(HT) Funding Formula BAD HB 59 8-12-13-a

Final HB 59 FY 14-15 Biennial Budget

Final HB 59 FY 14-15 Biennial Budget

Basic K-12 Formula & Transportation

Colleen Grady, Education Policy Adviser, Ohio House Republican Caucus Barbara Shaner, Associate Executive Director, OASBO Michelle Francis, Deputy Director of Legislative Services, OSBA Tom Ash, Director of Governmental Relations, BASA

Amended Substitute HB 59

•

Governor introduced in February

•

House passed its version in April

• Senate voted to approve yet another version in June

• Conference Committee met to organize on June 18 and again on June 25 to finalize the agreed-to bill • Governor signed the legislation with 22 vetoes on June 30 (appropriations effective immediately, other provisions in 90 days)

New School Funding Formula

• Governor proposed funding formula • House made changes to original proposal • Senate made further adjustments • Conference Committee – compromise between the two versions • Final version • $830.8 million additional foundation formula funding and TPP Replacement over the biennium as compared to the FY 2012-13 biennium** • $607 million less than FY 2010-11 biennium** ** Comparisons provided by Dr. Howard Fleeter, Consultant for Education Tax Policy Institute using Ohio Legislative Service Commission data

Funding Formula Concerns

• Issues raised in House testimony • No base cost • Guarantee – number of districts, depth of guarantee, transportation, CTE, preschool not included • Catastrophic special education deduct • Distribution of funds – poor rural districts penalized • Talawanda districts • Transportation

Valuation Per Pupil Comparison FY 09 vs. FY14

Ohio Median Household Income 2007 - 2011

$54,000.00

$53,249.00

$52,000.00

$50,000.00

$49,027.00

$48,000.00

$48,107.00

$47,333.00

$46,000.00

$44,000.00

$44,648.00

$42,000.00

$40,000.00

Tax Year 2007 - 2011

Source: US Census Bureau

Opportunity Grant

•

Main funding component

• Funding provided on a per pupil basis

• Formula amount $5,745 FY14 and $5,800 FY15

• State share includes an income factor for districts with below average income

• Includes adjustment for districts with high percentage of exempt property (Talawanda adjustment)

Formula Amount x State Share Index x Formula ADM = opportunity grant per pupil

• Ranges from $287 to $5,170 per pupil

• Total FY14 - $4.79 billion, FY15 $4.84 billion

State Share Index

District Adjusted Valuation per pupil = District 3-year average valuation / FY 2014 ADM

Valuation per pupil index = District adjusted valuation per pupil / State adjusted valuation per pupil

Median income index = District Ohio adjusted gross median income for TY 2011 / Median of all districts' adjusted gross median incomes for TY 2011

If median income index < valuation per pupil index, then Wealth index = 1/3 x median income index + 2/3 x valuation per pupil index, else

Wealth index = Valuation per pupil index

If wealth index <= 0.35, then State share index = 90%; If wealth index > 0.35 and <= 0.9, then State share index = 50% + 40% x (0.9 – wealth index) / 0.55; If wealth index > 0.9 and < 1.8, then State share index = 5% + 45% x (1.8 – wealth index) / 0.9; If wealth index >= 1.8, then State share index = 5%

Targeted Assistance – Tier One

• Targeted Assistance provides additional resources for education opportunities above “basic” or Opportunity aid

• Funds targeted to the district with the 490 th lowest local wealth per-pupil • Threshold wealth per-pupil is the wealth per-pupil for this district • Districts with a local wealth per-pupil lower than the 490 th district eligible

Tier One Targeted Assistance Calculation:

= (Threshold wealth per-pupil – district’s local wealth per-pupil)

X Target millage (0.006)

X District’s wealth index

X District’s net* formula ADM

*Net formula ADM = formula ADM – 0.75 X community school students and

– virtual community school & voucher students

Targeted Assistance – Tier One

Local (District) Wealth Per-pupil** = 0.50 X (district 3-year average valuation / formula ADM) + 0.50 X (average of total adjusted gross income of district residents for the 3 most recent years / Formula ADM)

** The Threshold Local Wealth Per-pupil = this calculation for the 490 th lowest wealth district

Rank districts in order of Local Wealth Per-pupil from lowest to highest

Statewide Wealth Per-pupil = 0.50 X (3-year average valuations for all school districts / sum of formula ADM for all school districts) + 0.50 X (sum of 3-year average total federal adjusted gross income for all districts / sum of formula ADM for all school districts)

Wealth Index = Statewide Wealth Per-pupil / Local Wealth Per-pupil

See previous slide –

“ Tier One Targeted Assistance Calculation

”” for district total

Targeted Assistance – Tier Two

• Provided an additional $92 million in formula funding to rural districts

• Substantially reduced the total guarantee and extent to which some districts were on the guarantee

Tier Two Targeted Assistance

Agricultural value % = Three-year average agricultural valuation / Three- year average real property valuation

If agricultural value % >= 10%, then Tier two % = 40%; If agricultural value % < 10%, then Tier two % = Agricultural value % x 4

Tier two targeted assistance = Tier two % x Tier one targeted assistance

Impact of Tier Two Targeted Assistance

District

Executive Version Targeted Assistance

Adopted Targeted Assistance

Green Local (Wayne) Switzerland (Monroe)

$ 402,006

$ 614,432

$ 742,758

$ 1,104,487

Southern Local (Perry)

$ 943,056

$1,206,499

Scioto Valley (Pike)

$ 1,418,238

$2,272,007

Special Education

In addition to being included in the calculation for Core Opportunity Aid

Each Special Education student is funded using the following calculation:

Per pupil weighted dollar amount for

his/her Special Education Category*

X State Share Index

*See following slide

Special Education

Special Education

Weighted amounts

“

”

FY 14 $1,503 $3,813 $9,160 $12,225 $16,557 $24,407

FY 15 $1,517 $3,849 $9,248 $12,342 $16,715 $24,641

Category 1: Category 2: Category 3: Category 4: Category 5: Category 6:

All weighted funding components expressed in dollar amounts vs. Weights All amounts subject to: State share index for traditional districts State share percentage for JVSDs

Special Education Categories

1. Speech and language disability 2. Specific learning disabled or developmentally disabled 3. Hearing disabled or severe behavior disabled, 4. Vision impaired 5. Orthopedically disabled or as having multiple disabilities 6. Autistic, having traumatic brain injuries, or as both visually and hearing impaired

Preschool Special Education

Not part of the formula… • Previous law: • Preschool education for students with disabilities funded on a unit (per class) basis • no state share index multiplier, but approximately one-third of all units previously operated had no state funding. (Serving these students is required by federal law.) • New formula: ($4,000 X number of preschool students with disabilities) +

(number of students in each category X weighted amount for that category** X state share index X 0.5)

**Same as for school aged Special Education students

Limited English Proficient Students

In addition to being included in the calculation for Core Opportunity Aid

Each LEP student is funded using the following calculation:

Per pupil weighted dollar amount for

his/her LEP Category*

X State Share Index

*See following slide

Limited English Proficient Students

LEP

Weighted amounts

“

”

FY 14 $1,500 $1,125

FY 15 $1,515 $1,136

Category 1: Category 2: Category 3**:

$750

$758

All weighted funding components expressed in dollar amounts vs. Weights All amounts subject to: State share index for traditional districts State share percentage for JVSDs

** Depending on definitions developed by ODE, this category could apply to a student in multiple years.

Limited English Proficient Students

LEP Categories:

1. Enrolled in schools in the United States for 180 school days or less; and, Was not previously exempted from taking the spring administration of either of the state's English language arts assessments. 2. Enrolled in schools in the United States for more than 180 school days; or Was previously exempted from taking the spring administration of either of the state's English language arts assessments. 3. Does not qualify for inclusion under 1 or 2; and, Is in a trial-mainstream period, as defined by the department of education.

Economically Disadvantaged Aid

Per pupil amount x economically disadvantaged index²

• Per pupil amount $269 FY14, $272 FY15 • Economically disadvantaged index = (District % economically disadvantaged / State % economically disadvantaged) 2 • Index is squared to adjust for impact of high concentrations of poverty

• Total funding FY14 $372.2 million, FY15 $376.4 million

K-3 Literacy

• Two elements of per pupil funding for students grades K-3

per pupil amount x state share index

plus per pupil amount (not equalized) x number of pupils in grades K-3

• Equalized per pupil amounts FY14 $125, FY15 $175 • Un-equalized per pupil amounts FY14 $86, FY $115 • Total funding FY14 $75.3, FY15 $102.6

Gifted Education

• Identification FY14 $5, FY15 $5.05 per pupil • Service – Units based on ADM • 1 coordinator unit per 3300 (minimum .5 units) • 1 teacher unit per 1100

Career Tech Education

In addition to being included in the calculation for Core Opportunity Aid

Each Career student in a traditional school district is funded using the following calculation:

Per pupil weighted dollar amount for

his/her Career Tech Category*

X State Share Index

*The weighted dollar amounts and the 5 new career tech education categories are covered under the JVSD presentation.

Career Tech Education

• Career Tech Education Associated Services

District’s State Share Index

X $225 in FY 2014 & $227 in FY 2015

X sum of categories

one through five career tech ADM

Career Tech Education

Spending Requirements Codified: • At least seventy-five per cent of the funds shall be spent on: • curriculum development, purchase, and implementation;

• instructional resources and supplies; • industry-based program certification;

• student assessment, credentialing, and placement; • curriculum specific equipment purchases and leases; • career-technical student organization fees and expenses; • home and agency linkages; • work-based learning experiences; • professional development; and, • other costs directly associated with career-technical education programs including development of new programs. • Not more than twenty-five per cent of the funds shall be used for personnel expenditures.

Caps and Guarantees

• No district receives less than was received in FY13 • Guarantee includes career technical and transportation funding • Increased state funding capped at 6.25% in FY14 and 10.5% FY15 • Caps and guarantees necessary to adjust to years of change in enrollment, valuation and income

Caps and Guarantees

FY2014

FY2015

Total Guarantee

$140,487,866

$118,158,996

# Guarantee Districts

191

177

# Capped Districts

342

242

Capped Revenue

$814,552,206

$498,297,165

Estimates based on projections by the Legislative Service Commission

Community School Funding

• Opportunity Grant -- full per-pupil amount • Targeted Assistance funds – 25% of amount received by resident district (virtual schools receive no Targeted Assistance) • Full weighted dollar amounts for Special Education Categories • K-3 Literacy Funds -- $211 in FY14 & $290 in FY15 • Economically Disadvantaged Funds -- $269 in FY14 & $272 in FY15 X resident district’s economically disadvantaged index • LEP – same weighted dollar amount but no SSI applied • Career Tech Education Funds – same weighted dollar amount but no SSI applied

The Bottom Line

Primary and Secondary Education Funding, FY 2008-FY 2015 GRF, Lottery Profits, and TPP Reimbursement Funds ($ in millions)

FY 2013 Estimate

FY 2014 Estimate

FY 2015 Estimate

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Formula Aid and TPP Reimbursements

School District Formula Aid

$6,368.5 $6,544.6 $6,536.8 $6,514.7 $6,266.1 $6,325.6 $6,609.5 $7,042.4

Joint Vocational School District Formula Aid

$242.4 $259.1 $261.0 $263.0 $263.0 $263.0 $269.5 $277.1 Total Formula Aid $6,610.9 $6,803.7 $6,797.8 $6,777.7 $6,529.1 $6,588.6 $6,879.0 $7,319.5

TPP Reimbursement - Business TPP Reimbursement - Public Utility

$620.8 $799.5 $1,041.4 $1,052.3 $728.3 $482.0 $482.0 $482.0

$85.5 $28.0 Total Reimbursements $706.3 $881.8 $1,121.2 $1,129.1 $759.9 $510.0 $510.0 $510.0 $82.3 $79.9 $76.8 $31.6 $28.0 $28.0

Total Formula Aid and Reimbursements

$7,317.2 $7,685.5 $7,919.0 $7,906.8 $7,289.1 $7,098.6 $7,389.0 $7,829.5

Federal Stimulus

$0.0

$0.0 $417.6 $515.5

$0.0

$0.0

$0.0

$0.0

Total Formula Aid and Reimbursements - Excluding Federal Stimulus

$7,317.2 $7,685.5 $7,501.4 $7,391.3 $7,289.1 $7,098.6 $7,389.0 $7,829.5

Overall Primary and Secondary Education Funding (Including Formula Aid and TPP Reimbursements)

Primary and Secondary Education Total

$9,352.9 $9,715.1 $9,793.1 $9,763.8 $9,109.3 $9,198.8 $9,762.6 $10,336.0

Federal Stimulus

$0.0

$0.0 $417.6 $515.5

$0.0

$0.0

$0.0

$0.0

Primary and Secondary Education Total - Excluding Federal Stimulus

$9,352.9 $9,715.1 $9,375.6 $9,248.3 $9,109.3 $9,198.8 $9,762.6 $10,336.0

Transportation Funding

• Regular Education Formula (3317.0212)

• Other types (OAC 3301-83-01)

• Payment in Lieu (3327.02)

• Special Education (OAC 3301-83-01)

• ODE Calculator

• Data:

• T1 & T2 previous year • T1 current year

Regular Ed Overview

• Calculate last year’s cost per mile and cost per student for the state • Apply those costs to current year T1 data for pupils and miles for each district • Greater of (per mile) or (per student) • Pay at greater of 60% or state share index • Add costs for other types • Prorate to remain within appropriation

What is different?

• Eliminated from formula • Efficiency adjustment • HS transportation incentive • Incentive to transport students within 2-mile limit • Nontraditional rider adjustment • Transportation Supplement • Redefined “rider density” as total ADM/square mile, not # of qualifying riders/square mile

Details . . .

• Calculate each district’s cost per bus rider and cost per bus mile • Discard the 10 highest and 10 lowest district costs to remove extraneous data • Add all Type 1 and Type 2 riders and annual miles for all reporting districts • Add all Type 1 and Type 2 costs for all districts • Calculate the per pupil and per mile costs for the state data

Applying the State Costs to Your District

• Using your current year T1: 1.

Multiply regular ed riders x state cost

2.

Determine the district pupil calculation

3.

Multiply daily miles x 180 x state cost

4.

Determine the district miles calculation

• Take the larger of miles or pupils calculation •

Multiply this by greater of 60% or state share index (a measure of wealth)

• Set this number aside – it is the bus calculation

Calculating other Types

• Type III (public transit) • Multiply the state pupil cost x 35% x number of riders reported on T1 • Type V and VI (vans) • Multiply the state pupil cost x 50% x number of riders reported on T1

Prorating this Portion

• For each district - add calculated bus funding to calculated funding for types III, V, VI • Total this value for all districts in the state, and compare to appropriation • Determine the % reduction necessary to remain within the appropriation

Transportation Supplement Funding

• Districts that are below the median student density AND below the median wealth qualify for additional funding • $25.3M in FY 14 & $23.1M in FY 15 will be provided to supplement their funding. This is intended to bring them nearer to 100% of the formula funding amount. (Subject to Gain Cap & Guarantee). • $5M has set aside from the Straight A Fund for use by schools for transportation, including bus purchase. Districts must

qualify (Low wealth, Low density). Funding will be automatically distributed. (Not subject to Gain Cap & Guarantee).

Type IV (Payment in Lieu)

• New payment process this year

• Law defines the parent payment as $250 per child for a full year

• Budget bill allocates up to $5M to fund this in FY 14, and $2.5M in FY 15 • Districts are required to pay $250 even if there is insufficient funding to cover the cost • In past years, the amount paid the parent was based upon the available money, and the payment amount was reduced

Type IV Calculation

• Add up all Type IV students on current year T1 report • Divide that number into 5M to determine the state funding per student • Apply that rate to the number of students reported on the district T1 report.

Special Ed Transportation Funding

• Same as previous years • Based upon T2 report 1.

$6 per day per student

2.

+ 50% of cost in excess of $6 per day

3. Sum above, x greater of 60% or SSI (state share index) 4. Total all calculations for the state 5. Prorate to remain within appropriation

Guarantees & Caps…

Inside

Outside

• Regular Ed.

• Special Ed.

Transportation Funding

Transportation Funding

• Transportation Supplement

• $5M Earmark from Straight A Fund for Transportation Supplement

The funding:

Year

2011

2014

2015

Line 200502 (total)

458,138,410

505,013,527

521,013,527

Type IV set aside not applicable

5,000,000

2,500,000

Special Ed set aside

60,469,220

60,469,220

60,469,220

Driver education (PS) Supplemental set aside Funding left for reg ed

838,930

838,930

838,930

20,565,792

25,300,000

23,100,000

376,264,468

413,385,915

434,055,210

When will you see it?

• Normal process. . . • Last year payments are continued into the new school year • ODE will process the previous year T1 and T2 to determine average costs • ODE will process the new T1 to get current data and calculate • New payment adjustment applied in January of new school year to make payments current

Other notables . . .

• Nonpublic schools may run their own buses and charge for that service (3327.07) • Driver certificates can be issued by an ESC or by a local school (3327.10) • A new community school that is opening may notify its public district of residence that it will handle its own transportation as late as April 15

Questions

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