school finance and small schools how current law impacts small schools in texas presented by the...

School Finance and Small Schools

How current law impacts small schools in Texas

Presented by the Texas Association of Rural Schools

Texas Association of Rural Schools 2

Basic terms you will need to know ADA (Average Daily Attendance)

The number of students in attendance on average each day of the school year

BA (Basic Allotment) Amount the state sets for the basic program costs for a

“regular” child The BA is adjusted to account for the higher cost for

districts in certain areas (CEI) ABA (Adjusted Basic Allotment)

The ABA is adjusted by the small and mid-size district adjustments

AA (Adjusted Allotment) The amount the state uses to calculate each district’s

revenue


Chapter 42.103 Small Schools Formulas At least 300 square miles

AA = (1+((1,600-ADA) x .0004)) x (ABA) Less than 300 square miles

AA = (1+((1,600-ADA) x .00025)) x (ABA)


Small Schools Formula’s Impact In our example, let’s assume

400 ADA Less than 300 square miles


Example 1AA = 1+((1600-ADA) x .00025) x ABA

AA = 1+((1600-400) x .00025) x ABA

AA = 1+(1200) x .00025) x ABA

AA = 1+(.30) x ABA

AA = 1.30 x ABA


A school with 400 ADA and less than 300 sq. miles gets a 30% increase in weights for all students


Example 2AA = 1+((1600-ADA) x .0004) x ABA

AA = 1+((1600-400) x .0004) x ABA

AA = 1+(1200) x .0004) x ABA

AA = 1+(.48) x ABA

AA = 1.48 x ABA


A school with 400 ADA and at least 300 sq. miles gets a 48% increase in weights for all students


An increase of 30% or 48% is truly significant for small

schools regardless of wealth.


This is the life-blood of

rural education in Texas


Chapter 42.104—Requires use of AA in determining Special Allotments The Adjusted Allotment—which includes

the impact of the small schools formula—is used in calculating five special allotments Special Education Career and Technology (Vocational Education) Compensatory Education Bilingual/ESL Education Gifted and Talented


Importance of using AA in calculating special allotments TEA originally tried to use ABA instead of

AA in the calculation of these five special allotments

This would have resulted in a significant DECREASE in funding in ALL special programs…

…and would have ignored the extra cost to small districts

We must always maintain vigilance to protect the articles we fought for.


Chapter 42.105—Sparsity Adjustment for very small schools HB 1126 in 1975 session

Intent was to guarantee at least one teacher for each grade taught

HB 72 in 1984 special session Switched to a pupil-centered approach to

finance that guaranteed credit of 10 ADA per grade

Same effect—one teacher for each grade


How the sparsity adjustment works First example—K-12 district

Credited with 130 ADA…if Have at least 90 ADA in current or preceding

school year…or Is 30 miles from the nearest neighboring high

school


How the sparsity adjustment works First example—K-12 district



school


How the sparsity adjustment works Second example—K-8 district



school


How the sparsity adjustment works Final example—K-6 district



school


Chapter 42.106—Adjusted Property Value for Districts Not Offering All Grade Levels K-6 and K-8 districts send their secondary

students to neighboring high schools The loss of the “count” of these students

increases the sending school’s wealth Decreases state funding Increases recapture for wealthy districts

But, these receiving districts often charge tuition Sending school retains costs

Purpose—Recognizes this tuition cost by adjusting property value of the sending district


The formula…

ADPV = DPV – (TN/.015)

where: ADPV is the district’s adjusted taxable value DPV is the district’s actual property value before

adjustments TN is the total tuition paid


The TN/.015 is the taxable value necessary to pay the tuition. By reducing the district’s value by this amount, state revenue goes up (or recapture goes down) by an amount necessary to pay the tuition.


An Example of How it WorksLet’s assume our district in this example

…has a property value of $20 million and…pays a tuition of $500 for each 30 pupils

$500 x 30 students = $15,000 tuition paid


An Example of How it Works

ADPV = DPV – (TN/.015)

ADPV = $20,000,000 – ($15,000/.015)

ADPV = $20,000,000 – ($1,000,000)

ADPV = $19,000,000

This represents a recovery of 5% of the total tax roll of this district.


An Example of How it WorksADPV = DPV – (TN/.015)

ADPV = $20,000,000 – ($15,000/.015)ADPV = $20,000,000 – ($1,000,000)ADPV = $19,000,000

This represents a recovery of 5% of the total tax roll of this district.

$30,000

$2,000,000

$18,000,00010%


Chapter 41.21—Wealth per Student in Certain Districts Not Serving All Grades Expires 9/1/2004, but is a current hold-

harmless based on 1999-2000 local and state revenue for wealthy districts

In 1999-2000, Chapter 41 districts were allowed to retain the ADA of students begin taught in a neighboring district.

This was allowed regardless of whether tuition was charged


Chapter 46.003—School Facilities AllotmentFYA = (FYL x ADA x BTR x 100) – (BTR x DPV/100))

Not less than 400


Chapter 46.005—Limitation on Amount of Facilities Allotment Greater of:

$100,000; or ADA times $250

Impact: 400 ADA x $250 = $100,000


Chapter 46.010 Projects by More Than One District Two or more districts may “co-op” to build

a shared facility at a single location Each district is entitled to a 20% higher

amount than otherwise entitled to under Ch. 46.005

Purpose: Encourage efficiencies by sharing new construction without having to consolidate districts


Defending what we have fought for Each of these provisions is a reflection of a

specific need unique to small schools These needs have not gone away. If anything, with the new, increased

demands, they are greater now than ever before


Summary Small Schools Adjustments

Recognizes small classes and a need for more teachers Use of small schools adjustments to calculate special

allotments Diseconomy of scale extends into special programs

Sparsity Allotment Ensures revenue for minimum staffing

Adjustment for tuition paid by K-6 and K-8 districts Recognizes actual expenses incurred by these districts in

educating their students Facilities Adjustments

Minimum of 400 ADA to achieve $100,000 project Coop Incentive

Districts are allowed (even rewarded) to share new facility cost—without consolidating districts


Summary

Small Schools Adjustments Use of small schools adjustments to calculate

special allotments

Sparsity Allotment Adjustment for tuition paid by K-6 and K-8

districts

Facilities Adjustments

Coop Incentive

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