School Funding 101

Understanding School Funding Terms and Concepts

Montana School Funding 101General Fund Budget

• Two lawsuits that shaped our funding structure today.– Loble Decision (1989)– Columbia Falls vs. Montana

• Sherlock Decision (2008)

• School Funding Basics– Minimum and Maximum Budgets

School Funding 101General Fund

• Base Budget– 80% of average

• Maximum Budget– average

• Enrollment determines budget

Montana School Funding OverviewPer Pupil Spending in the State

$10,500 $11,227 $10,325 $12,400

$8,500 $8,322 $8,267 $8,955

$7,500 $7,850 $7,900$6,500 $6,750 $6,825 $6,900

$5,085 $5,100 $5,123 $5,175

$4,800 $4,850 $4,922 $4,927

$4,556 $4,678 $4,625

$4,235 $4,325 $4,328 $4,443$4,150 $4,175

$3,500 $3,450 $3,275 $3,628

$3,000 $2,800 $2,754

Montana School Funding Overview$10,500 $11,227 $10,325 $12,400

$8,500 $8,322 $8,267 $8,955

$7,500 $7,850 $7,900$6,500 $6,750 $6,825 $6,900

$5,085 $5,100 $5,123 $5,175

$4,800 $4,850 $4,922 $4,927

$4,556 $4,678 $4,625

$4,235 $4,325 $4,328 $4,443$4,150 $4,175

$3,500 $3,450 $3,275 $3,628

$3,000 $2,800 $2,754

Maximum100%Average

Montana School Funding Overview$10,500 $11,227 $10,325 $12,400

$8,500 $8,322 $8,267 $8,955

$7,500 $7,850 $7,900$6,500 $6,750 $6,825 $6,900

$5,085 $5,100 $5,123 $5,175

$4,800 $4,850 $4,922 $4,927

$4,556 $4,678 $4,625

$4,235 $4,325 $4,328 $4,443$4,150 $4,175

$3,500 $3,450 $3,275 $3,628

$3,000 $2,800 $2,754

Maximum100%Average

20 %

80% ofAverageBASE

Guaranteed Tax Base• Taxable

Valuation of each county

• Average for the State

• State Assistance for Counties below the average

State Average Taxable Valuation

State Average

Taxable Valuation AssistanceGuaranteed Tax Base

County Average

Budget Terminology• Basic Structure of the General Fund

Maximum 100% Budget

BASE Budget

80%

The Over Base Budget includes previously approved local mill levies, newly voted levies & tuition payments.

The BASE Budget is set by formula and takes into account all State funding, mandatory permissive mill levies, and Guaranteed Tax Payments (GTB).

Direct State Aid

• Per Student (ANB)– Elementary $5,120– High School $6,555

• Basic Entitlement (School)– Elementary $40,000– Middle School $80,000– High School $290,000

Budget Terminology• Basic Structure of the General Fund

Maximum 100% Budget

Over Base Budget

BASE Budget

80%

New Mill LeviesPrevious Mill Levies(Tuition Payments)

Guaranteed Tax BaseNon-Levy RevenueSpecial EducationDirect State AidIndian Education for AllAmerican Indian Achievement GapAt Risk StudentsQuality Educator Payments

State Payment Categories

• Direct State Aid – School & Students• Special Education• Quality Educator• Indian Education for All• American Indian Achievement Gap• Data for Achievement• Guaranteed Tax Base (if applicable)• At Risk

State Support Sherlock Decision

• Montana Quality Education Coalition -MQEC• State Share for Education• “ the current Montana school funding system

violates Article X, Section 1 of the Montana Constitution in that it fails to provide adequate funding for Montana’s public schools.”

State Support Share of General Fund Budgets

71.44%

69.43%

67.30% 67.16%66.66%

65.37%

64.38%

63.01%

62.00%

62.88%63.51%

61.49%

60.79%60.49%

59.99%60.53%

61.91%

63.40% 63.46%

63.12% 63.35%63.42% 63.64%

64.04%

54.00%

56.00%

58.00%

60.00%

62.00%

64.00%

66.00%

68.00%

70.00%

72.00%

74.00%

FY1991

FY1992

FY1993

FY1994

FY1995

FY1996

FY1997

FY1998

FY1999

FY2000

FY2001

FY2002

FY2003

FY2004

FY2005

FY2006

FY2007

FY2008

FY2009

FY2010

FY2011

FY2012

FY2013

FY2014

State Government Trend

Budgeted Funds• General• Transportation• Bus Depreciation • Tuition• Retirement• Adult Education• Non-Operating• Technology• Flexibility• Building Reserve

• (Red indicated that the Great Falls Public School District does not use this Fund)

Moving Parts

• Student Enrollment• Taxable Valuation/Mill Value• State Support• Guaranteed Tax Base• Annual Increases (Inflation + Increases)• Health Insurance Costs• Local Levies

InflationBasic Entitlements FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Elementary Basic $40,000 $50,000 $50,895 $51,526 $52,093

Middle School Basic $80,000 $100,000 $101,790 $103,052 $104,186

High School Basic $290,000 $300,000 $305,370 $309,157 $312,558

Basic Entitlement Increments

Elementary (each 25 ANB> 250 ANB) $2,000 $2,500 $2,545 $2,576 $2,605 Middle School (each 45 ANB> 450 ANB) $4,000 $5,000 $5,090 $5,153 $5,209 High school (each 80 ANB past 800 ANB) $12,000 $15,000 $15,269 $15,458 $15,628

Per ANB Entitlements

Elementary Per ANB $5,226 $5,348 $5,444 $5,512 $5,573High School Per-ANB $6,691 $6,847 $6,970 $7,056 $7,134District State Aid (DSA) % 44.7% 44.7% 44.7% 44.7% 44.7%

School District Cash Flow(Why Reserves are needed)

November and May – Taxes PaidAll other months except July– Direct State Aid

July Aug Sept Oct Nov Dec Revenue $181 $2,148 $2,232 $2,186 $10,774 $2,284Expenses $809 $1,211 $3,337 $3,429 $3,516 $3,958

Jan Feb Mar Apr May JuneRevenue $2,265 $2,142 $2,171 $2,208 $9,305 $4,540Expenses $3,300 $3,400 $3,988 $3,447 $3,685 $9,177

Cash Flow

Reserves vs. Fund BalanceGovernmental Accounting Standards Board 54 – Fund Balance

• Non-Spendable – Inventory or Corpus of Endowment Fund

• Restricted – Money is generated from enabling legislation.

• Committed – Constrained for a specific purpose by the highest level of decision making authority (Board).

• Assigned – District intends to use – Board or designated official by the board has the authority to spend funds.

• Unassigned – General Fund Budget money only which is available for any purpose.

http://opi.mt.gov/pdf/schoolfinance/budget/UnderstSchlFin.pdf

Proposed District Financial ProcessJanuary 2016: Setting the Stage – Providing Basic Information: “This is Great Falls Public Schools” presentation with voice recorded and posted in a variety of places for people to access and view on their own. February 2, 2016: Macro Budget & Fund Balance PresentationsFebruary 17, 2016: State & Federal Revenue Projections - Estimates of Cost Increases & Earmarks.March 3, 2016: Final Review of State funding and Cost Estimates. Community input.March 10, 2016 : Budget Recommendations & ProposalMarch 28, 2016 : Board Budget Committee Recommendation with Board Action

Resources– Brian Patrick

Director of Business Operations Great Falls Public Schools

– Information on District Web Page– http://www.gfps.k12.mt.us

– District Budget Information– http://

www.gfps.k12.mt.us/sites/default/files/GFPS_DistrictBudgetInformation2.pdf

• brian_patrick@gfps.k12.mt.us

• 268-6050