1. School Aid: 1 Legislative Services Agency 2006 Session Click to continue Press escape to exit Iowa School Foundation Aid Formula Overview Shawn Snyder Dwayne Ferguson Legislative Services Agency Fiscal Services Division

2. School Aid: 2 Legislative Services Agency 2006 Session Click to continue Press escape to exit School Foundation Aid Formula u The School Foundation Aid Formula funded 365 school districts and 12 area education agencies in FY 2006. u The goals of the formula include:  to equalize educational opportunity,  to provide a good education for all the children of Iowa,  to provide property tax relief,  to decrease the percentage of school costs paid from property taxes, and  to provide reasonable control of school costs.

3. School Aid: 3 Legislative Services Agency 2006 Session Click to continue Press escape to exit History of School Finance in Iowa In the 1950s, there were over 4,000 school districts in Iowa, so the General Assembly adopted a reorganization plan. The following summarizes the changes in the number of school districts beginning with FY 1965:  FY 1965 – 450 school districts  FY 1975 – 438 school districts  FY 1985 – 390 school districts  FY 1995 – 377 school districts  FY 1999 – 375 school districts  FY 2002 – 371 school districts  FY 2004 – 370 school districts  FY 2005 – 367 school districts  FY 2006 – 365 school districts  FY 2007 – 364 school districts

4. School Aid: 4 Legislative Services Agency 2006 Session Click to continue Press escape to exit History of School Finance in Iowa (Cont.) u The method of fully financing school districts through property tax remained in place until the mid-1960s. u In 1971, the first state foundation program was adopted and state aid to school districts was substantially increased. u In 1989, the finance plan was substantially modified with the enactment of Chapter 257, Code of Iowa. The new finance plan was implemented in FY 1992.

5. School Aid: 5 Legislative Services Agency 2006 Session Click to continue Press escape to exit u In 1992 and 1993, the finance plan was altered.  The enrollment decline cushion and the advances for increasing enrollments were eliminated.  The growth in state aid and budgets, known as allowable growth, was determined by legislation and not automatically by a formula. The eliminated formula for allowable growth had used variables of inflation and revenue growth. History of School Finance in Iowa (Cont.)

6. School Aid: 6 Legislative Services Agency 2006 Session Click to continue Press escape to exit  In the 1995 Legislative Session, General Assembly changed the law so that allowable growth is set two years in advance. The General Assembly is also required to set the allowable growth rate within 30 days of the submission of the Governor’s budget.  Under current law, the General Assembly will set allowable growth in the 2008 Legislative Session for FY 2010. History of School Finance in Iowa (Cont.)

7. School Aid: 7 Legislative Services Agency 2006 Session Click to continue Press escape to exit u The school foundation aid formula first determines how much each district will receive and then determines the State portion and the property tax portion. u Funding is basically on a per pupil basis. Additional weightings are added for higher cost students, such as, special education, English Language Learners, etc. u Iowa creates equity by setting the maximum that can be spent per pupil. Most states set a minimum. Those states then can encounter equity issues when the richer school districts spend more. u The Legislature determines the school districts budget by setting the Allowable Growth Rate. This is the percentage increase that is applied to the cost per pupil. In General

8. School Aid: 8 Legislative Services Agency 2006 Session Click to continue Press escape to exit General Concepts: Basic Calculations u Local school district funding is primarily determined by the number of students within the district and the district’s cost per pupil. u A district’s basic budget is calculated by multiplying a district cost per pupil amount times the weighted enrollment.

9. School Aid: 9 Legislative Services Agency 2006 Session Click to continue Press escape to exit General Concepts: Weighted Enrollment u Besides actual enrollment, enrollment is weighted to provide compensation for higher cost pupils or to provide incentives. u The weighted enrollment is based on the actual enrollment plus a weighting for special education and a supplemental weighting for sharing teachers, pupils, or administrators, for at-risk students, for students in an English as a Second Language Program, and for school districts that reorganize and consolidate.

10. School Aid: 10 Legislative Services Agency 2006 Session Click to continue Press escape to exit General Concepts: Weighted Enrollment (Cont.) u Example: A severely disabled student is counted as a 1.00 pupil for the regular program and receives an additional weighting of 2.74 pupils in special education. A moderately disabled student receives an additional weighting of 1.21 pupils, and the least disabled receives an additional weighting of 0.72 pupil. u The weighted enrollment for FY 2006 was 560,259. This included an actual enrollment of 483,335 which was taken in September 2004, plus a special education weighting of 70,150, plus a supplemental weighting of 6,774.

11. School Aid: 11 Legislative Services Agency 2006 Session Click to continue Press escape to exit General Concepts: Something not included - Transportation u Transportation costs are paid from the general operating budget. u Statewide 4.9% of the regular program budget goes to transportation. 28 school districts use less than 2.0% 28 school districts use less than 2.0% 30 school districts use more than 8.0% 30 school districts use more than 8.0% School districts less than 250 average 6.3% School districts less than 250 average 6.3% School districts over 7,500 average 2.4% School districts over 7,500 average 2.4%

12. School Aid: 12 Legislative Services Agency 2006 Session Click to continue Press escape to exit General Concepts: District Cost per Pupil u Initially, school districts identified their total operating costs. Those operating costs were divided by enrollment to get a district cost per pupil. u The average of all the district’s cost per pupil became the State cost per pupil. u After these calculations, a minimum and maximum were set for the district cost per pupil.  The minimum was the State cost per pupil.  The maximum was 110.0% of the State cost per pupil. Over time the maximum was reduced to 105.0%.

13. School Aid: 13 Legislative Services Agency 2006 Session Click to continue Press escape to exit General Concepts: State Cost per Pupil u In FY 2006 the State Cost per Pupil is $4,931. u The State cost per pupil, which is the basis for determining the foundation level and State aid, is increased each year by an allowable growth amount or allowable growth per year. u The State cost per pupil is also used as follows:  To calculate the annual allowable growth amount.  As the minimum district cost per pupil.  To calculate the maximum district cost per pupil.

14. School Aid: 14 Legislative Services Agency 2006 Session Click to continue Press escape to exit General Concepts : Allowable Growth u The allowable growth rate as set by the General Assembly is multiplied by the State cost per pupil to determine the allowable growth amount. u The allowable growth amount is added to each district’s per pupil cost.

15. School Aid: 15 Legislative Services Agency 2006 Session Click to continue Press escape to exit General Concepts: Allowable Growth (Cont.)

16. School Aid: 16 Legislative Services Agency 2006 Session Click to continue Press escape to exit Area Education Agencies

17. School Aid: 17 Legislative Services Agency 2006 Session Click to continue Press escape to exit General Concepts: Area Education Agencies Costs per Pupil u Area Education Agencies (AEA) are also funded on a per pupil basis. u The basic funding formula includes separate funding on a per pupil basis for each of the three service areas.  The media services and educational services cost per pupil are funded entirely from property taxes. The enrollment count includes pupils from approved non-public schools.  Special education support services cost per pupil is included in the State foundation plan to determine the mix of State aid and property taxes. u Each district includes the AEA cost per pupil when generating State aid and property taxes. The funds generated by each district flow through to the AEA.

18. School Aid: 18 Legislative Services Agency 2006 Session Click to continue Press escape to exit General Concepts: Combined District Cost u The combined district cost is the total funding a district receives from the School Foundation Aid Plan. Combined district cost funds:  Regular programming.  Special Education.  Supplemental weightings (English Language Learners, Shared students & teachers, At-Risk Program, Reorganization Incentives)  Area Education Agencies cost for special education support, media services, and educational services.  Dropout/Dropout Prevention Program (local decision funded with property taxes).  Regular program budget guarantee (supplement for districts with declining enrollments).

19. School Aid: 19 Legislative Services Agency 2006 Session Click to continue Press escape to exit u After the school’s budget is determined, the split between State Aid and property taxes is determined. The Foundation Level determines at what point State Aid stops and property taxes pay the remainder. u State Aid pays a portion of the costs of: Regular program Regular program Special education (both school and AEA) Special education (both school and AEA) Supplemental weightings Supplemental weightings u Property taxes pay entirely for: AEA media and educational services AEA media and educational services Dropout Prevention Programs Dropout Prevention Programs Amount the District Cost per Pupil exceeds the State Cost per Pupil Amount the District Cost per Pupil exceeds the State Cost per Pupil Budget Guarantee Budget Guarantee General Concepts: Foundation Level

20. School Aid: 20 Legislative Services Agency 2006 Session Click to continue Press escape to exit General Concepts: Foundation Level (Cont.) The foundation level is 87.5% of the State cost per pupil for the regular program and special education, and 79.0% AEA special education support. The specific State cost per pupil is applied to the weighted enrollment for that particular service.

21. School Aid: 21 Legislative Services Agency 2006 Session Click to continue Press escape to exit State Aid and Property Taxes u Uniform Levy - First component in building the budget. u The uniform levy is $5.40 per $1,000 of taxable valuation, and it is levied against the taxable property in the State.

22. School Aid: 22 Legislative Services Agency 2006 Session Click to continue Press escape to exit State Aid and Property Taxes u State Aid – Second component in building the budget. u State Aid pays the difference between the amount from the Uniform Levy and the Foundation Level. Foundation Level

23. School Aid: 23 Legislative Services Agency 2006 Session Click to continue Press escape to exit State Aid and Property Taxes u Additional Levy – Third component in building the budget. u The Additional Levy pays the remainder. The Additional Levy Rate is set at what ever percentage is needed to collect the revenues and varies by school district. Foundation Level

24. School Aid: 24 Legislative Services Agency 2006 Session Click to continue Press escape to exit State Aid and Property Taxes u School districts with a high taxable valuations per pupil (Property Rich) receive more money from the Uniform Levy than school districts with a lower taxable valuation (Property Poor). High Low

25. School Aid: 25 Legislative Services Agency 2006 Session Click to continue Press escape to exit State Aid and Property Taxes u Districts with low taxable valuations per pupil will require higher Additional Levy rates to raise the same amount of revenue as a school district with high per pupil valuations. u Variance in school foundation property tax rates between districts is due, for the most part, to the additional levy. High RateLow Rate

26. School Aid: 26 Legislative Services Agency 2006 Session Click to continue Press escape to exit State Aid and Property Taxes Note:. The Uniform Levy includes adjustments for the Utility Replacement tax. Utility companies pay a tax on energy delivered in lieu of property taxes on their facilities.

27. School Aid: 27 Legislative Services Agency 2006 Session Click to continue Press escape to exit General Concepts: Example

28. School Aid: 28 Legislative Services Agency 2006 Session Click to continue Press escape to exit General Concepts: Spending Authority u Iowa is unique in that maximum spending authority is controlled in each district through the foundation plan. u The maximum spending authority or controlled budget includes the State aid and property taxes as calculated by the foundation formula, plus unspent balances from the prior year, plus actual miscellaneous income. u Once spending authority has been granted, it is not removed even if the authorized state aid or property taxes are not actually received.

29. School Aid: 29 Legislative Services Agency 2006 Session Click to continue Press escape to exit Issues: Kinds of questions that confront legislators. u What situation are we facing – demographics, economic, political, social? u What do we need to accomplish? (Often what do we need to fix?) u How much will we pay for it? u Where will the funding come from? u Who will it help? Who will it hurt? Are there winners and losers? u How will the people back home see this?

30. School Aid: 30 Legislative Services Agency 2006 Session Click to continue Press escape to exit Issues: Enrollment Enrollments have declined over the past three decades by 163,614 students (25.3%).

31. School Aid: 31 Legislative Services Agency 2006 Session Click to continue Press escape to exit Issues: Enrollment

32. School Aid: 32 Legislative Services Agency 2006 Session Click to continue Press escape to exit Issues: Enrollment Decreasing (305) Growing (60)

33. School Aid: 33 Legislative Services Agency 2006 Session Click to continue Press escape to exit Issues: Enrollment

34. School Aid: 34 Legislative Services Agency 2006 Session Click to continue Press escape to exit Issues: Are all school districts equal? u Course Offerings u Teaching Assignments u Teacher Salaries

35. School Aid: 35 Legislative Services Agency 2006 Session Click to continue Press escape to exit Mathematics – State requirement is 6 units

36. School Aid: 36 Legislative Services Agency 2006 Session Click to continue Press escape to exit Science – State requirement is 5 units

37. School Aid: 37 Legislative Services Agency 2006 Session Click to continue Press escape to exit Foreign Language – State requirement is 4 units

38. School Aid: 38 Legislative Services Agency 2006 Session Click to continue Press escape to exit Teaching Assignments – Number of unique courses taught per teacher.

39. School Aid: 39 Legislative Services Agency 2006 Session Click to continue Press escape to exit Average teacher salaries have increased substantially, but still lag in smaller districts.

40. School Aid: 40 Legislative Services Agency 2006 Session Click to continue Press escape to exit What is the impact? u One Measure – College Readiness

41. School Aid: 41 Legislative Services Agency 2006 Session Click to continue Press escape to exit

42. School Aid: 42 Legislative Services Agency 2006 Session Click to continue Press escape to exit

43. School Aid: 43 Legislative Services Agency 2006 Session Click to continue Press escape to exit How do we pay for “it”? u Taxes: Property Property Income (Individual & Corporate) Income (Individual & Corporate) Sales and Use Sales and Use Specialty (Fuel, Cigarette &Tobacco, Beer & Liquor, Gambling, Insurance Premium) Specialty (Fuel, Cigarette &Tobacco, Beer & Liquor, Gambling, Insurance Premium) Surtaxes Surtaxes Fees Fees

44. School Aid: 44 Legislative Services Agency 2006 Session Click to continue Press escape to exit FY 2006 Property Taxes

45. School Aid: 45 Legislative Services Agency 2006 Session Click to continue Press escape to exit Issues: Variation in Foundation Property Tax Rates Minimum = $6.85Maximum = $15.22

46. School Aid: 46 Legislative Services Agency 2006 Session Click to continue Press escape to exit State Aid and Property Taxes u How can the disparity in foundation property tax rates be reduced? High RateLow Rate $5.40 / $1,000

47. School Aid: 47 Legislative Services Agency 2006 Session Click to continue Press escape to exit State Aid and Property Taxes u Raise the Foundation Level to 100.0% so the foundation property tax rate is $5.40 plus a small amount more for AEA’s, budget guarantee, and difference between State Cost per Pupil and District cost per Pupil. u Cost to the State General Fund = $402.0 million in FY 2007. 100% FL $5.40 / $1,000

48. School Aid: 48 Legislative Services Agency 2006 Session Click to continue Press escape to exit State Aid and Property Taxes u Where would the $402.0 million come from?  8.0% of total budget  14% of other budgets

49. School Aid: 49 Legislative Services Agency 2006 Session Click to continue Press escape to exit State Aid and Property Taxes u Raise both the Foundation Level and the Uniform Levy. u This creates winners and losers. Property Rich districts will have taxes increase while Property Poor districts have property tax decreases. $5.40 / $1,000 $3.80 / $1,000 $9.10 / $1,000 Small Additional Levy

50. School Aid: 50 Legislative Services Agency 2006 Session Click to continue Press escape to exit Property Tax Adjustment Aid u In general, replaced property tax with state aid for school districts with high property tax rates. u FY 2007 - $6.0 million impacting 29 school districts. u FY 2008 - $12.0 million impacting 50 school districts. u FY 2009 - $18.0 million. u FY 2010 and beyond - $24.0 million.

51. School Aid: 51 Legislative Services Agency 2006 Session Click to continue Press escape to exit Another approach to property tax relief – School Infrastructure Local Option (SILO) Sales Tax

52. School Aid: 52 Legislative Services Agency 2006 Session Click to continue Press escape to exit School Infrastructure Local Option (SILO) Sales Tax Sales Tax Review: u State sales tax = 5.0% (5 cents on a dollar) u SILO – one local option sales tax designated for school infrastructure or school district property tax relief = up to 1.0% (approved at the county level) u Local Option Sales Tax (LOST) – voted on at the county level and approved by each jurisdiction. Used for Local Govt. projects = up to 1.0%

53. School Aid: 53 Legislative Services Agency 2006 Session Click to continue Press escape to exit SILO Sales Tax u As of July 1, 2007 all counties (and school districts) have implemented (Johnson and Linn counties approved in Feb.). u Currently – certain counties keep their SILO dollars while others put into “SAVE Fund” for distribution to other counties. u Eventually – all counties will put into SAVE Fund for a state-wide per pupil distribution of $575. u Issue – under current law, SILO implementation is determined at the county level. If counties don’t reauthorize SILO, that money won’t be available for state-wide distribution (Polk County).

54. School Aid: 54 Legislative Services Agency 2006 Session Click to continue Press escape to exit SILO Sales Tax – FY 2006 u Louisa County – Lowest in state at $231 per pupil SILO within the county u SAVE Fund - $580,000 to bring Louisa to $469 (53 other counties at $469) u Dickinson = $1,116 in SILO Per Pupil (15 Other Counties over $575 – “Grandfathered in”) u 97 Counties implemented

55. School Aid: 55 Legislative Services Agency 2006 Session Click to continue Press escape to exit SILO Sales Tax – Upcoming Legislative Session u $575 per pupil amount – may change to a rolling average. u Implement state-wide: eliminates extension at county level (Polk county). u Use tax: Additional funding above the current SILO amount.

56. School Aid: 56 Legislative Services Agency 2006 Session Click to continue Press escape to exit Questions?

57. School Aid: 57 Legislative Services Agency 2006 Session Click to continue Press escape to exit

58. School Aid: 58 Legislative Services Agency 2006 Session Click to continue Press escape to exit Other School Finance Issues u Cash Reserve Levy  Districts may levy cash reserve property taxes to enable them to manage their cash flow.  The cash reserve does not increase spending authority or budget.  Cash reserve can be used if state aid is reduced or property taxes are not collected.

59. School Aid: 59 Legislative Services Agency 2006 Session Click to continue Press escape to exit Other School Finance Issues (Cont.)  School Budget Review Committee (SBRC) has broad authority relating specifically to local school district budgets to deal with unique and unusual circumstances which cannot be handled easily or timely through legislation. The SBRC:  Has budget and tax oversight responsibilities for school districts through administering the basic funding plan.  Can grant additional property taxes (also known as additional allowable growth) to districts with unique and unusual circumstances. The most frequent requests include:  New or ongoing unique educational programs.  Special education deficits.  Enrollment changes due to open enrollment.  Extraordinary enrollment increases.  Nonpublic enrollments impact.

60. School Aid: 60 Legislative Services Agency 2006 Session Click to continue Press escape to exit Funding Components u School Districts’ budgets consist of 20 funding components plus debt service retirement and the cash reserve levy. u The basic funding for schools is the “combined district cost” as calculated by the school foundation formula. The FY 2006 combined district cost was $3.013 billion with $1.964 billion from State aid and $1.049 billion from property taxes. u In addition, districts may elect to seek additional funds through a combination of other taxes and miscellaneous income. These are optional programs and levies that provide flexibility at the local level. u The next slide summarizes the funding components.

61. School Aid: 61 Legislative Services Agency 2006 Session Click to continue Press escape to exit Funding Components: Regular Program FY 2006 Funding:$2.395 billion Source of Funding:State Aid and Property Tax u Regular program district cost is district cost per pupil times budget enrollments. u For FY 2006, budget enrollments include the actual number of pupils in September 2004 plus an adjustment for home-schooled students.

62. School Aid: 62 Legislative Services Agency 2006 Session Click to continue Press escape to exit Funding Components: Regular Program Budget Guarantee FY 2006 Funding:$19.5 million Source of Funding:Property Taxes Number of Districts:176 u Eligible school districts are required to have school board approval to levy for the budget guarantee. For FY 2006, 178 school districts that were eligible to receive the regular program budget guarantee. Of these, 176 approved the 100.0% budget guarantee, and two school districts did not request it. In previous years, some school boards had levied for a portion of the budget guarantee.

63. School Aid: 63 Legislative Services Agency 2006 Session Click to continue Press escape to exit Funding Components: Supplementary Weightings FY 2006 Funding:$33.6 million Source of Funding:State Aid and Property Taxes Number of districts:367 u Supplemental funding is provided to districts involved in certain activities. u Funding is provided by adding additional pupils to the actual enrollment. This is called weighted enrollment. u Below is the number of pupils added to the total weighted enrollment for each supplemental activity.

64. School Aid: 64 Legislative Services Agency 2006 Session Click to continue Press escape to exit Funding Components: Special Education FY 2006 Funding:$347.8 million Source of Funding:State Aid and Property Taxes u Special education students are assigned a weight of 0.72, 1.21, or 2.74 in addition to the actual count of 1.0. u These weights are calculated to cover the excess cost of special education. u Below is the number of pupils added for each special education weighting for all districts.

65. School Aid: 65 Legislative Services Agency 2006 Session Click to continue Press escape to exit Funding Components: Area Education Agencies - Media, Educational Services and Special Education FY 2006 Funding:$145.7 million Source of Funding:State Aid and Property Taxes u Area Education Agencies (AEA) serve as intermediate service units to provide:  Special Education Support Services.  Media Services.  Educational Services. u The basic funding formula includes separate funding on a per pupil basis for each of the three service areas. The funding is generated by each school district and passed on to the AEA. u The media and education services program areas are funded entirely from property taxes. u State Foundation Aid for special education support services was reduced by $19.3 million for FY 2006.

66. School Aid: 66 Legislative Services Agency 2006 Session Click to continue Press escape to exit Funding Components: Drop-out Programs - SBRC FY 2006 Funding:$72.1 million Source of Funding:Property Taxes Number of Districts:281 u The School Budget Review Committee (SBRC) may grant additional property taxes (also called additional allowable growth) for drop-out and drop-out prevention programs. u Each program and budget is approved by the Department of Education. u Up to 75.0% of the budget may come from the additional property taxes. The remainder must be supported from the general operating fund of the district.

67. School Aid: 67 Legislative Services Agency 2006 Session Click to continue Press escape to exit Funding Components: Enrollment Adjustment FY 2006 Funding: $ -0.2 million Source of Funding:State Aid & Property Taxes Number of Districts:55 u School audits are required to include an audit of the certified enrollment. u If the enrollment is changed by the audit, the State aid and property tax portions are adjusted.

68. School Aid: 68 Legislative Services Agency 2006 Session Click to continue Press escape to exit Funding Components: Instructional Support Levy FY 2006 Funding: $151.3 million Source of Funding:State Aid, Property Taxes, and Income Surtaxes Number of Districts:328 u Districts have the option to increase their budgets by up to 10.0% of the regular program cost. u The money generated may be used for any general fund purpose. u The levy is available for a five-year period with District School Board action and ten years with a vote of the electorate. u The Board determines the mix of income surtaxes and property taxes. u State aid is provided to equalize the property taxes. The State aid amount was intended to be 25.0% of the amount generated. However, State aid has been frozen at the FY 1993 level ($14.8 million). In FY 2006, an additional $34.2 million would be needed to fully fund the Instructional Support Program.

69. School Aid: 69 Legislative Services Agency 2006 Session Click to continue Press escape to exit Funding Components: Educational Improvement Levy FY 2006 Funding: $0.5 million Source of Funding:Property Taxes and Income Surtaxes Number of Districts:4 u Maximum district cost per pupil was established at 110.0% of the State cost in FY 1992 and gradually reduced to 105.0% of the State cost. u Any district which was above 110.0% was allowed to establish an educational improvement levy to replace all, part, or generate more than they previously were receiving. u The levy will remain in place until the board or a referendum removes the levy.

70. School Aid: 70 Legislative Services Agency 2006 Session Click to continue Press escape to exit Funding Components: Physical Plant and Equipment Levy (PPEL) FY 2006 Funding: $108.4 million Source of Funding:Property Taxes and Income Surtax Number of Districts:335 Board Approved: u Up to $0.33 per $1,000 taxable valuation may be levied for physical plant and equipment by the School Board. u Revenue cannot be used for any other purpose not expressly authorized. u Some of the uses of the levy include:  Purchase and improvement of grounds.  Improvement of sites or major building repair.  Construction and purchase of schoolhouses or buildings.  Single unit of equipment or technology exceeding $1,500.  Energy conservation.  Transportation equipment.  Equipment purchases for recreational purposes.

71. School Aid: 71 Legislative Services Agency 2006 Session Click to continue Press escape to exit Funding Components: Physical Plant and Equipment Levy (Cont.) Voter Approved: u Up to $1.34 per $1,000 taxable valuation may be levied for physical plant and equipment with approval by a simple majority of voters. The voter-approved PPEL may be funded by a combination of property tax and income surtax of up to 20.0%. u The voter approved portion may be requested for up to ten years. u Voter-approved physical plant and equipment levy existing before FY 1998 had a maximum levy of $0.67 per $1,000 taxable valuation. They may increase the existing levy by a maximum of an additional $0.67 per $1,000 taxable valuation. This does not alter the initial levy’s timeline. u Uses of the levy are the same as the Board-approved levy.

72. School Aid: 72 Legislative Services Agency 2006 Session Click to continue Press escape to exit Funding Components: Management Levy FY 2006 Funding: $95.8 million Source of Funding:Property Taxes Number of Districts:375 u The management levy is a combination of what previously was defined as the insurance levy, unemployment levy, and early retirement levy. u Districts may levy to pay the cost of the following:  Liability insurance premiums.  Tort judgments against the district.  Self insurance Program.  Loss of Property.  Early Retirement incentives.  Continuation of health or medical insurance coverage.

73. School Aid: 73 Legislative Services Agency 2006 Session Click to continue Press escape to exit Funding Components: Educational and Recreational Tax (Playground) FY 2006 Funding: $1.8 million Source of Funding:Property Taxes Number of Districts:18 u With voter approval the board may levy up to 13.5 cents per $1,000 taxable valuation for the purchase of recreation places and playgrounds at public school buildings and grounds of the district. u The School Board may authorize the use of the funds for recreational programs and community education programs. u Once enacted, the levy remains in place until rescinded by the Board or voters.

74. School Aid: 74 Legislative Services Agency 2006 Session Click to continue Press escape to exit Funding Components: Bonds/Debt Service Retirement FY 2006 Funding: $98.0 million Source of Funding: Property taxes Number of Districts:230 u A local School Board may only issue bonds if 60.0% of the electorate approves. u The maximum bonded indebtedness is 5.0% of the district’s assessed valuation. u The maximum length of any bond is 20 years.

75. School Aid: 75 Legislative Services Agency 2006 Session Click to continue Press escape to exit Funding Components: Miscellaneous Income u Miscellaneous income is estimated to include $189.4 million from State categorical funding, $281.3 million from Federal, and $241.4 million of other miscellaneous income. u Phases I and II of the Educational Excellence Program and the Student Achievement/Teacher Quality appropriations account for the majority of the State categorical funding. u Other miscellaneous income includes miscellaneous tax, local revenue, tuition/transportation, and investment income.

76. School Aid: 76 Legislative Services Agency 2006 Session Click to continue Press escape to exit Funding Components: Cash Reserve Levy FY 2006 Funding: $97.9 million Source of Funding: Property taxes u Cash Reserve is not included on the FY 2006 Budget Detail. u Districts may levy cash reserve property taxes to enable them to manage their cash flow. u The Cash Reserve Levy does not increase spending authority or budget. u Cash reserve can be used if State aid is reduced or property taxes are not collected.