The Commonwealth of Virginia Formulae for Funding Public Elementary and Secondary Education. Washington County Public Schools

Transcription

1 The Commonwealth of Virginia Formulae for Funding Public Elementary and Secondary Education Washington County Public Schools

2 FUNDS #312 GENERAL $74,413,903 #315 TEXTBOOK $1,883,432 #316 FACILITY $862,206 #317 FOOD SERVICE $3,904,932 BUDGET FISCAL YEAR (FY) ,064,473 Page 1

3 School Funds Fiscal Year Budget 1. $74.4 million - General Fund The General Fund is the source of ongoing operational activities for educational purposes including the maintenance of facilities, capital items, transportation, technology, etc. Financing is provided by State, Federal and Local government contributions. The general fund balance is available to the school district for any purpose provided it is disbursed or transferred in accordance with state law. 2. $1.8 million School Textbook Fund The School Textbook Fund is maintained for the purpose of funding textbooks. This fund can rollover from year to year. Every fifth year, the school system has an adoption year in which system wide replacement of textbooks occurs.

4 School Funds Fiscal Year Budget 3. $862,206 School Construction Fund The School Construction Fund is the source of major building financing from public bond proceeds or debt acquired for new facilities, renewals, expansions and building modifications. The School Construction Fund is used to account for and report financial resources that are restricted, committed, or assigned to projects arising from debt financing. $3.9 million Food Service Fund The Food Service Fund is a propriety fund (can accumulate earnings at year end) used for student meal programs. The majority of these revenues are from sales (student purchases) and federal and state funding of school lunch programs.

5 State Aid to Public Schools All 50 states provide funding for public schools in one manner or another. Through the state s direct aid to public education budget, Virginia provides funding for 136 public school divisions that serve approximately 1.24 million students. State support for direct aid to public education totals over $6.0 billion. In Virginia, aid is provided through the Direct Aid to Public Education through annual appropriations contained in the Appropriation Acts.

6 6 Direct Aid to Public Education Appropriation Acts Article VIII, Section 2. Standards of quality; State and local support of public schools. Standards of quality for the several school divisions shall be determined and prescribed from time to time by the Board of Education, subject to revision only by the General Assembly. The General Assembly shall determine the manner in which funds are to be provided for the cost of maintaining an educational program meeting the prescribed standards of quality, and shall provide for the apportionment of the cost of such program between the Commonwealth and the local units of government comprising such school divisions. Each unit of local government shall provide its portion of such cost by local taxes or from other available funds.

7 STATE FUNDING Elementary and Secondary Education Funding 7 Average Daily Membership/Enrollment (ADM) is the basis for a significant share of a division s state contribution allocation. The localities Composite Index determines the Local Ability to Pay. The higher the localities ability to pay, i.e. wealth, the less contribution received from state funds. The idea is to spread out the burden of funding over a larger population to raise the floor level of services for all students in the Commonwealth. Some localities have a greater ability to fund education than others. This ability, or lack of ability, is called fiscal capacity. Virginia utilizes a formula for determining a locality s ability to fund education. That formula is called the composite index.

8 Elementary and Secondary Education Funding Each of the 136 school divisions in Virginia are treated as a unit of measurement. Each school division has equal weight regardless of size, capacity, or effort => Linear Estimator. This means that Washington County has the same weight in determining costs as does Fairfax County. The linear estimator is used to calculate costs and theoretically gives equal weight to each division in terms of costs. Capacity does not always equal effort. A locality can have a high capacity to fund educational programs but may choose not to fund these local educational needs. VEA Research Services, : Virginia ranks 15th in wealth as measured by per capita income but ranks 45th in state support for public education based on that income.

9 Composite Index Elementary and Secondary Education Funding The fiscal resources that a locality puts into education is called local effort. The Composite Index is a Measure of wealth based on a locality s: Sales Tax Income Tax Property Tax The composite index is computed to have a theoretical range of 0 (extreme poverty) to 1.0 (extreme wealth) A composite index of 0 would indicate that the locality has virtually no ability to pay and that the floor of education services would be carried almost entirely by the Commonwealth. A composite index of 1.0 would indicate a locality has the ability to fund the floor of education services without any financial assistance from the Commonwealth.

10 Composite Index Elementary and Secondary Education Funding The Composite Index determines a school division s ability to pay education costs fundamental to the commonwealth s Standards of Quality (SOQ). The Composite Index is calculated using three indicators of a locality s ability-topay: True value of real property (weighted 50 percent) Adjusted gross income (weighted 40 percent) Taxable retail sales (weighted 10 percent) Each locality s index is adjusted to maintain an overall statewide local share of 45 percent and an overall state share of 55 percent.

11 Determining State & Local s Composite Composite Index Index of Local of of Local-Ability-to Ability-to-Pay Ability-to-Pay Formula Formula Form (Department of Education) ADM Component = ADM Component = Local True Value of Property Local Adjusted Gross Income Local Taxable Retail Sales Local True Value of Property Local Adjusted Gross Income Local Taxable Retail Sal Local ADM Local ADM Local ADM.5 Local ADM +.4 Local ADM +.1 Local ADM State True Value of Property State Adjusted Gross Income State Taxable Retail Sales State State ADM True Value of Property State State ADM Adjusted Gross Income State State ADMTaxable Retail Sales State ADM State ADM State ADM Population Component = Local True Population Value of Component Property = Local Adjusted Gross Income Local Taxable Retail Sales Local Local Population True Value of Property Local Population Local Adjusted Gross Income Local Population Local Taxable Retail Sal Local Population +.1 Local Population Local Population State.5 True Value of Property State +.4 Adjusted Gross Income State Taxable +.1 Retail Sales State State Population True Value of Property State State Population Adjusted Gross Income State Population State Taxable Retail Sales State Population State Population State Population Local Composite Index = ((.6667 x ADM Local Component) Composite + Index (.3333 = x Population Component)) x 0.45 (average local share) ((.6667 x ADM Component) + (.3333 x Population Component)) x 0.45 (average local share)

12 12 The Standards of Quality (SOQ) - SOQ FUNDING - The Standards of Quality, established in the 1971 Constitution of Virginia prescribe the minimum foundation program that all public schools in Virginia must meet. The Standards are established in the Constitution of Virginia and defined in the Code of Virginia. Only the Board of Education and the General Assembly can alter the standards. The decision about how much to appropriate for public schools is left to the General Assembly. The General Assembly is charged with revising the SOQ, determining SOQ costs, and apportioning the cost between the state and localities. State funding must be matched by the locality. Localities may spend more than the required amounts and offer programs and employ staff beyond what is required.

13 13 Overview Key components of the SOQ funding framework Staffing: minimum instructional positions required by the Standards of Quality Class size ratios for students to teachers; Ratios for principals, librarians, & guidance counselors, etc.; Special education, remedial, ESL, career & tech., gifted Fall membership enrollment (by school by grade), projected ADM Calculation of Total Costs: cost of the positions and related support functions Instructional Costs Base year prevailing salaries (Linear weighted average of actual ASR data) updated for G.A. salary increases to beginning of the biennium, Cost of competing adjustment (COCA), Benefits rates Support Costs Base year prevailing expenditures updated for inflation rates to the beginning of the biennium, COCA, Benefits rates, Transportation Deduct 29% of certain federal revenues Sharing of Costs Between State & Local: How the total costs are divided Basic Aid: 1-1/8 cent sales tax based on triennial census of school aged population Remainder is equalized based on composite index of local ability-to-pay (on average 55% state share-45% required local effort, max. of 80%) on per pupil basis (actual ADM)

14 14 Prevailing Costs Linear Weighted Average Since spending reflects in part local decisions about how to operate schools, the SOQ model does not simply reimburse actual spending. Instead, the methodology recognizes reasonable costs that approximate what most school divisions spend, without being unduly influenced by the extremes. Using actual base year expenditure Annual School Report (ASR) data (from all revenue sources) from all school divisions, a weighted average is calculated for each of various cost components. The base year is the most recent year for which actual data is available when the biennial costs are developed: Biennium (FY09, FY10): Base Year FY06 Costs clustered around the middle are weighted 5 times that of the costs at the far low and high extremes. Base year salaries and support costs are updated to the start of the biennium. Benefits for VRS, Group Life, Retiree Health Care Credit are applied. Cost of competing labor market adjustments are applied.

15 Determining SOQ Costs Three components of SOQ cost: 1. required number of instructional positions (salary and benefits) driven by staffing standards in Standard 2, appropriation act, and BOE regulations; 2. recognized support positions (salary and benefits); and, 3. recognized non-personal support costs (e.g., supplies, utilities, etc.). The support cost components (2 & 3) are funded through Basic Aid mostly on a prevailing cost basis. Each SOQ account is funded by a per pupil cost calculated for each division and distributed on March 31 ADM.

16 Washington County Schools - Basic Aid Per Pupil Amount Calculations FY 2015 Projected FY 2016 Total Number of SOQ Funded Instructional Positions Instructional Positions Cost $17,991,182 $17,974,797 Support Cost $17,949,806 $17,919,262 Health Care Cost $2,212,479 $2,210,426 Total: $38,153, $38,104, Net Basic Aid Cost $38,153,466 $38,104,485 Unadjusted March 31 ADM (Original Projection in SOQ Model) Basic Aid PPA (Prior to Adjustments): Adjustments: Add: Instructional Technology PPA Add: Elementary Resource Teacher PPA Deduct: Applicable Federal Revenues 7,112 7,106 $5, $5, $47 $47 $142 $142 ($233) ($233) Adjusted Basic Aid PPA: $5, $5, Projected Basic Aid State-Local s FY 2015 Projected FY 2016 Net Basic Aid Per Pupil Amount $5,321 $5,318 Projected Adjusted March 31 ADM 7,082 7,082 Total Cost $37,683,428 $37,662,182 Less Projected Sales Tax Distribution (7,564,912) (7,822,054) Net Basic Aid Cost d between State/Locality $30,118,516 $29,840, Composite Index (CI) State (Net Cost X (1 - CI)) $18,634,326 $18,462,087 Less Basic Aid Adjustments N/A N/A Adjusted State (Net Cost X (1 - CI)) Local (Net Cost - State ) $18,634,326 $18,462,087 $11,484,190 $11,378,041

17 Required Local Effort FY 2015 and Projected FY 2016 SOQ Programs FY 2015 Projected FY 2016 Basic Aid 11,484, ,378, Textbooks 1 259, , Vocational Education 413, , Gifted Education 126, , Special Education 1,198, ,198, Prevention, Intervention, & Remediation 405, , VRS Retirement 1,474, ,433, Social Security 726, , Group Life 45, , English as a Second Language 2 20, , Early Reading Intervention 2 30, , SOL Algebra Readiness 2 54, , Required Local Effort: $16,239, $16,092, Note: The above amounts represent the projected FY 2015 and FY 2016 Required Local Effort based on the Amendments Adopted by the 2015 General Assembly to the Governor's Introduced Biennial Budget (HB 1400/SB 800). Note: Final Required Local Effort is based on final March 31 ADM and the final per pupil amounts for each fiscal year. 1 State funding for Textbooks is provided from the general fund in the SOQ Service Area, as well as from Lottery proceeds in the Lottery Service Area. The Required Local Effort for Textbooks is based on the payments from the SOQ and Lottery Service Areas. 2 English as a Second Language, Early Reading Intervention, and SOL Algebra Readiness are mandated as part of the Standards of Quality, therefore local matching funds for these programs are included in school divisions' Required Local Effort. The Required Local Effort for these programs is based on the payments from the Lottery Service Area.

18 Funding SOQ Costs Key input data used to cost out the three components are updated every two years during re-benchmarking: 1. Number of students - ADM 2. Staffing standards for teachers and other instructional positions 3. Salaries of teachers and other instructional positions 4. Fringe benefit rates 5. Standard and prevailing support costs 6. Inflation factors 7. Federal revenues deducted from support costs 8. Amount of sales tax revenue and school division composite indices

19 Determining SOQ Costs SOQ Funding Process Prevailing Federal Revenues (Department of Education) Number of Students Salaries Fringe Benefits Prevailing & Standard Support Costs Staffing Standards Calcs. in SOQ Funding Model Add Cost Components - Instructional positions - Support positions - Nonpersonal support Inflation Factors Deduct Federal Revenues - Federal portion related to support costs only TOTAL SOQ COSTS Per Pupil Amounts for each SOQ account and each division Basic Aid Multiplied by Projected Enrollment (ADM) All other SOQ Accounts Apply Composite Index Subtract Sales Tax Allocation TOTAL COST Apply Composite Index State 55% Local 45% State 55% Local 45%

20 Staffing Standards Class Size and Other Ratios: :2 Basic Instructional Standards for Basic Aid Funding in Biennium (Standard 2) Standards of Quality Class Sizes/Ratios Standards of Quality School-level Staffing Grade K School-wide Division-wide Division-wide Maximum Pupil-Teacher Pupil-Teacher English Pupil- Guidance Assistant Class Sizes Ratio Ratio Teacher Ratio Counselor Librarian Principal Principal 24; 29 w/ aide UN 24 to 1 in FY to 1 in FY to 1 25 to 1 24 to 1 E L E M E N T A R Y S C H O O L P O S I T I O N S.20 per 100 students (500 to 1).20 per 80 students (400 to 1).20 per 70 students (350 to 1) less than 300 students=.50; 300 or greater students=1.0 less than 600 students=0.0; 600 to 899 students=.50; 900 or greater students=1.0 M I D D L E S C H O O L P O S I T I O N S less than 300 less than 600 students=.50; 300 to students=0.0; 999 students=1.0; 1.0 per 600 1,000 or greater students students=2.0 H I G H S C H O O L P O S I T I O N S less than 300 less than 600 students=.50; 300 to students=0.0; 999 students=1.0; 1.0 per 600 1,000 or greater students students=2.0 less than 300 students=.50; 300 or greater students= Other funded division-wide SOQ standards adopted by the 2004 General Assembly: Five resource teachers in art, music, and physical education per 1,000 students in grades K-5 One technology support position per 1,000 students in grades K-12 in FY2005 One support technology and one instructional technology position per 1,000 students in grades K-12 in FY instructional positions per 1,000 students identified as having limited English proficiency (ESL) 20

21 Standards of Quality Programs: Washington County Virginia Schools State and Local SOQ Funding FY15 and FY Composite Index FY 2015 State FY 2015 Local FY 2016 State FY 2016 Local Basic Aid 18,634,326 11,484,190 18,462,087 11,378,041 Sales Tax 7,564,912 N/A 1 7,822,054 N/A 1 Textbooks (Split funded - See Lottery section) Funded in Lottery in FY ,197 85,170 Vocational Education 670, , , ,157 Gifted Education 205, , , ,918 Special Education 1,945,451 1,198,966 1,945,451 1,198,966 Prevention, Intervention, & Remediation 657, , , ,056 VRS Retirement (Includes RHCC) 2,392,379 1,474,404 2,326,654 1,433,899 Social Security 1,178, ,401 1,178, ,401 Group Life 74,488 45,906 74,488 45,906 Remedial Summer School (Split funded - See Lottery section below) 18,830 N/A 1 144,037 N/A 1 Subtotal - SOQ Accounts 33,342,625 15,874,998 33,625,207 15,813,514

22 INCENTIVE PROGRAMS Washington County Virginia Schools State and Local Incentive Program Funding FY15 and FY Composite Index FY 2015 State FY 2015 Local FY 2016 State FY 2016 Local Compensation Supplement Not Funded in FY , ,613 Academic Year Governor's School 549,685 N/A 612,326 N/A Breakfast After the Bell Initiative/ Expand Existing School Breakfast Program Not Funded in FY ,090 N/A Math/Reading Instructional Specialists Early Reading Specialists Initiative Technology - VPSA 466,000 88, ,000 88,000 Subtotal - Incentive Accounts 1,015,685 88,000 1,404, ,613

23 CATEGORICAL PROGRAMS Washington County Virginia Schools State and Local Categorical Program Funding FY15 and FY Composite Index FY 2015 State FY 2015 Local FY 2016 State FY 2016 Local Adult Education 43,920 N/A 43,920 N/A 1 School Lunch 37,755 N/A 37,755 N/A 1 Special Education - Homebound 60,099 N/A 61,301 N/A 1 Special Education - State-Operated Programs 0 N/A 0 N/A 1 Special Education - Jails 1,475 N/A 1,465 N/A 1 Subtotal - Categorical Accounts 143, ,441 0

24 Key Federal Revenue Programs Derived from specific US Dept. of Education grants Title I Provides assistance to schools with high concentration of students from families that live in poverty in order to help improve teaching/learning from students most at risk of failing. IDEA Individuals with Disabilities Act Helps ensure that children with disabilities have access to public education to meet each child s unique needs and prepare him or her for further education, employment and independent living.

25 FEDERAL REVENUES Title I, Part A, Improving Basic Programs Operated by Local Educational Agencies; Title I, Part C, Education of Migratory Children; Title I, Part D, Prevention and Intervention Programs for Children and Youth Who Are Neglected, Delinquent, or At-Risk; Title II, Part A, Preparing, Training, and Recruiting High Quality Teachers and Principals; Title II, Part D, Enhancing Education Through Technology; Title III, Part A, Language Instruction for Limited English Proficient and Immigrant Students; Title IV, Part A, Safe and Drug-Free Schools and Communities Act; and Title VI, Part B, Subpart 2, Rural and Low-Income School Program.

26 26 Federal Revenue Deduct Deduct 29% of certain federal revenues 2004 Session: Facing re-benchmarking costs of $1.2 billion, Governor Warner proposed re-instating the local revenue deduct (which had been ended the previous biennium by the General Assembly per a recommendation of the JLARC report) as well as creating a new adjustment known as the federal revenue deduct for a total biennial cost savings of over $400 million. Rationale: Exclude from the SOQ cost base those expenditures supported by certain local (i.e. rent, rebates, sales of equipment) or certain federal revenues (No Child Left Behind Economically Disadvantaged Title I, Professional Development, Special Education, Career and Technical Education, and Education Technology). Methodology: Since expenditures are in fact not identifiable by fund source, the proposed deduction was instead based on the amount of revenues. The General Assembly instead restored the funding to end the local revenue deduct and limited the federal revenue deduct to 29%, based on the average percent of costs which are attributable to support costs. In recognition of the fact that the federal funds may be used for purposes other than those which comprise the SOQ cost base (i.e. additional teachers) and, In order to limit the disproportionate impact on those school divisions with high percentages of students in poverty.