SCHOOL FINANCE FUNDAMENTALS
An overview that determines the
state and local revenue
of a typical small/rural school
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Texas Association Of Rural Schools
Student Information Required
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Total Refined ADA
Sp Ed FTE
Sp Ed WFTE
Career & Technology FTE
Comp Ed Students
Biling/ESL ADA
Gifted Ed ADA
Regular ADA (1-2&4 above)
295.000
3.860
12.240
10.260
108.000
2.930
14.750
280.880
Texas Association Of Rural Schools
STATE ALLOTMENT CALCULATIONS
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The first calculation is the Cost of Education Index (CEI). The
CEI adjusts the Basic Allotment, a per pupil cost as set by the
state, to account for personnel cost due to the cost of doing
business in any given school district.
In our example the district has an index of 1.04 (a 4% add on)
that is applied to 71% of the BA. It’s estimated that 71% of a
district’s cost is for salaries.
Let’s see how the formula works !
Texas Association Of Rural Schools
THE ADJUSTED BASIC ALLOTMENT
Basic Allotment @$4,765
ABA = ((BA *.71) * CEI) + (BA *.29)
ABA = (($4,765 *.71) * 1.04) + ($4,765 *.29)
ABA = ($3,383 * 1.04) + $1,382
ABA = $3,518 + $1,382
ABA = $4,900
This represents an increase of $135 per pupil over the original
Basic Allotment.
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Texas Association Of Rural Schools
State Allotment Calculations
(Continued)
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The next step is the Small or Mid-size school calculation.
This adjustment recognizes the high cost of small classes.
The mid-size adjustment is for districts under 5000 pupils and
the small adjustment is for districts under 1600 pupils. Both work
the same way.
The small district adjustment has two factors: .0004 for districts
over 300 sq miles and .00025 for districts under 300 sq miles
and presumed to be small by choice. Mid-Size uses .000025.
In our next example we will assume our typical small school has
less than 300 sq miles.
Texas Association Of Rural Schools
THE ADJUSTED ALLOTMENT
The Adjusted Basic Allotment@ $4,900
AA = (1+((1600-ADA)*.00025)) * ABA
AA = (1+((1600-280.88)*.00025)) * $4,900
AA = (1+(1319.12*.00025)) * $4,900
AA = (1 + .32978) * $4,900
AA = I.32978 * $4,900
AA = $6,516
This represents an $1,616 per pupil increase over the original
Adjusted Basic Allotment and $1,761 per pupil over the original
Basic Allotment.
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Texas Association Of Rural Schools
STATE ALLOTMENT CALCULATION
(Continued)
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We are now ready to calculate the Foundation School
Program cost for our typical small school.
The pupil or student counts from our first slide x their
appropriate weights x the Adjusted Allotment of $6,516.
Texas Association Of Rural Schools
FOUNDATION PROGRAM COST
Typical Small / Rural School
Reg. Program (280.88 X $6,516)
$1,830,214
Sp Ed
(12.240 X $6,516)
79,756
Career& Tech (10.26 X1 .35 X $6,516)
90,253
Comp Ed
(108 X .20 X $6.516)
140,746
Biling/ESL
(2.930 X .10 X $6,516)
1,909
Gifted
(14.75 X .12 X $6,516)
11,533
Transportation (Separate Calculation)
31,597
New Facilities Allotment (Campus ADA X $250)
0
High School Allotment (80 ADA x $275)
22,000
Total FSP Cost
$2,208,008
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Texas Association Of Rural Schools
FOUNDATION SCHOOL PROGRAM
Local Share Calculation
Our District Has a Wealth of $28,529,448
State Requires an $1.00 per $100 Local Share
Therefore The local Share is:
$28,529,448 X .0100 = $285,294
Now let’s summarize where we are…
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Texas Association Of Rural Schools
A SUMMARY OF STATE AID TO THIS POINT
ALSO CALLED TIER 1
Reg program
$1,830,214
Sp Ed
79,765
Career & Tech
90,253
Comp Ed
140,746
Biling/ESL
1,909
Gifted
11,533
Transportation
31,597
New Facilities
0
High School_____________________22,000
Total FSP
$2,208,008
Less LFA
- 285,294
Net State (Tier 1)
$1,922,714
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Texas Association Of Rural Schools
STATE ALLOTMENT CALCULATIONS CON’T
Guaranteed Yield Allotment( GYA)
A district’s GYA is partly based on Weighted ADA so we must calculate the district
WADA.
 WADA equals the Total FSP less the transportation, the new facilities and high school
allottments divided by the original BA less one half the effect of the ABA.
 Thus :
WADA = ( FSP – TRANS, FAC ,HS ) / ((( ABA – BA ) *.5 ) + BA )
WADA = (2,208,008- 53,597 ) / ((( 4,900 – 4,765 ) *.5 ) + 4,765 )
WADA = 2,154,411 / (( 135 *.5 ) + 4,765 )
WADA = 2,154411/ ( 67.5 + 4,765 )
WADA = 2,154,411 / 4,832.5
WADA = 445.82
Remember Refined ADA for the district was 280.88,therefore the use of WADA becomes
an extreme issue for small/rural schools.
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Texas Association Of Rural Schools
GUARANTEED ALLOTMENT GYA
(Continued)
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The GYA or Tier 2 (The Golden Pennies) is calculated using the following:
1. WADA ( Calculated @ 445.82 )
2. District Wealth ( $ 28,529,448 )
3. District M&O Tax Rate above the Local Share of Tier 1(DTR)
The Total M&O Tax Rate ($1.00), plus the GYA Pennies currently aloud by the
State is $.06 ; therefore the DTR is $.06
4. Local Revenue (LR) is the amount raised by the DTR times District Wealth,
therefore LR is $17,118 ($28,529,448*.0006)
5.State Guaranteed Level of wealth (GL) of $590,200 per WADA (Austin ISD) is stated as
$59.02 per $.01 of tax effort
The GYA formula is as follows:
GYA = ( G L * WADA * ( DTR * 100 ) – LR
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We will examine the formula on the next slide
Texas Association Of Rural Schools
CALCULATING THE GYA
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GYA = (GL * WADA * (DTR * 100) – LR
GYA = ($59.02 * 445.82 * ($.06*100)) - $17,118)
GYA = ($59.02 * 445.82 * 6) - $17,118)
GYA = $157,874 - $17,118
GYA = $140,756
Therefore the 2nd Tier (The Discretionary Tier) revenue
for our typical small district is $ 140,756. Now we will
Summarize Tier 1 and Tier 2.
Texas Association Of Rural Schools
A SUMMARY OF REVENUE TYPICAL ISD
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LOCAL REVENUE
Tier 1 Local Share
Tier 2 Local Share
TOTAL LOCAL
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GRAND TOTAL
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TIER 1 (FSP)
Less Local Share
Net Tier 1
TIER 2 (GYA Discretionary Tier)
Technology @ $30 per ADA
TOTAL STATE AID
$2,208,008
- 285,294
1,922,714
140,756
8,850
$2,072,320
$ 285,294
17,118
$ 302,412
$ 2,072,320
$ 302,412
$ 2,374,732
Texas Association Of Rural Schools