school finance in review - usba · final updates enrollments year-end average daily membership...

School Finance in ReviewFundamentals of School FinanceUSBA 95th Annual Conference

J A N UA R Y 5 , 2 0 1 8

Zane K. WoolstenhulmeBusiness AdministratorOgden School [email protected]

mailto:[email protected]

Discussion TopicsSCHOOL BOARDS AND BUDGETS

SCHOOL FINANCE FUNDAMENTALS

MINIMUM SCHOOL PROGRAM

Q & A

CALENDARS

CALENDAR YEAR (CY)

TAX YEAR (TY)

FISCAL YEAR (FY)

SCHOOL YEAR (SY)

SCHOOL BOARDS AND BUDGETS

Who’s Responsible?What’s my Responsibility?

SCHOOL BOARDS AND BUDGETS --- Continued

Title 53 A --- Utah Code Annotated --- State System of Public Education

• Chapter 3 --- Local School Boards

53A-3-402(2) --- Local school boards shall spend minimum school program funds for programs and activities for which the State Board of Education has established minimum standards or rules under Section 53A-1-402.

53 A-3-402(3) --- A board may purchase, sell, and make improvements on school sites, buildings, and equipment and construct, erect, and furnish school buildings.

http://le.utah.gov/xcode/Title53A/Chapter1/53A-1-S402.html?v=C53A-1-S402_2016051020160510


Title 53 A --- Utah Code Annotated --- State System of Public Education

• Chapter 19 --- School district and charter school budgets

53A-19-101(2) --- Before June 1 of each year, the budget officer shall prepare a tentative budget, with supporting documentation, to be submitted to the budget officer's governing board.

53A-19-102(2)(a) --- For a school district, before June 22 of each year, a local school board shall adopt a budget and make appropriations for the next fiscal year.


Who is the “Budget Officer”?a) District Superintendentb) District Budget Directorc) Business Administratord) Local Board President

SCHOOL FINANCE FUNDAMENTALS

WHERE DOES IT COME FROM?

WHERE DOES IT GO?

MOVING TARGET

PRELIMINARY ESTIMATES

MID-YEAR UPDATES

FINAL UPDATES

ENROLLMENTS◦ YEAR-END AVERAGE DAILY MEMBERSHIP

◦ OCTOBER 1ST

SCHOOL FINANCE FUNDAMENTALS --- Continued

BUCKETS OF FUN(DS)

GENERAL FUND

STUDENT SERVICES FUND

TAX INCREMENT FUND

DEBT SERVICE FUND

CAPITAL PROJECTS FUND

FOOD SERVICES FUND


OTHER FUNDS

BUILDING RESERVE FUND

ENTERPRISE FUND

INTERNAL SERVICE FUND

TRUST AND AGENCY FUND


WHERE DOES IT GO?

Instruction,

65.24%

Support

Services, 7.95%

Transportation 3.32%

Physical Plant,

10.57%

Administration,

11.13%

Other, 2.00%

2016 Public Education General Fund --- Expenditures $4,240,969,029 USOE FINGER TIP FACTS 2016-17


WHERE DOES IT GO? --- Another View

Salaries &

Benefits, 84.78%

Purchased

Services, 5.60%

Property & Misc.,

3.14%

Supplies, 6.47%

2016 Public Education General Fund --- Expenditures


WHERE DOES IT COME FROM?

Federal, 6.82%

Local, 27.02%

State, 66.16%

2016 Public Education General Fund --- Total Revenue $4,297,269,764USOE Fingertip Facts 2016-17

24.23% Property Taxes

2.79% Tuition, Fees & Investments


FEDERAL REVENUETITLE PROGRAMS◦ Poverty◦ Mobility & Homeless◦ English Language Learners◦ Quality Teaching / Professional Development◦21st Century Schools

IDEA – SPECIAL EDUCATION PROGRAMS◦ Medicare & Medicaid Reimbursement Programs

FEDERAL IMPACT AID

DIRECT GRANTS


LOCAL REVENUEPROPERTY TAXES (General Fund)◦ Basic Levy (Set by State) .001568 --- Same for all School Districts)

◦ Board Local Levy (Legal Max .001800 or .002500)

◦ Voted Local Levy (Voter Authorized, Max .002000)

PROPERTY TAXES (Other Funds)◦ GO Bond Payments Levy Sufficient to Pay Voter Authorized Debt Payments

◦ Capital Local Levy (Legal Max .003000)

◦ Discharge of Judgement As Permitted to Pay Property Tax Refunds

Charter School Levy Offset by decrease in Board Local Levy


LOCAL REVENUEGovernor Gary R. Herbert:

Budget Recommendations – Fiscal Year 2019

◦ “ State law allows school districts to impose discretionary property tax levies to provide services above the levels possible with state funding.”

◦ “Over $800 million in local discretionary property tax authority remains available under existing statutory property tax rate caps … includes over $355 million in levies for school operations and over $446 million of taxing authority under the capital levy that can be used for items such as buildings and technology infrastructure.”


“Never blame congress for not doing something. When they do nothing, that don't hurt anybody. When they do something is when they become dangerous.”--Will Rogers--

Property Tax Matters Tax Rate Formula:

Assessed Valuation X Tax Rate = Tax Revenue

Assessed Valuation?◦ The Sum of Taxable Value of All Properties within the Jurisdiction

◦ Based on Fair Market Value of Properties◦ Primary Residential (Real) Property Taxed @ 55% of Market Value

◦ Other Locally Assessed Real Property (Second Homes) Taxed @ 100% of Market Value

◦ Centrally Assessed Property (Utilities, Mines, Airlines, Railroads, Oil & Gas) Taxed @ 100% of Market Value


Certified Tax Rate ◦ That rate which will yield the same property tax revenue that it

budgeted in the previous year (and includes an allowance for revenue generated from real new growth in its tax base).

◦ Includes the rate required to pay the debt service associated with Voter Authorized General Obligation Bonds.


Tax Values

Tax Rates

BASIC LEVY HISTORYFISCAL YEAR BASIC LEVY

1994-95 .004220

1995-96 .002640

2005-06 .001720

2008-09 .001250

2012-13 .001650

2014-15 .001419

2015-16 .001736

2017-18 .001568

BASIC LEVY 1987-Present

0.000000

0.000500

0.001000

0.001500

0.002000

0.002500

0.003000

0.003500

0.004000

0.004500

0.005000


STATE REVENUE

• STATE INCOME TAX (Primary Source)

• SCHOOL LAND TRUST (INTEREST & DIVIDENDS)

• OTHER

State Education Fund

$ 3.75 Billion


STATE FUNDING

HOW DOES THE MONEY FLOW ?

Funding Distribution?


MINIMUM SCHOOL PROGRAM -- (MSP)

Primary funding source for school districts and charter schools in Utah. The Fiscal Year (FY) 2018 total budget is $4,093,382,300, including State & Local Revenue

Used to support over 1,000 traditional, alternative, special education and charter schools for about 652,000 Utah students.

Distributed according to formulas provided by State Law and State Board Rules.

Weighted Pupil Unit

•PRIMARY DISTRIBUTION UNIT WITHIN MSP

•180 DAYS OF MEMBERSHIP ONE WPU (Membership Driven not Attendance Driven)

Minimum School Program --- Continued

FY18 WPU VALUE

$ 3,311


1 % Increase in the WPU costs about $30 Million

WPU WEIGHTINGSCHOOL DISTRICT STUDENTS

Kindergarten Students --- 55%

Grades One thru 12 ---- 100%

CHARTER SCHOOL STUDENTS

Kindergarten Students --- 55%

Grades One thru Six ---- 90%

Grades Seven & Eight ----- 99%

Grades Nine thru 12 ---- 120%


FISCALYEAR

WPU VALUE

CPI Adjusted

1987-88 $1,204 $2,510

1994-95 $1,608 $2,676

2000-01 $2,006 $2,874

2006-07 $2,417 $2,957

2010-11 $2,577 $2,915

2013-14 $2,899 $3,070

2017-18 $3,311 $3,311

CPI Adjusted WPU Value

$-

$1,000

$2,000

$3,000

$4,000

WPU Value

$0

$1,000

$2,000

$3,000

$4,000

Change: $ 2,107 $ 801

Minimum School Program--- Continued

Minimum School Programs

A. Basic School ProgramsRegularRestricted

B. Related to Basic School Programs

C. Board and Voted Local Levy Programs

D. School Building Programs (Funded Separately from MSP)


MSP ---- The Equalizer

DISTRICT ALPINE SALT LAKE PARK CITY TINTIC IRON

BASIC SCHOOL PROGRAMS $ 287,970,439 $ 97,886,283 $ 19,342,882 $ 2,669,468 $ 39,557,666

Locally Generated $ 34,748,243 $ 37,496,448 $ 23,387,938 $ 107,375 $ 6,691,705

MSP STATE FUNDED $ 253,222,196 $ 60,389,835 N/A $ 2,562,093 $ 32,865,961

Percent State Funded 88% 62% Zero 96% 83%

Average All Districts – 83%Source: USOE -- FY17 Final Summaries


(FY 17 Basic Rate .001675)

The Infamous “LINE”


Minimum School ProgramsA. Basic School Programs (WPU Driven)

B. Related to Basic School Programs

C. Board and Voted Local Levy Programs

D. School Building Programs (Funded Separately from MSP)

T H E “L I N E”


The “LINE”

Basic School Programs(WPU DRIVEN FUNDING)

Related to Basic School Programs (Non-WPU Formula Driven Funding)

ABOVE

BELOW


Basic School Programs –Regular (Above the Line)

1. Kindergarten (27,099 WPUs, $89.7 Million)

2. Grades 1-12 (587,693 WPUs, $1.946 Billion)

3. Necessarily Existent Small Schools (9,514 WPUs, $31.5 Million)

4. Professional Staff Cost (55,808 WPUs, $185 Million)

5. Administrative Costs (1,565 WPUs, $5.2 Million)

Per MSP FY18 Revised Appropriations --- Governors FY19 Budget


"This country has come to feel the same when Congress is in session as when a baby gets hold of a hammer.“--Will Rogers--

Basic School Programs – Restricted (Above the Line)

Special Education Programs (109,076 WPUs, $361.2 Million)

Career & Technology Education – Add On (28,480 WPU’s, $94,297,300)

Class Size Reduction (40,909 WPUs, $135.5 Million) Note: Based on the average teacher’s salary --- 1,800 teachers state-wide.


Related to Basic Programs (Below the Line)

1. To and From School Pupil Transportation ($83.7 Million)

2. Pupil Transportation (Unsafe Routes Grants) ($500K)

3. Guarantee Transportation Levy ($500K)

4. Flexible Allocation Distribution ($7.8 Million)


Related to Basic Programs (Continued)

Special Populations – (Major Programs)

Enhancement for At-Risk Students ($28 Million)Youth in Custody ($22.7 Million)Adult Education ($11 Million)Enhancement for Accelerated Students ($5 Million)Concurrent Enrollment ($10.7 Million)Misc. Other Programs ($550K)



◦ Other Programs 1. School LAND Trust Program ($50.4 Million) 2. Charter School Local Replacement ($170.5 Million)3. Charter School Administrative Costs ($7.8 Million)4. K-3 Reading Improvement Program ($15 Million)5. Educator Salary Adjustment ($173.6 Million)6. Teacher Salary Supplement Restrict Account ($6.8 Million)7. Library Books & Electronic Resources ($850 K)8. Matching Fund for School Nurses ($1 Million)9. Critical Languages & Dual Immersion ($3.5 Million)10. Year-Round Math & Science (USTAR Centers) ($6.2 Million)11. Early Intervention ($ 7.5 Million)12. Beverly Taylor Sorenson Arts Learning Program ($9.8 Million)13. Digital Teaching & Learning Program ($9.8 Million)14. Teacher Supplies ($5 Million)15. Misc. Other Programs ($455.7K)



One-Time Funding Items

None for Fiscal Year 2018


VOTED AND BOARD LOCAL LEVY PROGRAMS

1. Voted Local Levy Program $453.2 Million *** (Up to .001600 Tax Rate)

2. Board Local Levy Program $136.8 Million *** (Up to .000400 Tax Rate)

3. Board Local Levy – Reading Improvement Program $15 Million

*** Guarantee Rate (per 0.0001 Tax Rate per WPU) $38.54

Voted & Board Levy GuaranteeDISTRICT CACHE Jordan SOUTH

SUMMITPROVO SOUTH

SANPETE

Voted and Board LevyProgram

$ 17,505,826 $ 52,163,783 $ 1,884,757 $ 15,888,042 $ 3,721,801

LOCAL TAX RATE (EFFORT) .002704 .002244 .002925 .002693 .003365

Local Tax Rate Generated $ 8,607,020 $ 37,929,195 $ 1,884,757 $ 8,241,732 $ 1,168,460

MSP STATE FUNDED $ 8,898,806 $ 14,234,588 N/A $ 7,646,309 $ 2,553,341

Percent State Funded 51% 27% N/A 48% 69%

Return On Tax Effort 1.03 .38 N/A .93 2.19

26 Districts ParticipatingSource: USBE -- FY17 Final Update

School Building Programs

Capital Outlay Programs(Reference: Utah Code 53A-21-101,201,301)

1.Foundation ($27.6 Million)Based on local property tax effort and tax yield per student based on a foundation guaranteed funding level. (15 Districts)

2. Enrollment Growth ($5.6 Million)Provides funding to school districts experiencing net enrollment increases. (16 Districts)

“If we got one-tenth of what was promised to us in these acceptance speeches there wouldn’t be any inducement to go to heaven“--Will Rogers--

Pulling Together, Great Things Can Happen !!!

school finance in review - usba · final updates enrollments year-end average daily membership...

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