1. BEP FORMULA A “COUNTY’S-EYE” VIEW Cumberland County

2. BEP FORMULA CUMBERLAND COUNTY Unnecessarily Complex Formula – 45 Antiquated Components Most Sub Formulas unchanged in 22 years Many Inadequate for 21 st Century Transfer Rules – 2 Fiscal Capacity Indexes (County’s Ability to Pay) Highly complex formulas in themselves Unclear rationale Application of each unclear 10/27/2014Carmin E. Lynch2

3. BEP FORMULA CUMBERLAND COUNTY Many Components Inadequate for 21 st Century - Examples – Health Insurance Only funded for 10 months of the year – School nurses based on one per 3,000 Students – Technology Coordinators based on one per 6,400 Students – Substitute Teachers based on $61.75 per Student (??) – Art, Music, Physical Education only funded through Sixth Grade – Elementary School Vice Principals inadequate for SACS Accreditation – High School Vice Principals inconsistent calculations – Custodial, Maint. & Operations, and Capital based on State calculated Square Feet 10/27/2014Carmin E. Lynch3

4. BEP FORMULA CUMBERLAND COUNTY Transfer Rules Complexities Three Major Categories – Nominal State Funding (Varies based on Fiscal Capacity Indices) Instructional Funding70% Classroom Funding75% Non-Classroom Funding50% Funding can be moved by LEA from Non Classroom to Classroom and/or Instructional Account Funding can be moved from Classroom Funding to Instructional Account Funding cannot be moved from Instructional to any other Category Distorts Local Contribution 10/27/2014Carmin E. Lynch4

5. BEP FORMULA Cumberland County Fiscal Capacity Indices (TACIR &CBER/Fox) Attempt to define how State & local Governments will share the costs computed by the BEP formula Weighted Average Application Highly Complex – TACIR considers county sales tax generation, property assessments, residential to farm assessments, per capita income, students to total population, based on multiple regression analysis – CBER considers county sales tax generation and property assessments weighted based on State Averages 10/27/2014Carmin E. Lynch5

6. BEP FORMULA CUMBERLAND COUNTY Comptroller Opinions – The BEP Formula does not adequately fund Public Schools. The BEP Formula does not include some components that research indicates could help achieve adequacy, nor fully fund others. John Morgan, Comptroller, July, 2003. – The BEP Formula is difficult to understand, non verifiable, and non transparent. Paraphrasing Winston Churchill, “it is an riddle, wrapped in a mystery, inside an enigma. Justin Wilson, Comptroller, March, 2011. 10/27/2014Carmin E. Lynch6

7. BEP FORMULA CUMBERLAND COUNTY EXPERT OPINION – School finance formulas often hold for two decades or more. It is likely that whatever Tennessee does it will be in place for two decades. Because of this, don’t just tinker with the plan or formula but plan on building a structure that will be relevant in 2034. …The one thing we know (about what schools will look like in 2034) is that there will be students, so design around the students. Marquerite Roza, Director, Edunomics Lab, Georgetown University, August, 2014. 10/27/2014Carmin E. Lynch7

8. BEP FORMULA CUMBERLAND COUNTY CONCLUSION – BEP Formula is 22 years old – Highly complex formulas – Difficult to understand – Poor relationship between funding, spending, outcomes – Formula is inadequate to provide a Basic Education Program – Managed at the highest levels instead of lowest levels – Entire Formula needs to be replaced 10/27/2014Carmin E. Lynch8