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Finance 101

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									FINANCE 101
    WHAT HAPPENED AROUND THE STATE IN
          FISCAL YEAR 2010-2011?


 # of Districts providing teacher supply         56
 # of Districts providing step increase          29
 # of Districts not providing supplies           30
 # of Districts not providing step increase      57
 # of Districts providing supplies/no step       33
 # of Districts providing step/no supplies       6
 # of Districts not providing step or supplies   24
        HOW IS YORK SCHOOL DISTRICT ONE
                    FUNDED?
   Local (General Fund)
       Local property taxes
       Interest Earnings
   State
       EFA
       EIA
       Lottery
       State Property Tax Relief Funds
   Federal
       Title I
       IDEA
       Ed Tech
       Other competitive grants
       Career and Technical Education
       ARRA (for a limited time)
    GENERAL FUND REVENUES


$11,426,621




 $1,805,466
            GENERAL FUND REVENUES

   State Revenue
      EFA                   $8,580,448   The District
                                          doesn’t have any
      TSS/Fringe            $ 668,333
                                          control over the
      Employer Contrib.     $4,225,319   State Money
      Other State           $1,138,426
      LPTR                  $1,805,466
                                          FY 2009-2010
      Homestead             $ 550,000    State Revenue
      Merchant’s Invent.    $ 52,689     budgeted was
      Act 388               $4,169,678   $22,804,514
     Total State Money      $21,190,359


   Local Revenue
      Taxes                $11,426,621
      Interest                $50,000
      Misc.                  $140,000
      Indirect Costs         $150,000
     Total Local Money      $11,766,621
GENERAL FUND EXPENDITURES
    STATE FUNDS ALLOCATED TO DISTRICTS

 EFA (Education Finance Act)
 EIA (Education Improvement Act)

 General Appropriations

 Lottery

 Reimbursement through Property Tax Relief
       1994 Property Tax Relief
       Act 388
       Homestead Exemption
     EDUCATION FINANCE ACT (EFA)
   Passed in 1977
   Purpose
     Adequacy
     Equality
     Accountability
   The EFA formula distributes funds on a per pupil basis and
    establishes a minimum required local share of funding that
    is based on a district’s ability to raise revenue from the
    property tax.
   Districts must provide its required share of the EFA
    defined minimum educational program, which is set
    annually by the legislature and expressed as a base
    student cost in terms of dollars per weighted pupil.
   On average statewide, the EFA provides 70% of the cost of
    the defined minimum program while local districts provide
    30%
       Wealthier districts receive less than 70% of the EFA’s defined
        minimum program from state funds and poorer districts
        receive a larger share.
         EDUCATION FINANCE ACT (EFA)

   The formula for determining how much money a
    district will receive from the EFA and the
    amount a district must provide is based on:
     The number of weighted pupil units (WPU) in a
      district
     The base student cost (BSC) per pupil as defined by
      the legislature
     The district’s index of taxpaying ability (ITA)
     135 ADM

              (District WPU x BSC)
        - (State WPU x BSC x ITA x .3)
                District Allocation
          INDEX OF TAXPAYING ABILITY

 Based on the assessed value of real and personal
  property in a school district.
 Index is calculated by dividing the assessed value
  of taxable property of the district by the assessed
  value of all taxable property in the state.
 The district’s index shows what percentage of the
  state’s taxable property value is in the district.
       http://www.ed.sc.gov/agency/Finance-and-
        Operations/Finance/old/finance/budget_information/i
        ndex.html
   The South Carolina Department of Revenue
    annually updates records and calculates an index
    of taxpaying ability for every district to be used
    in the EFA distribution formula.
            BASE STUDENT COST

 Set annually by the legislature
 Adjusted annually to reflect the inflated cost of
  providing the EFA defined minimum educational
  program.
 Covers the cost of providing classrooms, teachers,
  supplies and other needs to provide the level of
  educational quality in the 1977 legislation.
 Only fully funded EIGHT times since 1977.
BASE STUDENT COST - UNDERFUNDED
AVERAGE DAILY MEMBERSHIP




               05-06   06-07   07-08   08-09   09-10
 Elementary    2,373   2,376   2,492   2,494   2,455
 Middle        726     724     693     707     738
 Junior High   789     825     795     821     769
 High          1,083   1,052   1,038   1,068   1,073
               4,971   4,977   5,018   5,090   5,035
          WEIGHTED PUPIL UNITS


 EFA defines a weighted pupil unit for each type
  of student in the education system to use in the
  act’s funding formula.
 Weightings are determined by considering the
  cost of educating different student populations
  based on their specific educational needs.
                      WEIGHTINGS
Classification   Weighting    Classification   Weighting

                             Emotionally         2.04
Kindergarten       1.30
                             Handicapped
                             Educable            1.74
Primary            1.24      Mentally
                             Handicapped
Elementary         1.00      Learning            1.74
                             Disabilities

High School        1.25      Hearing             2.57
                             Handicapped
                             Visually            2.57
Trainable          2.04
                             Handicapped
Mentally
Handicapped                  Orthopedically      2.04
                             Handicapped
Speech             1.90
Handicapped                  Vocational          1.29

Homebound          2.10
                             Autism              2.57
 EDUCATION IMPROVEMENT ACT (EIA)
 Passed in 1984
 Increased the state sales tax rate from 4% to 5%
  with the extra penny dedicated to raising student
  performance, emphasizing basic skills,
  evaluating the teaching professions, rewarding
  productivity, and constructing school buildings.
 Examples of programs funded by EIA:
     Academic Assistance to all grades (K-12)
     Early childhood education for four year olds
     Summer school
     Advanced placement courses
     Gifted and talented programs
     Salary supplements for Nationally Board Certified
      teachers
GENERAL APPROPRIATIONS AND LOTTERY

 Fringe benefits and retirement insurance for
  school personnel
 Bus Driver’s salaries

 In 2000, South Carolinians voted to amend the
  constitution to permit a state lottery
 The General Assembly approves allocation of the
  lottery proceeds each year.
 Higher education claims the larger share of
  lottery appropriations.
       YSD1 Lottery allocation for 2010/2011
         K-5    $353,571.80
         6-8    $ 12,899.50
               PROPERTY TAX RELIEF

   In 1994 and in 2006, the General Assembly
    created property tax relief programs for
    homeowners that substantially altered the
    distributions of responsibility for education
    funding.
     1994 – provided relief from school operating taxes for
      homeowners on the first $100,000 of property value
     2006 – Act 388 created a one cent sales tax (5% to
      6%) increase dedicated to full relief from school
      operating taxes for homeowners.
   Homestead Exemption
       Exempts the first $50,000 of the value of your home
        from property taxes if you meet certain age or
        disability requirements.
        SCHOOL DISTRICT RESPONSIBILITIES

   School Boards review and approve district
    budgets.
       A district’s fiscal authority may limit the school
        board’s ability to set the local property tax rate to
        fully fund its recommended budget
   Teacher qualifications, minimum teacher pay
    and benefits, curriculum standards, instructional
    days and time requirements are all set by the
    state
       School boards have some discretion in setting teacher
        salaries over and above the state minimums
                TEACHER PAY SCALE

   Degree         Years of    York School   Minimum per
                 Experience     District     State Scale



Bachelor’s           0          $32,127       $28,943


Master’s             15         $51,242       $46,164


Master’s + 30        22         $61,201       $55,136


Doctorate            22         $71,482       $64,398
         BUS DRIVER PAY SCALE

 Years of      York School   State Scale
Experience       District


    0             $9.51             $7.25

    10           $12.12             $8.42

    15           $13.63             $9.28

    22           $15.73            $10.65
                      DEBT

 Districts rely primarily on property tax to fund
  debt service for capital expenditures.
 There is occasional state aid for school
  construction, but most of the cost of building
  schools falls on local taxpayers.
 Money received from debt service cannot be used
  to fund the normal day-to-day operations of the
  district.
 This money has to be spent on capital and/or land
  improvements.
                      BORROWING

 Districts may issue short term tax anticipation
  notes to provide an income flow until tax
  revenues become available in November
 Districts can borrow through general obligation
  bonds to finance construction programs
 Borrowing is limited to a maximum of 8% of the
  district’s assessed property value.
       $90,482,772
   To exceed the 8% borrowing limit, a referendum
    is required.
    WHAT MONEY FUNDS EXTRACURRICULAR
      ACTIVITIES AND OTHER SPENDING?

   Student Activity Funds
       Each school has student related activities and
        programs that are primarily supported by funds
        collected from students, parents and community
        members for a specific purpose
   Cafeteria Funds
       Cafeteria proceeds are generated through breakfast
        and lunch sales to students and adults.
       All of the proceeds are accounting for in the Food
        Service Fund, which can only be used to support the
        operations of the school breakfast and lunch
        program, as outlined by the federal government.
       These funds can not be utilized to support general
        district operations.
    WHAT MONEY FUNDS EXTRACURRICULAR
        ACTIVITIES AND OTHER SPENDING
                 (CONTINUED)?
   Building Funds
     The majority of the funds that are received by school
      districts for the purpose of funding capital projects
      and building programs are generated from bond
      proceeds.
     All bond proceeds are accounting for in the Capital
      Projects Fund.
     Bond proceeds must be used to fund school
      construction, related renovations and/or significant
      capital equipment purchases.
            BUDGET PROCESS TIMELINE
        Month       Internally            YSD Board             State
January         -Develop Budget                           -Governor
                Guide                                     proposes budget
                                                          for the State
February        -Visit Schools        -Board receives
                -Budget packet to     Budget Guide and
                principals            Calendar
March           -All budgets and                          -House W&M
                new requests due to                       budget presented
                Finance                                   -House budget
                                                          adopted
April           -Budget estimates     -Budget Work        -Senate Finance
                to Superintendent     Session             budget presented
May             -Updated estimates    -1st Reading of     -Senate adopts
                                      Budget              budget
June                                  -2nd and Final      -Legislative
                                      Reading of Budget   approval of
                                                          budget

								
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