Understanding your
State Aid Notice
Kelly Hayes
Springdale Public Schools
October 26, 2011
Handouts
 Your state aid notice
 Springdale’s state aid notice
Millage as it relates to the
State Aid Notice
 The State Aid Notice is based solely on the
Uniform Rate of Tax (URT).
 What is the URT? 25 maintenance and
operation mills.
 So, if your district has more M&O mills,
Dedicated M&O mills, Capital Outlay mills,
Debt Service mills---congratulations!
 (But with regard to the State Aid Notice—
none of that matters)
State Aid Notice
 Unless otherwise noted, the State Aid Notice
used for this presentation was the Preliminary
2011-12 notice dated July 29, 2011.
Lines 1-4: Local Assessment
 Lines 1 through 4 are simply the assessed
value of the property within the school
district’s boundary.
 This information can be obtained from the
county assessor.
 Note that this information is always behind—
i.e. the assessment for the 2010-11 printouts
is the 2010 assessment.
Extra info about assessment
 Question: How many dollars does your
district generate per mill?
 Answer: Look at your total assessment (Line
4). Put your finger over the last three
numbers. The amount remaining is the
dollars your district generates per mill if you
were to collect 100% of your abstract.
 Example: Springdale’s 2010 total
assessment is $1,415,539,243. Ignore the 2,
the 4, and the 3—Springdale generates
$1,415,539 per mill.
Line 5: 98% of URT X Assessment
 Just what it says…
 Take your total assessment (Line 4) and
multiply it by 98% and the URT (.0025 or 25
mills).
 Springdale’s calculation:
1,415,539,243 X 98% X .0025 = 34,680,711
 Calculate your district’s line 5.
Line 6: Net Revenues
 At the end of the calendar year, the county
collector will send the state (and hopefully
you) a report which shows all of the tax
collections for the year.
 Compare this report to your receipts for the
calendar year.
 When you are satisfied that it is reasonably
close…you will need to prorate your receipts
down to 98% of the 25 URT mills.
Line 6: Net Revenues (cont)
 Calculation: Total calendar year tax receipts
divided by the total number of mills in your
district multiplied by 25 (the URT mills) and
98%.
 Example: School A collected $20 million in
tax receipts during the 2010 calendar year.
They have a total of 35 mills. Divide the $20
million by 35 and multiply by 25 and 98%.
 $20 Million / 35 X 25 X 98% = $14 million
Line 6: Net Revenues (cont)
 The resulting number is then compared to
Line 5.
 If Line 6 is lower than Line 5, then the state
sends you a check for the difference.
Why? Because you didn’t receive all of your
98% guaranteed money.
 If Line 6 is higher than Line 5, then you have
to send the state a check for the difference.
Why? Because you collected more than your
98% guaranteed money.
Line 7: Five Year Avg Misc Funds
 Miscellaneous funds include the following:
Federal forest reserves, Impact Aid, Revenue
in Lieu of Taxes…etc.
(See §A.C.A. 6-20-2303)
 This amount is your miscellaneous funds
average for the last five years prorated down
to URT mills. If you collected $100,000 in
miscellaneous funds, then the calculation
would be:
$100,000 / 35 mills X 25 mills = $71,429.
NOTE: This calculation is based on FISCAL
year NOT calendar year.
Lines: 8-13
 These lines refer to your Average Daily
Membership. (See § A.C.A. 6-20-2303)
 Line 8 comes from Cycles 3,5,& 6 of the
second year prior to the current year.
 Line 9 is from the previous year (cycles 3,5 &
6). This number is used to calculate Per
Student Revenue (Line 14) for the current
fiscal year.
 Lines 10-13 are self explanatory.
Line 14: Per Student Revenue
 Formula: The sum of 98% of URT and Five-
Year Avg Misc Funds divided by prior year 3 qtr
avg ADM.
Step 1:
Add together Lines 5 and 7.
Step 2:
Divide the sum of Step 1 by the
amount on Line 9.
Line 14: Per Student Revenue (cont)
 Springdale’s calculation:
 Step 1:
$34,680,711 (Line 5) + $14,119 (Line
7) = $34,694,830.
 Step 2: Divide the total in step 1 ($34,694,830)
by 18,716.83 (Line 9) = $1,853.67 (Line 14)
 Springdale’s Per Student Revenue for 2011-12
is $1,853.67.
 Calculate your district’s Per Student Revenue.
Line 15: Per Student Foundation
Funding Amount
 Amount set by State legislature
 2010-11
$6,023 per ADM
 2011-12
$6,144 per ADM
 2012-13
$6,267 per ADM
Line 16: Per Student State Foundation
Funding Aid
 Line 16 calculation: Line 15 minus Line 14.
 Springdale’s Calculation:
Minus
Equals
Line 15
Line 14
Line 16
$6,144.00
-$1,853.67
$4,290.33
Line 17: PY ALE FTEs
 This is the average of the four quarters FTE
for the previous fiscal year.
(Cycles 3,5,6,&7)
Line 18: CY ELL Students
 Current year English Language Learner
Students (not proficient in English language)
as of November 1st of the current fiscal year.
 NOTE: This is the only categorical funding
that is based on CURRENT year rather than
PRIOR year ADM.
Line 19: NSLA Students
 National school lunch students (low
socioeconomic as identified by eligibility for
free or reduced-price meals) as of October
1st.
 Must match Food Service free and reduced
count!
 Prior year number reported in Cycle 2.
Line 20: Professional Development
Funding Rate
 Amount up to $51 per prior year ADM.
 In 2011-12, amount per ADM is $42.38.
Line 21: Adjusted 1/1/05
Scheduled Debt Payment
 Used to calculate Bonded Debt Assistance
 Based on Debt Payment schedule in place as
of 1/1/2005.
 To see your district’s payment schedule as of
1/1/2005, go to the ADE website. Choose
School Finance Reports. At the bottom under
Other Reports, you will see Bonded Debt
Principal and Interest Payment Schedule
2005 to 2039.
Line 21: Adjusted 1/1/05
Scheduled Debt Payment (cont)
 Back in 2005, districts were told that 90% of
their existing debt P&I payments would be
eligible for Bonded Debt Assistance. To be
eligible for the remaining 10%, districts had to
prove that all bond proceeds related to the
debt had been spent on academic (nonathletic) facilities.
 Therefore, today Bonded Debt Assistance is
calculated based on anywhere from 90% to
100% of the debt payment schedule which
existed as of 1/1/2005.
Line 21: Adjusted 1/1/05
Scheduled Debt Payment (cont)
 Example: Per the debt payment schedule on
the ADE’s website, Springdale’s annual P&I
payment for 2012 (as of 1/1/05) was to be
$7,714,998.
 Springdale was able to prove that 93.67% of
its bond proceeds qualified for Bonded Debt
Assistance.
 Therefore, the number listed for Springdale
on Line 21 is $7,226,638.18 ($7,714,998 X
93.67%)
Line 22: Bonded Debt Assistance
Funding Factor
 Set by legislature—currently at $18.03 per
ADM
Line 23: State Wealth Index
 Formula as follows:
Take Line 14 (per student revenue) and
divide it by Line 16 (Per student state
foundation funding aid). Subtract this number
from 1.00. The result is your State Wealth
Index.
 Example: Springdale’s Line 14 (1,853.67)
divided by Line 16 (4,290.33) equals 0.43206.
 1.00 minus 0.43206 equals 0.56794.
 Calculate your district’s State Wealth Index.
Lines 24 & 25: Isolated ADM &
Funding
 You know who you are!
 Law is § 6-20-601, 6-20-602, & 6-20-603
Line 26: State Foundation
Funding Aid
 Formula: Line 9 multiplied by Line 16.
 Springdale’s example: Line 9 (18,716.83)
multiplied by Line 16 ($4,290.33) equals
$80,301,373.
Line 27: Educational Excellence Trust
Funds
 This number is computed as a percentage of
Line 26. For the 2011-12 school year, this
percentage is 10.228%.
 This % varies from year to year. (In 2010-11,
it was 9.909%.)
 Since trust funds are calculated based on
State Foundation Funding Aid, some districts
have little or no trust fund requirement—
because they receive little or no State
Foundation Funding Aid.
Line 27: Educational Excellence Trust
Funds (cont)
 Districts with an annual increase in Trust
Funds which exceeds the highest level of
Trust funds in any year since 1991 must
distribute the increase equally to all staff
members.
 Experience steps and education increments
no longer count toward meeting the Trust
fund requirement.
 So, districts with an increase in Trust Funds
must add to the base of the certified salary
schedule.
Line 27: Educational Excellence Trust
Funds (cont)
 Under what scenarios could your trust fund
amount increase?
 If the State increases the % of foundation aid
that is considered to be trust funds
 Decrease in local assessments
 Increase in number of students is greater
than the increase in assessments
Line 28: Alternative Learning
Environment
 Formula:
2011-2012: Line 17 multiplied by $4,145.
2012-2013: Amount per FTE goes to $4,228.
Line 29: English Language Learners
 Formula:
2011-2012: Line 18 multiplied by $299.
 Reminder: This is the only Categorical
funding that is based on CURRENT year
numbers.
2012-2013: Amount per student goes to
$305.
Line 30: National School
Lunch Act
 Formula:
Line 19 multiplied by one of the following:
Percentage of
NSLA students:
More than 90%:
70% to 90%:
Less than 70%:
2011-12
$1,518
$1,012
$ 506
2012-13
$1,549
$1,033
$ 517
Line 31: NSLA Transitional
Funding
 Basically, if/when a district goes between tiers
of NSLA funding, there is a three year phase
in or phase out period.
 Example: When moving from the tier of “Less
than 70%” to the tier of “More than 70% but
less than 90%”, the funding per FTE doubles.
However, a district will only receive one-third
of the additional funds the first year, twothirds the second year, and all of the
additional funds beginning in the third year.
Line 32: NSLA Growth Funding
 Based on growth pattern for previous three
years.
 Theory: If your district exceeds state growth,
then you receive your average three years
growth % multiplied by the amount of NSLA
funds that you are entitled to receive in the
current year.
Line 33: Professional Development
 PY Three Qtr ADM (Line 9) multiplied by
Amount on Line 20.
 Calculate your district’s professional
development funds.
Line 34: Bonded Debt Assistance
 Formula:
Step One: Convert your 1/1/05 scheduled debt
payment to mills.
Example: Springdale’s scheduled debt payment
on Line 21 ($7,226,638.18) divided by total
assessment on Line 4 ($1,415,539,243)
multiplied by 1,000 equals 5.10521924 mills.
In other words, based on the 2010 total
assessment, it would take 5.10521924 mills to
pay Springdale’s 1/1/05 Debt Payment.
Line 34: Bonded Debt Assistance
(cont)
 Formula
Step 2: Take the answer in Step One and
multiply it by the PY ADM 3 Qtr Avg (Line 9)
and by the Bonded Debt Assistance Funding
Factor (Line 22) and by the State Wealth
Index (Line 23). This will equal your Bonded
Debt Assistance.
Line 34: Bonded Debt Assistance
(cont)
 Example:
The number of mills that it would take Springdale
to pay its 1/1/05 debt is 5.10521924. Multiply
this by PY ADM (18,716.83-Line 9) and by
Funding Factor (18.03-Line 22) and by State
Wealth Index (.56794-Line 23). The result is
Bonded Debt Assistance.
Calculation:
5.10521924 X 18,716.83 X $18.03 X .56794 =
$978,468 (Bonded Debt Assistance Line 34)
Line 35 & 36: General Facilities
& Supplemental Millage
 Amounts were frozen in 2005-2006.
 Funding is being phased out at the rate of
10% per year.
 Example: Springdale’s amount for General
Facilities in 2005-2006 was $251,672. Our
amount is being reduced by $25,167 per
year.
 The funds completely go away in 2015-16.
Line 37: Isolated Funding
 You know who you are!
 Law is § 6-20-601, 6-20-602, & 6-20-603
Lines 38-40: Special Needs Funding
 You know who you are!
 Law is § 6-20-604
Line 42: Declining Enrollment
 Equal to the difference between the average
of the two immediately preceding years’ ADM
and the ADM for the previous school year
multiplied by the Per Student Foundation
Funding Amount.
Line 42: Declining Enrollment
(cont)
 Calculation: I’ll use Pine Bluff as an example.
 2009-10 3 quarter ADM =
4,809.57
 2010-11 3 quarter ADM =
4,734.39
The average of these two amounts is
4,771.98
Subtract 2010-11 3 qtr ADM -4,734.39
The difference is
37.59
Multiplied by
X
6,144
Equals Declining Balance $
230,953
Lines 41 & 43: Adequacy lines
 No district received funds under either of
these two categories in 2010-11.
 ???
Line 44: Student Growth
 NOTE: The calculation for Line 44 (only) is
based on the Final printout for the 2010-11
school year.
 Formula: Step 1: Add together each Qtr
ADM number for the year.
 Step 2: Divide the resulting total by four to
get an average of the four quarters.
 Step 3: Subtract the three quarter average
from the previous fiscal year from this
number. Multiply the result by the Per
Student Foundation Funding Amount.
Line 44: Student Growth Example
 Step 1: Springdale’s four quarter averages
for 2010-11 were as follows:
Qtr 1:
18,771.27
Qtr 2:
18,734.32
Qtr 3:
18,658.61
Qtr 4:
18,567.95
Total
74,732.15
Step 2: 74,732.15 divided by 4 = 18,683.0375
Line 44: Student Growth Example
(cont)
 Step 3:
4 qtr average
18,683.0375
Minus: Prior yr 3 qtr avg -18,087.8700
Equals
595.1675
Multiplied by Per Student
Foundation Funding Amt
X $6023
= Student Growth Funding
$3,584,694
Line 45: 98% of URT X
Assessment less Net Revenues
 Line 5 minus Line 6
 This is the difference between the calculated
98% (line 5) and what the county collected
(line 6).
 If it is a negative—the district owes the state
 If it is a positive—the state owes the district
Questions? Comments?
 Email: kelly.hayes@sdale.org