Funding Tier 1 – The Basic Educational Programs By David Del Bosque, Superintendent Avalon ISD September, 2010

A Shared Arrangement District Local Funding (property taxes) State Funding (sales taxes, business taxes ) Federal (smallest and usually program specific)

The Funding Tiers Two Tiers Fund Schools The Compressed Tax Rate funds Tier 1 Tier 1 Funds the basic educational program. Regular education, Special education, Compensatory education, Bilingual education, Career and Technology, Gifted and talented. Tier 2 The enrichment tier supplements the revenue in Tier 1. This presentation details only Tier 1 funding. Tier 2 will be dealt with separately in another presentation.

The Basic Allotment – not all starting points are equal Starting point is the Basic Allotment of $4,765 The Basic Allotment varies as it is tied to the M&O tax rate in 2005 If the M&O tax was at maximum $1.50 in 2005, the CTR would be $1.00 (1.50x.6677) and the BA $4,765 ($4,765x1.0) If the M&O tax was less than $1.50, the Basic Allotment is reduced proportionately. As an example, if the M&O tax rate was $1.43 in 2005, the CTR would be.9533 thus a lesser starting BA of $4,542 ($4,765x.9533)

The Basic Allotment – not all starting points are equal M&O in 2005 was $1.50 Compressed rate $1.00 = $1.50 *.6667 Basic Allotment $4,765 M&O in 2005 was $1.43 Compressed rate =1.43 *.6667 = Basic Allotment $4,526

Adjustment to the Basic Allotment Cost of Education Index (CEI) To adjust for geographic and cost differences, a CEI is assigned to each district. The CEI adjustment ranges from 1.02 to 1.20 and is applied to the Basic Allotment. It is now the ADJUSTED Basic Allotment. Small District Adjustment A small school adjustment is added to districts with ADA of 1600 or less. This adjustment is two tiered: one for small districts with less than 300 square miles and one for those with greater than 300 square miles - about a 10% difference. Midsize Adjustment Midsize Adjustment is for districts with more than 1600 but less than 5,000 ADA. The adjustment is roughly 8.5%.

Not All Adjusted Allotments Are Alike The BA Has Different Starting Points Even If Everyone Starts at $4,765. The BA is Based on the M&O Tax Rate of Basic Allotment starts at $4765 (if compressed tax rate is $1.00) Apply Cost of Education Index adjustment = Adjusted Basic Allotment Apply the Small or Midsize adjustment if applicable= Adjusted Allotment Basic Allotment may vary depending on CTR based on 2005 Tax rate. The reduction is proportionate. Apply Cost of Education Index adjustment = Adjusted Basic Allotment Apply the Small or Midsize adjustment if applicable= Adjusted Allotment The final adjusted allotment is the greater of 1)Adjusted Basic Allotment 2)Adjusted Basic Allotment increased for a small district 3)Adjusted Basic Allotment increased for a mid-size district

Example of the effect on the Basic Allotment and Adjusted Basic Allotment based on an M&O tax rate less than maximum of $1.50 in The Effects of a Compressed Tax Rate of Less Than $1.00 on the BA as a starting point District at Compressed rate of $1.00 District at Compressed rate < $1.00Basic Allotment ** Enter Compressed M&O rate ** Enter CEI ** Enter Regular ADA (not refined) $4, Basic Allotment$4,765 $4,542 This example illustrates the impact the 2005 M&O would have on this district. Apply Cost of Education Index1.09 Adjusted Basic Allotment$5,069 $4,833 Adjusted Allotment districts < 300 miles$6,774 $6,458 Adjusted Allottment w/o 300 mile penalty$7,797 $7,433

Small School Adjustment is two-tiered. Small districts of less than 1600, but less than 300 square miles, receive one adjustment. Small districts with more than 300 square miles receive a different adjustment that is higher. The Effects of a Compressed Tax Rate of Less Than $1.00 and the effect of the 300 mile penalty on the Adjustment Allotment that will be used to calculate Tier 1 funding. District at Compressed rate of $1.00 District at Compressed rate < $1.00Basic Allotment ** Enter Compressed M&O rate ** Enter CEI ** Enter Regular ADA (not refined) $4, Basic Allotment$4,765 $4,542 This example illustrates the impact the 2005 M&O would have on this district. Apply Cost of Education Index1.09 Adjusted Basic Allotment$5,069 $4,833 Adjusted Allotment districts < 300 miles$6,774 $6,458 Adjusted Allotment w/o 300 mile penalty$7,797 $7,433 The AA is the multiplier used to calculate Tier 1 funding.

Tier 1 Adjustments Resources and allowances, in the form of weights, are provided to provide for the individual needs of students. The AA is the multiplier. AA x # spec. ed. x 1.1 –5.0 AA x # spec. ed. x 1.1 –5.0 + AA x # career/tech x AA x # career/tech x AA x # regular x 1.0+ AA x # regular x AA x # bilingual x.10+ AA x # bilingual x.10 + AA x # comp ed x.20+ AA x # comp ed x.20 + AA x # pregnant x AA x # pregnant x AA x # gifted/talented x.12+ AA x # gifted/talented x.12 + AA x # PEG x.10+ AA x # PEG x.10 + Other Allotments+ Other Allotments High school student - $275 per ADAHigh school student - $275 per ADA Students at a new campus - $250 per ADAStudents at a new campus - $250 per ADA Students completing a virtual course - $400 eachStudents completing a virtual course - $400 each Students w/parent on active duty - $650 eachStudents w/parent on active duty - $650 each Staff Allotment - $500/Full time, $250/Part-timeStaff Allotment - $500/Full time, $250/Part-time Technology Allotment - $29.66 per ADATechnology Allotment - $29.66 per ADA Available School Fund - $262 per ADAAvailable School Fund - $262 per ADA Transportation Allotment - $ $1.43 per mileTransportation Allotment - $ $1.43 per mile = Tier 1 entitlement Entitlement =Adjusted Allotment (AA) x number of students in groups x weight

Small District Sample (less than 1600 and less than 300 square miles) of a district that was not taxing at the max of $1.50 in The 2005 M&O now proportionately reduces funding in the 2010 Tier 1 Funding. This an example of a district taxing $1.43 in Student Weights< ADA/FTE Regular Block$1,727,370 $1,646, Regular ADA (not refined) Bilingual$10,838 $10, Enter Bilingual ADA Comp Ed$291,011 $277, Enter # of Free/Reduced Pregnancy Related$10,611 $10, Enter PRS FTE GT$11,421 $10, Enter # of GT students Special Ed$198,004 $188, Enter Total Weighted SpEd FTEs Mainstream Special Ed$27,570 $26, Enter Mainstream SpEd ADA Career and Technology$118,701 $113, Enter CATE FTE Transportation$16,199 Enter transportation allottment High School Allotment$20, Enter ADA of grades 9-12 Effect of Compressed rate < $1.00 Tier 1 Rev.$2,432,652 $2,320,903 ($111,749) -4.59%

Small District (less than 1600 and greater than 300 sq. miles) affected by a M&O tax rate of less than $1.50 in 2005 and the effect of the 300 mile penalty. The loss is nearly 13%. Student Weights w/o 300 mile ADA/FTE Regular Block$1,988,235 $1,895,415255Regular ADA (not refined) Bilingual$12,475 $11, Enter Bilingual Refined ADA Comp Ed$334,959 $319, Enter # of Free/Reduced Pregnancy Related$12,214 $11, Enter PRS FTE GT$13,146 $12, Enter # of GT students Special Ed$227,906 $217, Enter Total Weighted SpEd FTEs Mainstream Special Ed$31,734 $30, Enter Mainstream SpEd ADA Career and Technology$136,627 $130, Enter CATE FTE Transportation$16,199 Enter transportation allottment High School Alottment$20, Enter ADA of grades 9-12 Effect of Compressed rate < $1.00 Tier I progams$2,794,421 $2,665,698($128,723)-4.61% 300 mile effect ($361,769) ($344,795) % %

A Shared Arrangement Revisited Determining the Local Share Local share = Compressed 2005 M&O Tax rate x the assigned taxable value /100 State Share = Total cost of Tier 1 – Local share

Does Money Matter? Most educators take the position that money does matter.The Hanusek Studies - claim no relationship Studied those who did make gains vs. those who did not and found no difference in that number…however

Does Money Matter? Hedges,Laine, and Greenwald Studies – find otherwise – money does matter Same data analyzed- differences in effect size rather than just number of positive and negative outcomes. These studies showed a significantly positive effect size. The effect size of those positive studies was significantly higher than the effect of the negative studies.

Does Money Matter? Kentucky Kentucky – Lawsuit by Council for Better Education found state’s system not meeting the standards set through their constitution. In response passed the Kentucky Education Reform Act Pre-KERA Kentucky ranked last in adult literacy and high school completion rates. Kentucky Supreme Court concluded, based on data presented during the case, a definite correlation existed between money spent and the quality of education received by students.

Does Money Matter? STAR Initiative in Kentucky STAR Initiative (Kentucky) – found that education resources for class-size reduction strongly correlated to student performance. Study found that kindergarten students in small classes were found to be three quarters of a month ahead of those in standard sized classes. 1 st graders were nearly two months ahead. By the end of 5 th grade, they were five months ahead

Does Money Matter? Third International Mathematics and Science Study Compared 8 th grade scores from nations with specific states, school districts and other school consortia. Found that students from more affluent school districts with low numbers of economically disadvantaged students did quite well and achieved scores similar to those in Hong Kong, Japan, and other top producing countries. Also found that schools that were funded poorly and served many poor students, while higher than most impoverished nations, scored similar to those countries that were low like Turkey, Jordan, and Iran.

Does Money Matter? Better Funded Schools Better funded schools can attract better-trained teachers.More experienced teachers with higher scores on competency exams. The ability to pay experienced, highly trained teachers seem to generate better test scores among their students.

Does Money Matter? Small Classes – Finn & Gerber/Finn Suriani/Biddle&Berliner Biddle and Berliner echo findings of the STAR Inititiative – Better funded schools are more able to afford smaller classes with additional teachers and facilities. Finn & Surani: found enrollment in small classes in early grades provides academic benefits in all subject areas. The advantages for minorities were greater and helped reduce the achievement gap. Finn & Gerber found that K-3 achievement and small class size for three or more years increased the chances of graduating from high school. This was especially true for students eligible for the free lunch program

Does Money Matter? School Ratings and Levels of Funding Hardwick’s Comparison: Compared the highest 100 Target Revenue districts with lowest 100 Target Revenue districts. Examined district ratings of “Exemplary”, “Recognized”, “Acceptable”, and “Unacceptable”. Findings suggest at the.05 level of confidence that highest Target Revenue districts had significantly higher ratings than those lowest Target Revenue districts.

Nearly 40% -50% of school districts in Texas are operating with a deficit budget this school year.Nearly 40% -50% of school districts in Texas are operating with a deficit budget this school year. Until the current public school finance system is revisited, reviewed and repaired, the inequities in the system will remain a detriment to the children of Texas.Until the current public school finance system is revisited, reviewed and repaired, the inequities in the system will remain a detriment to the children of Texas. Contact your state representatives and senators and tell them to fix these inequities for the benefit of every child.Contact your state representatives and senators and tell them to fix these inequities for the benefit of every child. Reflection

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