Presentation on theme: "Legislative Services Agency"— Presentation transcript:
1 Legislative Services Agency Overview of School Finance in IowaLSA contacts:Shawn SnyderDwayne Ferguson
2 Brief History of School Finance in Iowa In ,652 school DistrictsReorganization Plan adopted in 1950’s1965 – 1,098 school districts1975 – 450 school districts1985 – 437 school districts1995 – 384 school districts2005 – 367 school districtsCurrently school districts
3 Brief History of School Finance in Iowa Until the mid 1960’s – school district funding was all property tax.In 1971, a school foundation program adopted (enrollment based) – substantial increase in State aid to school districts.In 1989 – enactment of Chapter 257, Code of Iowa. Implementation beginning in FY 1992.
4 Brief History of School Finance in Iowa In 1992, allowable growth adopted.In 1995, modified so that the allowable growth set 2 years in advance.In 1996, increased Regular Program Foundation Level from 83.0% to 87.5% beginning in FY 1997 (increased the proportion of State aid and provided property tax relief).In 1999, Special Education Foundation Level increased from 79.0% to 87.5% beginning in FY 2000.
5 Brief History of School Finance in Iowa In 2001, eliminated the 100.0% budget guarantee and replaced it with phase-out or alternate budget adjustment to begin in FY Made permanent on-time funding provision.In 2006, created additional property tax adjustment aid to “buy down” additional levy rates for qualifying school districts that have the highest tax rates.
6 Brief History of School Finance in Iowa 2008 Legislative Session:State Sales/Use Tax for school infrastructure – excess funds after school infrastructure allocations will be used for property tax relief through school aid formula.State Categoricals – Additional categorical program funding rolled-into the school aid formula beginning in FY 2010.
7 School District Finance Overview Revenue SourcesFormula (State Aid and Property Tax)State Categorical FundingMiscellaneous SourcesBudgets/ExpendituresGeneral FundPhysical Plant and Equipment FundManagement FundOther Funds
8 School District Finance Components Combined District Cost (formula) Regular, Guarantee, Supplementary Weighting, Special Education, AEAsInstructional SupportManagement LevyPhysical Plant & Equipment LevyPublic Education and Recreation LevyDebt Service LevyState Sales/Use Tax for School InfrastructureState/Federal Categoricals
9 School District Finance Components (FY 2009) Combined District Cost: $3,385.9 millionInstructional Support: $181.3 millionManagement Levy: $105.6 millionPPEL: $125.9 millionPERL: $1.9 millionDebt Service Levy: $112.2 millionSales/Use Tax (SILO): $375.0 millionCategoricals: $333.7 million
10 School Finance Formula Goals Equalize educational opportunityPromote high achievementProvide property tax reliefEqualize taxationEstablish maximum spending controlPredictableSimplePupil DrivenProvide for local discretionProvide adequate funding
11 Combined District Cost Regular Program Cost+ Budget Guarantee (Budget Adjustment)+ Weighted Enrollment Funding+ AEA Program Funding+ State Categoricals (New in FY 2010)+ Modified Allowable Growth FundingCombined District Cost
12 Regular Program District Cost District Cost Per PupilX Number of PupilsRegular Program District Cost(Basic “pool” of money for the district)
13 District Cost Per Pupil – FY 2009 $5,721 – Highest (8 Districts)$5,546 – Lowest (176 Districts)$175 – RangeDistrict Cost Per Pupil Increases Each Year by a Per Pupil Amount (Per Pupil Allowable Growth)Minimum District Cost Per Pupil = State Cost Per Pupil
14 Allowable Growth Rate Recommended by the Governor Established by the Legislature within 30 days of the Governor’s budget recommendation.Set 18 months in advance – 2009 Legislature will set the allowable growth rate for FY 2011.
15 Allowable Growth Amount Allowable Growth Rate x State Cost Per Pupil = Growth Per PupilFor example:4% Allowable Growth Rate XFY 2008 State Cost Per Pupil ($5,333)= $213 Per Pupil
16 State Cost Per Pupil (SCPP) FY 2009:$5,333 + $213 = $5,546FY 2009 SCPP = $5,546Used to Determine Allowable Growth Per Pupil for the Next YearUsed to Determine Minimum District Cost
18 Basic FundingPupil Driven System (Pupils x Cost Per Pupil = Regular Program Budget)Pupil CountPupils WeightedSpecial EducationEnglish Language LearnersSharingAt-Risk FormulaReorganization IncentivesAdministration Functions SharingBudget Adjustment
19 Weighted Enrollment Funding Pupil Driven SystemWeightingsProvide Funding to Cover Additional CostSpecial EducationEnglish Language LearnersShared Teachers/Students/Regional AcademiesAt-Risk StudentsProvide IncentivesIowa Communications Network (ICN) SharingWhole Grade Sharing/ReorganizationShared Administration Functions (new for FY 2009)
23 Budget Adjustment (Previously Called Budget Guarantee) Regular Program Budget = Pupils x District CostProvides an adjustment in the Regular Program Budget for districts with no or low growth in enrollmentsPhase-out began in FY 2005Scale Down Version101% Adjustment
24 Budget Adjustment FY 2009 Total B.A. $12.1 Million (155 districts) Scale Down (50% Based on FY 2004)$4.8 million (64 districts)101% Adjustment (101% Based on Previous Year)$7.3 million (91 districts)
26 Area Education Agency (AEA) Program Funding Funding through the Combined District CostAEA Funding - $173.4 millionPupil DrivenFlows Through Local DistrictSpecial Education Support Services - $123.9 millionMedia Services - $23.4 millionEducational Services - $25.9 millionAEA Sharing (New in FY 2009) - $220,000State Categoricals (New in FY 2010)
27 School Budget Review Committee Funding Five Member CommitteeAuthority to Grant Budget IncreasesModified Allowable Growth (Property Taxes)Unique and Unusual Circumstances“Manage” FormulaSpecial Education WeightsCash ReserveNegative Unspent BalancesGrants Budget Authority
28 School District Revenues Where do the revenues come from?General FundFormulaRequiredDiscretionaryMiscellaneous IncomeState categoricalsFederal categoricalsNon General Fund/Other
29 Revenue - Foundation Formula Where do the revenues come from?Required Local Levy - Uniform LevyState AidAdditional LevyProperty Tax Equity Relief (PTER) Fund (New in FY 2011)
30 State Aid Increase Funding for Districts “Fair” Method to Distribute State AidProvide Property Tax ReliefEqualize Effort
31 Foundation Formula Foundation Level FY 2009: Additional LevyFoundation LevelFY 2009:87.5% of State Cost ($5,546) = $4,853 Per PupilState AidUniform Levy$5.40 Per$1000 Valuation
32 Foundation Formula Property Rich District Property Poor District Foundation LevelFoundation LevelAdditional LevyAdditional LevyState AidState AidUniform Levy$5.40Uniform Levy$5.40
33 Foundation Formula Special Education AEA Special Regular Program InstructionEducation SupportAdditional LevyAdditional LevyAdditional Levy87.50%Foundation79%LevelFoundationState AidLevelState AidState AidUniform Levy
34 Foundation Formula (FY 2009) AEA SpecialRegular ProgramSpecial EducationInstructionEducation SupportAdditional LevyAdditional LevyAdditional Levy$ million$47.3 million$27.1 millionState AidState AidState Aid$1,757.3 million$ million$105.6 million*Uniform Levy$617.7 million*Does not include the state aid reduction of $10.0 million
35 Revenue - Foundation Formula FY 2009Uniform Levy = $617.7 millionState Aid = $2,224.4 millionAdditional Levy (Second Effort) = $561.0 million
36 Additional Levy – Property Tax Adjustment Aid FY $18.0 million appropriated to buy down ratesFY $24.0 million appropriatedFY 2011 and beyond - $24.0 million plus PTER funds
37 Property Tax Adjustment Aid Appropriation of FY 2009 $18.0 million for FY 2009 “buys” 65 districts down to a rate of $4.14/$1,000 of valuation.
38 Sidebar – PTER FundStarting in FY 2009: Statewide 1% sales/use tax used to fund SILO with remaining going to PTER.Funds generated in FY 2009 for PTER will be used for FY 2011 school aid property tax relief for property tax adjustment aid.Any remaining PTER funds will be used to increase the foundation level.
40 Discretionary- General Fund Instructional Support ProgramUp to 10.0% of the Regular Program BudgetBoard Approved for Five YearsVoter Approved for Ten YearsFY 2009:339 Districts $181.3 millionState Aid - ($14.4 million [Frozen])Property Tax - ($90.7 million)Income Surtax - ($76.2 million)$46.2 million Additional State Aid to “Fully” Fund
41 State Categorical Funding for FY 2009 Educational Excellence (Phase I, II) - $55.5 millionStudent Achievement/Teacher Quality - $248.9 millionTeacher Compensation - $210.0 millionProfessional Development - $28.5 millionOther Programs - $10.4 millionEarly Intervention/Class Size Reduction - $29.3 million
43 State Categorical Roll-in (FY 2010) Beginning in FY 2010 following categorical items will be funded on a per pupil basis with an allowable growth rate established annually beginning in FY 2011:Educational Excellence and SATQ Teacher Comp = Teacher Salary Supplement ($250.9 million)SATQ Professional Development = Professional Development Supplement ($28.5 million)Early Intervention/Class Size Reduction Supplement ($29.3 million)
44 Federal Categorical - Examples FY 2008:Title I - $63.3 millionTitle II - $20.6 millionIndividuals with Disablilities Education ACT (IDEA) - $26.4 million
45 Non General Fund Revenue Sources: Management Levy: $105.0 Mill. (357 districts)PPEL: $125.8 Mill. (336 districts)Public Education and Recreational Levy (PERL): $2.0 Mill. (18 districts)Debt Levy: $112.1 Mill. (207 districts)State Sales/Use Tax for School Infrastructure: $375 Mill. (All districts)
46 Sales/Use Tax for School Infrastructure Statewide Sales/Use Tax for School Infrastructure enacted in 2008.Funding is based on a per pupil distribution and is linked to the School Infrastructure Local Option (SILO) sales tax distribution formula.By FY 2014, all districts will receive the same per pupil amount.Any excess will be used for Property tax relief through the school aid formula.
48 State Public School Funding State General Fund Appropriations forPublic Schools:FY 2007 – $2.302 billion (42.7% of State General Fund expenditures)Estimated FY $2.487 billion (42.4%)Estimated FY $2.643 billion (43.1%)
49 Recent Issues Recent Issues Subject of Legislation: Equalization of Per Pupil SpendingEnrollment Changes (Declines/Increases)Transportation CostsProperty Tax Relief/Property Tax EqualizationTechnologySchool InfrastructureTeacher CompensationCurriculumSchool District Fees