understanding general aid erin fath, assistant director, school financial services team, dpi bob...
TRANSCRIPT
Understanding General Aid
Erin Fath, Assistant Director, School Financial Services Team, DPI
Bob Avery, Director of Business Services,
Beaver Dam Unified School DistrictKaren Kucharz Robbe, Finance
Consultant,School Financial Services Team, DPI
Agenda
Review of Underlying Principles of Equalization Aid
Walk-Thru the Equalization Aid Worksheet
Discuss Other General Aid Programs, including “Special Adjustment” (aka “Hold Harmless”) Aid
2
Handouts
A. Sample District (% method Equalization Aid)
District-Specific 2013-14 October 15 Certification
(% method Equalization Aid) B. Simplified Percentage Method
Scenario Handout
District-Specific 2014-15 July 1 Estimate
(statutory method Equalization Aid) C. Sample Longitudinal Equalization Aid
District-Specific Longitudinal Equalization Aid
Power Point Slides
44
Under Article 10 of WI State Constitution, the State Legislature is responsible for establishing school districts
which are to be:
“as uniform as practicable … ”
“free and without charge for tuition to all children”
“each town and city shall be required to raise by tax, annually, for the support of common schools therein……”
How does the Legislature achieve this?
Equalization Aid
Property ValueInequality
5
($1,000,000/1,000) x $10 = $10,000
66
The State provides financial assistance in the form of Equalization/General Aid to school districts in order to:
Reduce the reliance upon the local property tax as the sole source of revenue for educational programs.
Guarantee that a basic educational opportunity is available to all pupils regardless of the local fiscal capacity of the district in which they reside.
A student should not be unfairly disadvantaged as a consequence of where he or she lives.
Equalization Aid
77
Equalization Aid
The fundamental purpose of the Equalization Aid formula is to “level the playing field” by providing assistance (distributing aid) to poorer districts (those with lower property value) to
make up for what they can’t get from their property tax base.
Legislature and Funding Formula
8
Equalization Aid
Property Tax Base
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
Number of Children
to Educate
2010 10 10 10$100,000
$400,000 $250,000
$300,000
$200,000
Notice how the tax base, as a measure of wealth, changes after incorporating the number
of children to educate.
Property Value
per Member
10
11
# of Districts Receivin
g Aid
14-15 July 1 Aid Estimate(Prior to Choice/Charter
deductions)
% of General Aid Appropriatio
n
Equalization 405 $4,391,233,379 98.1%
Inter-District 22 $20,778,746 0.5%
Intra-District 4 $44,800,895 1.0%
Special Adjustment 72 $19,145,775 0.4%
Total General Aid * 422 $4,475,958,795 100.0%
No General Aid 2 $0
General School Aids
* Some districts receive more than one type of aid.
12
General School Aids
All 4 aid types are considered “General Aid” & are included in Line 12A of the Revenue
Limit Worksheet.
Equalization Aid: based on Membership, Shared Costs, Equalized Values – “ability to pay” determines position in formula
Inter-District Aid: based on eligible costs / pupils (only 22 districts)
Intra-District Aid: based on eligible pupils / Equalization Aid (only 4 districts)
Special Adjustment Aid: ensures districts receive at least 85% of the prior year’s General Aid eligibility (Equalization/Inter-/Intra- Aids)
Equalization Aid
Why do you need to know how to calculate aid
when DPI calculates it for you?
Because you will be asked by your board members, constituents, and the media.
So you can figure out why your aid has changed AND explain why.
Because you may want to do estimates and “what ifs”…
Equalization Aid
3 District Factors
Spending (Shared Cost)
Wealth (Property Tax Base)
Number of Students to Educate (Membership)
Total General Fund (Fund 10) Expenditures
+ (plus)Total Debt Service Funds (Funds 38 &
39) Expenditures- (minus)
all local misc. revenue, grant revenue,and categorical aid.
Result is “Shared Cost”
Shared Cost
Local Property
Tax43%
Local Misc. Receipts
1%Other Misc.3%
State General
Aid44%
Categor-ical
State Aid3%
Federal Aid5%
General Fund (10)Net Cost
Local Property
Tax98%
Misc Local Revenue
2%
Debt Service Funds (38 & 39)
Net Cost
Shared Cost
Property Value
Property tax base is used to determine district wealth and ability
to support district expenditures.
Uses Equalized Valuation or Fair Market Value.
(NOT Assessed Value)
Values certified in May are used in the following year’s aid calculations.
Membership
Average of 3rd Friday F.T.E. - September
2nd Friday F.T.E. - January(each count includes parttime attendance, residents and non-
residents)
+ Summer School F.T.E
F.T.E. = full-time equivalent2 halftime (.50) kindergarten students = 1 F.T.E.
Summer School = 48,600 minutes of instruction = 1 F.T.E.
Equalization Aid
The computation is actually 3 individual
computations……..
The results of all 3 are summed to get the district’s total aid.
Equalization Aid
3 State Factors
Cost Ceilings
Guaranteed Property Valuations Per Member
Amount of Money to Distribute
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
14,000
15,000
0 200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
2,200,000
2,400,000
2,600,000
2,800,000
3,000,000
3,200,000
3,400,000
DISTRICT VALUE PER MEMBER
DIS
TR
ICT
SH
AR
ED
CO
ST
PE
R M
EM
BE
R
Positive Primary Aid
Positive Secondary
Aid
District Value per Member
10%
90%
75%
25%
50%
50%
Equalization Aid
Positive Tertiary
Aid
DISTRICT
10% x $1,000
= $100
25% x $8,000
=$2,000
50% x $3,000
=$1,500
$3,600
STATE
90% x $1,000
= $900
75% x $8,000
= $6,000
50% x $3,000
= $1,500
$8,400
$3,600 + $8,400 = $12,000
Per-Pupil FundingSample District #1
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
14,000
15,000
0 200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
2,200,000
2,400,000
2,600,000
2,800,000
3,000,000
3,200,000
3,400,000
DISTRICT VALUE PER MEMBER
DIS
TR
ICT
SH
AR
ED
CO
ST
PE
R M
EM
BE
R
Positive Primary Aid
Positive Secondary
Aid
Positive
Tertiary
Aid
Negative Tertiary Aid
Equalization Aid
DISTRICT
30% x $1,000
= $300
75% x $8,000
= $6,000
150% x $3,000
= $4,500
$10,800
STATE
70% x $1,000
= $700
25% x $8,000
= $2,000
-50% x $3,000
= $-1,500$1,20
0$10,800 + $1,200 = $12,000
Per-Pupil FundingSample District #2
“October 15, 2013 ACT 46 Equalization Aid Computation – Percentage Method – Algebraic
Format”
http://sfs.dpi.wi.gov/sfs_buddev_eq
Location: SFS Homepage > Longitudinal Data > Equalization Aid
(handout)
Finding the Equalization Aid Percentage on the Internet
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
14,000
15,000
0 200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
2,200,000
2,400,000
2,600,000
2,800,000
3,000,000
3,200,000
3,400,000
DISTRICT VALUE PER MEMBER
DIS
TR
ICT
SH
AR
ED
CO
ST
PE
R M
EM
BE
R
Positive Primary Aid
Positive Secondary
Aid
Positive Tertiary
Aid
District Value per Member
Negative Tertiary Aid
Negative Secondary Aid
No Equalization Aid
Equalization Aid
http://sfs.dpi.wi.gov/sfs_buddev_eq
Location: SFS Homepage > Longitudinal Data > Equalization Aid
Finding the Grid on the Internet
“2013-14 Equalization Aid Formula Position”
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
14,000
15,000
0 200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
2,200,000
2,400,000
2,600,000
2,800,000
3,000,000
3,200,000
3,400,000
DISTRICT VALUE PER MEMBER
DIS
TR
ICT
SH
AR
ED
CO
ST
PE
R M
EM
BE
R
Positive Primary Aid
Positive Secondary
Aid
Positive Tertiary
Aid
District Value per Member
Negative Tertiary Aid
Negative Secondary Aid
No Equalization Aid
Equalization Aid
Watch Value Per Member Over Time
http://sfs.dpi.wi.gov/sfs_buddev_valuation
Location: SFS Homepage > Longitudinal Data > Property Valuation
(handout)
Finding the Value Comparison on the
Internet
“Longitudinal Equalization Aid Value-Per-Member
History”
Equalization Aid
Knowing where your district is in the formula will help you better explain how changes in local finances might affect
your state aid.
Simplified percentage method scenarios:http://sfs.dpi.wi.gov/sfs_workexe
What if we
underspend
our budget?
How does
that affect
our aid?
If we go to referendum, how will our aid change?
1. One (1) pot of money is split over 424 school districts based on district values, membership, and expenditures. Changes in individual district’s data affect each other’s aid.
2. Equalization Aid membership is an average of the September & January FTE counts, plus 100% of the Summer FTE. (includes parttime attendance)
3. Depending on district value-per member, some districts increase their aid by increasing expenses, while others decrease their aid by increasing expenses. It’s important to know where your district is in the formula.
4. Be aware of what is happening to your district over time.
Equalization Aid Takeaways
Equalization Aid - Using What You Know(for table discussion)
1.) How would a district’s aid change if the membership was 10% higher? 10% lower?
2.) How would a district’s aid change if there was 10% more cost and same number of kids? 10% less cost?
Value per member would change.
All things being equal, more membership, less value-per-member, more aid
…and vice versa.
Which tier changes? Positively-aided would get more aid, negatively-aided would get less aid
...and vice versa.
Equalization Aid - Using What You Know
(for table discussion)
3.) How would a district’s aid change if the value was 10% higher? 10% lower?
Value per member would change.
All things being equal, more value would mean less aid
…and vice versa.
Equalization Aid - Using What You Know
(for table discussion)
4.) I’ve heard about 2/3rds funding. Does this mean I will get reimbursed for 66% of my Shared Cost?
No. The percentage aid a district will get in the aid formula depends on the district’s spending and
value per member.
2/3rds NEVER meant anything that applied specifically to districts. This was a calculation done
at the state level that added together several revenue sources (total school levies, total state and categorical aid and total levy credit) to determine the “pot” of aid to be distributed by the formula.
2/3rds is no longer law.
Special Adjustment Aid
2013-14 Final Aid Eligibility*
Equalization Aid (Line H1)
$914,004
Inter-District (Line I1)
$0
Intra-District (Line I1)
$0
Special Adjustment (Line I1)
$31,833
Total $945,837
X .85
85% Minimum for 2014-15
$803,961
2014-15 Aid Eligibility*
Equalization Aid (Line H1)
$523,943
Inter-District (Line I1) $0
Intra-District (Line I1) $0
Special Adjustment (Line I1)
$280,018
Total $803,961
X .85
85% Minimum for 2015-16
$683,367
Special Adjustment Aid ensures the district receives at least 85% of the prior year’s General
Aid eligibility.
* Prior to Choice/Charter Deductions.
Bruce Anderson, Consultant 608-267-9707Carey Bradley, Consultant 608-267-3752Dan Bush, Consultant 608-267-9212Karen Kucharz Robbe, Consultant 608-266-3464Gene Fornecker, Auditor 608-267-7882Michele Gundrum, Auditor 608-267-9218Brian Kahl, Auditor 608-266-3862Vacant, Assistant Director 608-267-9209Bob Soldner, Director 608-266-6968
Email: [email protected]: (608) 267-9114 Fax:
(608) 266-2840
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