1. Equalization Aid – Behind the Scenes Brent Richter, Director of Business Services, Lodi School District Karen Kucharz Robbe, Finance Consultant, School Financial Services Team, DPI

2. Greater Understanding of the Equalization Aid Formula Components That Affect the Amount of Your Aid Negative Tertiary Aid and What You Can Do About It (!) 2

3. A.July 1 2018-15 General Aid Certification - Abbotsford School District - District-Specific B.Longitudinal Equalization Aid - Linn J6 - Bayfield - Sun Prairie - Appleton - District-Specific C. Power Point Slides

4. Positive Primary Aid Positive Secondary Aid Positive Tertiary Aid District Value per Member Negative Tertiary Aid Negative Secondary Aid No Equalization Aid Equalization Aid Review from August 14, 2014 Presentation

5. 3 District Factors Wealth (Property Tax Base) Number of Students to Educate (Membership) Shared Cost (Revenues and Expenditures)

6. General Fund (10) Debt Service Funds (38 & 39) Capital Projects Fund (41) (only certain aidable expenditures as determined by DPI) Plus, a few extra items. Equal Aid calc uses prior-year data, so any significant changes in your expense/revenue pattern will take 1 year to have an effect on Shared Cost/Equalization Aid.

7. Expenditures that are funded by Taxes (Source 210), Computer Aid (Source 691), General Aid (Source 620), or Fund Balance. ExpendituresRevenues  Revenues Removed – i.e. Deducted

8. (not an exhaustive list) All State and Federal Grant Revenues Tuition Revenue Earnings on Investments Gate Receipts Fees & Fines Federal and State Aid Transits E-Rate Refunds Fund 10 Deductible Receipts Deductible receipts are deducted from total expenditures as part of the process to get to shared cost.

9. Taxes-Src 210 (includes levy 211, chargebacks 212, mobile home fees 213, TIF closeouts 219) Computer Aid-Src 691 General State Aid-Src 620 (includes High Poverty Aid) Property Tax and Equalization Aid Refund-Src 972 Impact Aid Non-Deductible (DPI-computed amount) Reorganization Settlement-Src 850 Long Term Operational Borrowing-Src 873, 874 Fund 10 Non-Deductible Receipts Expenditures made from the following revenue sources ARE in shared cost:

13. Refinancing is Shared Cost-Neutral.

14. Positive Primary Aid Positive Secondary Aid Positive Tertiary Aid District Value per Member Negative Tertiary Aid Negative Secondary Aid No Equalization Aid Equalization Aid

15. Expenditures Revenues D N DN D

16. $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 #1: Revenues remain unchanged. Expenses are increased. D D N DN D S h a r e d C o s t

17. $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 All revenues unchanged. Expenses increased. Shared cost increases. DD N DN D SharedCostSharedCost

18. $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 2 Scenario #2: Add tuition revenue (deductible receipt). Expenses unchanged. D D N DN D S h a r e d C o s t

19. $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 Added tuition revenue (deductible receipts). Expenses unchanged. Shared cost is reduced. D D N DN D SharedCostSharedCost

20. $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 Scenario #3: Add tuition revenue. Add equal expense. D D N DN D S h a r e d C o s t

21. $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 Added tuition revenue, expenditures increased by equal amount. No change in shared cost. D D N DN D S h a r e d C o s t

22. $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 Scenario #4: New High Poverty Aid (or any other non-deductible). Don’t add any expense. D D N DN D S h a r e d C o s t

23. $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 Added High Poverty Aid, deductible receipts unchanged. Expenses unchanged. No shared cost change. D D N DN D S h a r e d C o s t

24. $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 Scenario #5: New High Poverty Aid (any non-deductible), expenditures increased by equal amount. D D N DN D S h a r e d C o s t

25. $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 Added High Poverty Aid revenue (or another non-deductible), deductible receipts unchanged. Expenses increased. Increase in shared cost. D D N DN D S h a r e d C o s t

26. Revenues No Change Deductible Receipts Non-Deductible Receipts Expenditures No Change Increase/ Decrease ------  Incr Exp - Increase Shared Cost  Decr Exp - Decrease Shared Cost  Increase Reduce Shared Cost  Decrease Increase Shared Cost  Chng in Revs = Chng in Exp No Effect  Chng in Revs > Chng in Exp Reduce Shared Cost  Chng in Revs < Chng in Exp Increases Shared Cost  Increase No Effect  Decrease No Effect  Chng in Revs = Chng in Exp SC Change = Exp Change  Chng in Revs > Chng in Exp SC Change = Exp Change  Chng in Revs < Chng in Exp SC Change = Exp Change All other things remaining equal.

27. 3 State Factors Cost Ceilings Guaranteed Property Valuations Per Member Amount of Money to Distribute

28. Positive Primary Aid Positive Secondary Aid Positive Tertiary Aid District Value per Member Negative Tertiary Aid Negative Secondary Aid No Equalization Aid Equalization Aid

29. “Multi-Year Longitudinal Analysis of General and Equalization Aid Formula Components” http://sfs.dpi.wi.gov/sfs_buddev_eq Location: SFS Homepage > Longitudinal Data > Equalization Aid

33. Positive Primary Aid Positive Secondary Aid Positive Tertiary Aid District Value per Member Negative Tertiary Aid Negative Secondary Aid No Equalization Aid Equalization Aid

35. Knowing your district’s specific profile and where you are headed in the aid formula will help you better explain how changes in local finances might affect your state aid. What if we underspend our budget? How does that affect our aid? If we go to referendum, how will our aid change?

36. “2014-15 Equalization Aid Worksheet” Location: SFS Homepage > Worksheets > DPI Executable http://sfs.dpi.wi.gov/sfs_workexe

37. 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.

38. Bruce Anderson, Consultant608-267-9707 Carey Bradley, Consultant608-267-3752 Dan Bush, Consultant608-267-9212 Karen Kucharz Robbe, Consultant608-266-3464 Gene Fornecker, Auditor608-267-7882 Michele Gundrum, Auditor608-267-9218 Brian Kahl, Auditor608-266-3862 Vacant, Assistant Director608-267-9209 Bob Soldner, Director608-266-6968 Email: dpifin@dpi.wi.govdpifin@dpi.wi.gov Phone: (608) 267-9114 Fax:(608) 266-2840