Download - School Finance and Small Schools
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
Texas Association of Rural Schools 3
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)
Texas Association of Rural Schools 4
Small Schools Formula’s Impact In our example, let’s assume
400 ADA Less than 300 square miles
Texas Association of Rural Schools 5
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
Texas Association of Rural Schools 6
A school with 400 ADA and less than 300 sq. miles gets a 30% increase in weights for all students
Texas Association of Rural Schools 7
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
Texas Association of Rural Schools 8
A school with 400 ADA and at least 300 sq. miles gets a 48% increase in weights for all students
Texas Association of Rural Schools 9
An increase of 30% or 48% is truly significant for small
schools regardless of wealth.
Texas Association of Rural Schools 10
This is the life-blood of
rural education in Texas
Texas Association of Rural Schools 11
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
Texas Association of Rural Schools 12
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.
Texas Association of Rural Schools 13
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
Texas Association of Rural Schools 14
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
Texas Association of Rural Schools 15
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
Texas Association of Rural Schools 16
How the sparsity adjustment works Second example—K-8 district
Credited with 75 ADA…if Have at least 50 ADA in current or preceding
school year…or Is 30 miles from the nearest neighboring high
school
Texas Association of Rural Schools 17
How the sparsity adjustment works Final example—K-6 district
Credited with 60 ADA…if Have at least 40 ADA in current or preceding
school year…or Is 30 miles from the nearest neighboring high
school
Texas Association of Rural Schools 18
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
Texas Association of Rural Schools 19
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
Texas Association of Rural Schools 20
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.
Texas Association of Rural Schools 21
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
Texas Association of Rural Schools 22
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.
Texas Association of Rural Schools 23
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%
Texas Association of Rural Schools 24
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
Texas Association of Rural Schools 25
Chapter 46.003—School Facilities AllotmentFYA = (FYL x ADA x BTR x 100) – (BTR x DPV/100))
Not less than 400
Texas Association of Rural Schools 26
Chapter 46.005—Limitation on Amount of Facilities Allotment Greater of:
$100,000; or ADA times $250
Impact: 400 ADA x $250 = $100,000
Texas Association of Rural Schools 27
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
Texas Association of Rural Schools 28
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
Texas Association of Rural Schools 29
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
Texas Association of Rural Schools 30
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