First school census- 185, 342 children between 6-16 on which $103, state funds were expended

4 1847 Governor Neil Brown- If anything can justify taxation, it is the education of the children of the state State Constitution- Section 12 Article x1- Poll taxes appropriated to education 1873 School Law of st real effort to make public schools financed by the state a reality % of children attend school 1907 Legislative Act to create County Boards of Education 1913 Compulsory Attendance Law

5 1925 State Salary Schedule for Teachers 1933 Severe education cuts- Average 25% 1946/47 2% Sales Tax by Governor McCord passed

6 State Board of Education began working with various groups to reform education funding TFP appropriations were around $900 million Consensus on the weaknesses in the TFP No inflation adjustment Inflexible funding targeted formula Inadequate Insignificant amount of funding for consideration of local ability to pay

7 Development of the Basic Education Program Formula Funding mechanism featuring components that are necessary for funding a basic education program No targeted funding Flexible funding: A funding formula, not a spending plan. Funding distribution considering local ability to pay at a much more significant level State loses small school systems lawsuit which resulted in a court-mandated requirement to distribute state funding more equitably Education Improvement Act passes encompassing all these features

8 Two distinct and separate parts: Formula that generates the total dollars Local Ability to Pay (Fiscal Capacity) TN Department of Education generates the total dollars Tennessee Advisory Commission on Intergovernmental Relations (TACIR) & UT Center for Business and Economic Research (CBER) determine local ability to pay

9 Local funding requirements Current funding issues

10 Two more successful legal challenges by small schools resulting in funding improvements Various changes in funding components Changes in local share percentages BEP 2.0 brought on changes in local ability to pay and the largest improvement in state funding but only half implemented Still waiting for full implementation

11

12 SCHOOL FINANCE SCHOOL BUDGET TSBA School Finance Academy October 2014

13 I. School District Total Revenue Sources ( per State Report Card) State Average Your District State 48.7%?? % Local 40.1%?? % Federal 11.3%?? % TSBA School Finance Academy October

14 State Funding Where does it come from? Sales Tax Mixed Drink Tax Cigarette Tax (beginning July 1, 2007) TSBA School Finance Academy October

15 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. TSBA School Finance Academy October

16 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 formula was inequitable Funding formula, not a spending plan TSBA School Finance Academy October

17 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 TSBA School Finance Academy October

18 BEP Funding Formula Comprehensive Formula contains a number of components (45 total) that the Legislature has deemed necessary for schools to succeed. TSBA School Finance Academy October

19 Determining Need - ADMs 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 ADMs generate: Positions teachers, supervisors, assistants Funding ADMs are multiplied by a Unit Cost for supplies, equipment, textbooks, travel, capital outlay, etc. Funding months and weighting Month % Month 6 35% Month % Month 7 35% TSBA School Finance Academy October

20 BEP Funding Formula 3 Categories Formula contains instructional, classroom and non-classroom components: Instructional Components (State = 70% / Local = 30%) Example: Teaching Positions Classroom Components (State = 75% / Local = 25%) Example: Textbooks, Instructional Equipment Non-Classroom Components (State = 50% / Local = 50%) Example: Capital Outlay, Transportation TSBA School Finance Academy October

21 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 TSBA School Finance Academy October

22 Fiscal Capacity County s ability to pay Fiscal Capacity Indices provided by: o Tennessee Advisory Commission on Intergovernmental Relations (TACIR) o UT Center for Business and Economic Research (CBER) Expressed as an index measure, which is a proportion of the total fiscal capacity for all counties TSBA School Finance Academy October

23 Fiscal Capacity TACIR Model (complex multiple-regression model) Per pupil own-source revenue Per pupil equalized property assessment Per pupil taxable sales Per capita income Tax Burden Service Burden TSBA School Finance Academy October

24 Fiscal Capacity CBER Model (newer model per BEP 2.0) Determines a county s capacity to raise local revenues for education from its property and sales tax base 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 (1.1583) plus The County s sales tax base multiplied by a statewide sales tax rate for education (1.5570%) TSBA School Finance Academy October

25 Cost Differential Factor (CDF) Used to adjust BEP funding in systems where the cost of living in the county is greater than the statewide average Compares county wages in non-government industries to statewide wages Counties with above-average wages according to this index receive an increase Increase is applied to salaries, retirement contributions and FICA contributions Eliminated in BEP 2.0 Counties receiving an adjustment currently receive 50% of the calculated CDF due to 50/50 TACIR/CBER split TSBA School Finance Academy October

26 BEP Funding Formula Flexibility School boards have broad flexibility in determining how to allocate state funds. TSBA School Finance Academy October

27 BEP Funding Formula Cost evaluation BEP component costs are recalculated and updated for inflation each year. TSBA School Finance Academy October

28 BEP Funding Formula Inadequacies Not enough teaching positions funded to meet class-size mandates as required by state law High cost of educating English Learner (EL) students not recognized adequately Teacher salaries still not adequately addressed TSBA School Finance Academy October

29 BEP Funding Formula Inadequacies Teacher insurance not adequately addressed School nurse ratio inadequate Professional development for teachers not included Technology not adequately funded TSBA School Finance Academy October

30 History of the BEP 2007 BEP 2.0 passed Largest increase in state funding for education - $280 million Not fully implemented. Cost to fully implement additional $146 million BEP (Old Model) BEP 2.0 current BEP 2.0 full implementation $36,515 Salary Unit Cost $40,447 Salary Unit Cost $40,000 Salary Unit Cost 100% TACIR 50% TACIR, 50% CBER 100% CBER 100% CDF 50% CDF Eliminate CDF 38.5% At-Risk Funding 100% At-Risk Funding 100% At-Risk Funding 1:45 EL, 1:450 Translators 1:30 EL, 1:300 Translators 1:20 EL, 1:200 Translators 65% State Share Instructional 70% State Share Instructional 75% State Share Instructional TSBA School Finance Academy October

31 BEP many inputs CDF ADMs Fiscal Capacity Unit Costs BEP Salaries, Retirement, Insurance TSBA School Finance Academy October

32 BEP Components (45) by Category Instructional Classroom Non-Classroom Regular Education Vocational 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 Vocational Education Supervisors Special Education Assessment Personnel Social Workers Psychologists Staff Benefits and Insurance K-12 At-risk Class Size Reduction Duty-free Lunch Textbooks Classroom Materials and Supplies Instructional Equipment Classroom Related Travel Vocational Center Transportation Technology Nurses Instructional Assistants Special Education Assistants Library Assistants Staff Benefits and Insurance Substitute Teachers Alternative schools Exit Exams Superintendent System Secretarial Support Technology Coordinators School Secretaries Maintenance and Operations Custodians Non-instructional Equipment Pupil Transportation Staff Benefits and Insurance Capital Outlay TSBA School Finance Academy October

33 For further information Tennessee Basic Education Program: An Analysis See the Legislative Brief State Board of Education BEP Blue Book up to date data on BEP components Recommendations of BEP Review Committee %20Final%20Draft.pdf BEP Handbook comprehensive guide on calculations TSBA School Finance Academy October

34 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 TSBA School Finance Academy October

35 Local Funding Where does it come from? Local Option Sales Tax Half of revenue must be appropriated to education Other Sources (wheel tax, etc.) TSBA School Finance Academy October

36 Local Funding Tuition (out of district students) Local revenue per student less Transportation cost per student TSBA School Finance Academy October

37 Local Funding Maintenance of Effort (TCA ; TCA ) No local government can reduce its budgeted amount of local revenue for schools, unless there is a decrease in student enrollment or unless there is a local agreement for one-time expenditures. TSBA School Finance Academy October

38 Local Funding Fund Balance (TCA (c)) 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. TSBA School Finance Academy October

39

40 Accept the fact that relationships do not just happen. Bad relationships are easily achieved, but good relationships come from hard work. Good relationships can disappear without a notice. Remember that commissioners are, in fact, real people. Be willing to share complete, accurate information on all issues. To the greatest extent possible, involve commissioners in the decision-making process.

41 You have been appointed by your board to chair a group to recommend a plan for the board to work effectively with the commission. List as many suggestions as you can in 5 minutes. Then, select the best 5 to present to the group.

42 1. Estimate- Collections 2. Other Discretionary Funds 3. ADA, ADM- Class Size 4. Inflation 5. Collection

43 6. State Equalization 7. Fund Balance 8. Health Insurance 9. Economy 10.Mandates

44 12. Federal Cuts Mid Year 13. School Schedules- Special Education/ CTE 14. Cash Flow 15. Zoning

45 16. Election Year 17. Local Personalities 18. Growth Fund 19. Salary Schedule- Steps and Degrees

46 New Salary Schedule Options Differentiated Pay Plan

47

48

49 ADM & ADA Interest Stimulus Title State Equivalent Inflation Tuition

50 Facilities Transportation Risk Management

51 Budget Process 1. Planning 2. Approach 3. Calendar 4. Building Support TSBA School Finance Academy October

52 Planning Strategic Plan District goals & objectives (TCSPP) BUDGET TRIANGLE Individual schools SIP Revenue Plan Expenditure Plan TSBA School Finance Academy October

53 Approach Two Methods: SCHOOL BUDGET Plan the Budget Figure out how much revenue will be available and divide it up TSBA School Finance Academy October

54 Approach Two Methods: SCHOOL BUDGET Budget the Plan Identify what needs to be done and how much it will cost to do it Comprehensive needs assessment Zero-based budgeting TSBA School Finance Academy October

55 Required Additional Expenditures Labor (salaries & benefits) = 80%-85% of operating budget Health insurance Pension Salary steps Required state teacher raise TSBA School Finance Academy October

56 Required Additional Expenditures Opening New Schools Staff Utilities Materials & Equipment TSBA School Finance Academy October

57 Required Additional Expenditures Inflation Fuel Utilities Materials & Supplies Multi-Year Contracts TSBA School Finance Academy October

58 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 TSBA School Finance Academy October

59 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) TSBA School Finance Academy October

60 Statistical Data State Report Card District Individual schools State Data Expenditure per pupil calculation Other data (Annual Statistical Report) TSBA School Finance Academy October

61 SCHOOL FINANCE THANK YOU! TSBA School Finance Academy October

62

63

64 Take the initiative to establish personal relationships with other locally elected officials. Establish personal relationships with aides and office personnel of other elected officials. Invite local officials to a special tour of the school system and to attend school board meetings and other educational forums. Inform the funding body during the year as circumstances change.

65 Avoid confrontations. Be friendly, even if you disagree; be polite but firm. Be involved in the REAL MEETINGS. SMILE keep your sense of humor. Make appropriate items personal for commissioners (anything that affects their districts). Know the magic numbers TIMING.

66 Have key commissioners ready for motions and opinions. Have a plan. Keep close and keep them informed. Schedule individual time with each commissioner (visit homes). Use the Biscuit Rule.

67 Listen you must help meet their needs before you can get what your school system needs. Be flexible plan for rejections no is not forever. Negotiate for future funding announce publicly. Be a gracious winner or loser.

68 Question: Commissioner Houston Naron suggested that county commissioners feel that boards will always spend what the commission gives them and that boards always ask for more than is needed. Do you agree? What should boards do to overcome that perception?

69 Question: How can the board develop or improve upon a relationship of trust with the funding body?

70 Think that only you have good ideas or that your way is the only way. Let your pride or ego hurt your school system. Feel you must win each debate (be on equal ground with these people).

71 Win a battle that will cost you the war. Ask for a vote on something you know you won t get negotiate a future vote. Ride a dead horse or fight a battle you can t win.

72 Publicly criticize individuals on the funding body state your need and that the funding body is not presently ready to fund this and the repercussion. Demand funding your county may not be ready or able. Close the door. Let items affecting a commissioner personally or his district go unidentified. Be extravagant.