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EQUALIZATION AIDEQUALIZATION AIDWASBO NEW SCHOOL WASBO NEW SCHOOL
ADMINISTRATORS & BUSINESS ADMINISTRATORS & BUSINESS SUPPORT STAFF WORKSHOPSUPPORT STAFF WORKSHOP
Stevens PointStevens Point
August 17, 2007August 17, 2007
Karen KucharzKaren KucharzSchool Finance TeamSchool Finance Team
Division for Finance and ManagementBrian Pahnke
Division Administrator608-267-9124
School Financial ServicesDavid Carlson
Director608-266-6968
School Financial ServicesJerry Landmark
Assistant Director608-266-3464
Debbie Gaffney-DilleyProgram Assistant
608-267-9114
Pam SchumacherAccountant
608-267-9205
VacantFinancial Specialist
608-266-1089
Brad AdamsConsultant
608-267-3752
Natalie RewAuditor
608-267-9212
Daryl MillerIS Comprehensive
Specialist608-266-1389
Steve ConlinIS Comprehensive
Specialist608-266-6947
Janette GosdeckAccountant Objective
608-267-9218
Karen KucharzConsultant
608-267-9707
Gene ForneckerAuditor
608-267-7882
Kathy GuralskiAuditor
608-266-3862
Lori AmesConsultant
608-266-3464
Finance Team….Who Finance Team….Who We AreWe Are
Finance Team….What We Finance Team….What We DoDo
Collect data reports from districts in order to Collect data reports from districts in order to distribute over $6 billion in State Aid and distribute over $6 billion in State Aid and Credits in 2007-08, including $5.4 billion in Credits in 2007-08, including $5.4 billion in General and Categorical Aids (Governor’s General and Categorical Aids (Governor’s Proposal)Proposal)
Provide data to individuals, organizations, Provide data to individuals, organizations, state and federal agenciesstate and federal agencies
Provide consultation services as neededProvide consultation services as needed
Provide a website and training opportunities Provide a website and training opportunities to help people help themselvesto help people help themselves
Finance Team….Finance Team….How We Can Help You How We Can Help You
Web Page Publications & TutorialsWeb Page Publications & Tutorials Phone calls, e-mailPhone calls, e-mail Provide information via our listservProvide information via our listserv
(we recommend you subscribe – see (we recommend you subscribe – see
information under “Mailings/List information under “Mailings/List
Serve” on the green scan bar on Serve” on the green scan bar on
our website)our website)
How We Can Help YouHow We Can Help You
Spring Finance Workshops - AprilSpring Finance Workshops - April State Superintendent’s Workshop - State Superintendent’s Workshop -
SeptemberSeptember ““Getting It Right” Workshop - OctoberGetting It Right” Workshop - October January WASB/WASDA/WASBO January WASB/WASDA/WASBO
ConventionConvention Various WASBO and WASDA Seminars Various WASBO and WASDA Seminars
throughout the yearthroughout the year
How We Can Help YouHow We Can Help You
Bookmark this page !!!!!Bookmark this page !!!!!
http://http://dpi.wi.gov/sfs/index.htmldpi.wi.gov/sfs/index.html
Let’s Look at the Let’s Look at the Handouts…Handouts…
Roadmap of the School Financial Roadmap of the School Financial Services WebsiteServices Website
Sample District Percentage + Sample District Percentage + Full Computation WorksheetsFull Computation Worksheets
District-Specific 06-07 District-Specific 06-07 Percentage Method Equalization Percentage Method Equalization Aid Worksheet Aid Worksheet
Slides from Power Point Slides from Power Point PresentationPresentation
2007-08 EST GENERAL 2007-08 EST GENERAL AIDAID
Equalization AidEqualization Aid $4,535,649,28$4,535,649,2800
98%98%
Special Special Adjustment AidAdjustment Aid
$ 13,638,817 $ 13,638,817 .3%.3%
Inter-District AidInter-District Aid $ 34,392,839$ 34,392,839 .7%.7%
Intra-District AidIntra-District Aid $ 50,572,122$ 50,572,122 1%1%
Total General AidTotal General Aid $4,634,253,05$4,634,253,0588
100%100%
Equalization AidEqualization Aid Why do you need to know how to calculate Why do you need to know how to calculate
aid when DPI calculates it for you?aid when DPI calculates it for you?• Because you will be asked by your board Because you will be asked by your board
members, constituents and the media.members, constituents and the media.• So you can make sure we are using the So you can make sure we are using the
data you think we are, and, if your aid data you think we are, and, if your aid amount changes, figure out why.amount changes, figure out why.
• Because you may want to do estimates Because you may want to do estimates and “what ifs”…and “what ifs”…
The state’s aid formula is a The state’s aid formula is a guaranteed tax base, sometimes called guaranteed tax base, sometimes called a “power equalization” formula. Once a “power equalization” formula. Once
the state “pot” of money is set, the the state “pot” of money is set, the formula uses district membership, formula uses district membership, shared cost and property value to shared cost and property value to
determine aid. determine aid.
In theory, the higher the value of a In theory, the higher the value of a district, district,
the less aid it will receive.the less aid it will receive.
And, the more a district spends And, the more a district spends above the secondary cost ceiling, the above the secondary cost ceiling, the smaller percent of the cost will get smaller percent of the cost will get
aided. aided.
Equalization AidEqualization Aid
Congratulations, it’s your lucky day!Congratulations, it’s your lucky day!
YOU ARE ELIGIBLE YOU ARE ELIGIBLE FOR UP TO $10,000 FOR UP TO $10,000
IN COLLEGE SCHOLARSHIPIN COLLEGE SCHOLARSHIP MONEY!!! MONEY!!!
(Not really. We’ll eventually connect this(Not really. We’ll eventually connect thisfake give-away to Equalization Aid.)fake give-away to Equalization Aid.)
Equalization Aid - How It Equalization Aid - How It WorksWorks
$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000
SCHOLARSHIP EXAMPLE VACATION
20% 80%50% 50%
Equalization Aid - How It Equalization Aid - How It WorksWorks
How Did the College “Share” How Did the College “Share” in the Tuition?in the Tuition?
Compute actual scholarship amount.
What you could pay.
$10,000 amount.
Compare, then
Equalization Aid Equalization Aid FormulaFormula
State “Shares” in District CostState “Shares” in District Cost Aid is Based on a District’s Ability to Aid is Based on a District’s Ability to
Pay, as Measured by Property Wealth Pay, as Measured by Property Wealth per Memberper Member
Basic premise: The more property wealth per member a
district has, the less state aid it will receive.
How Does the State “Share”How Does the State “Share”in District Costs?in District Costs?
Compute Equalized Aid
State GuaranteedValue Per Member
Compare, then
District Value Per Member
3 District Factors3 District Factors
1. Costs (“Shared Cost”)1. Costs (“Shared Cost”)
2. Wealth/Property Taxbase2. Wealth/Property Taxbase
3. Pupils (“Membership”)3. Pupils (“Membership”)
* * ** * *
All All PriorPrior-Year Data-Year Data
(2006-07 data is used for 2007-08 (2006-07 data is used for 2007-08 aid.)aid.)
Total General Fund (Fund 10) Total General Fund (Fund 10) ExpendituresExpenditures
plus (+)plus (+)Total Debt Service Funds (Funds Total Debt Service Funds (Funds
38 & 39) Expenditures38 & 39) Expendituresminus (-)minus (-)
all local misc. revenue, grant all local misc. revenue, grant revenue,revenue,
and categorical aid. and categorical aid.
Known as “Shared Cost”Known as “Shared Cost”
1. District Factor – 1. District Factor – CostsCosts
(prior year)(prior year)
2. District Factor - 2. District Factor - Wealth/TaxbaseWealth/Taxbase
(prior year)(prior year)
Property Taxbase is Used to Property Taxbase is Used to
Determine Wealth and Ability to Determine Wealth and Ability to
Support District ExpendituresSupport District Expenditures
Uses Equalized Valuation Uses Equalized Valuation
or Fair Market Valueor Fair Market Value
((NOTNOT Assessed Value) Assessed Value)
3. District Factor – Membership3. District Factor – Membership (prior year) (prior year)
F.T.E. = full-time equivalentF.T.E. = full-time equivalent2 halftime (.50) kdg students = 1 F.T.E.2 halftime (.50) kdg students = 1 F.T.E.
Average of 3rd Friday F.T.E. - September
2nd Friday F.T.E. - January
plus (+) F.T.E. Summer School
(2007-08 aid uses Summer 2006,(2007-08 aid uses Summer 2006,
September 2006, and January 2007 numbers.)September 2006, and January 2007 numbers.)
Summer School = 48,600 minutes = 1 F.T.E.
Aid membership also includes:Aid membership also includes:-- Youth Challenge StudentsYouth Challenge Students-- Second Chance Partnership StudentsSecond Chance Partnership Students-- Part-time Attendance F.T.E. of Part-time Attendance F.T.E. of
Private/Home-Schooled Students Private/Home-Schooled Students-- Foster Group Home StudentsFoster Group Home Students
See:See:http://www.dpi.state.wi.us/sfs/membrpt2.htmlhttp://www.dpi.state.wi.us/sfs/membrpt2.html
MembershipMembership
MembershipMembershipWho can you count for aid membership?Who can you count for aid membership?
Generally, residents for which you are Generally, residents for which you are financiallyfinancially responsible - i.e. you are paying for the student’s responsible - i.e. you are paying for the student’s education.education.
- - Start with who is in your seats on the count date.Start with who is in your seats on the count date.- Add in your residents who are elsewhere (and for - Add in your residents who are elsewhere (and for which you are financially responsible).which you are financially responsible).- Subtract non-residents being educated in your - Subtract non-residents being educated in your seats. seats. - Watch for the “before and after” rule. - Watch for the “before and after” rule.
((Count the student if he/she was present for instruction at
least one day before the count date and at least one day after, and didn’t change residency during the period of absence.)
MembershipMembership
Who is a Resident? Not defined by statute – residency is determined by the local district.
1.) Is the child living in the district with his/her parents?2.) What about other situations?
– there is case law - i.e. - Thayer Ruling A minor may have, for school purposes, a residence other than that of his parents.
In this specific case, the school district was incidental to the child’s reason for living in the district.
Use common sense…WHY are they there?
Who is paying for the education? Pupil is in your seats, taught by your teachers.Pupil is in your seats, taught by your teachers. Full-time resident pupils in attendance elsewhere, Full-time resident pupils in attendance elsewhere,
but your district is paying for their education. but your district is paying for their education. • Open EnrollmentOpen Enrollment• Tuition AgreementsTuition Agreements• CESA ProgramsCESA Programs• Tuition Waivers (Be careful with this one. These Tuition Waivers (Be careful with this one. These
situations involve kids moving out/in of a situations involve kids moving out/in of a district mid-year. Sometimes, you still can district mid-year. Sometimes, you still can count a kid in the year that they have moved out count a kid in the year that they have moved out of your district….and, sometimes you can’t of your district….and, sometimes you can’t count a new kid that is in your seats if a recent count a new kid that is in your seats if a recent move has occurred. Please call us if you have a move has occurred. Please call us if you have a student in this situation.)student in this situation.)
MembershipMembership
Crucial Statistic:
Value per Member = Total Equalized Value ÷ Membership
Value Per MemberValue Per Member
01,0002,0003,0004,0005,0006,0007,0008,000
9,00010,00011,00012,00013,00014,00015,00016,00017,000
DISTRICT VALUE PER MEMBER
DIS
TR
ICT
SH
AR
ED
CO
ST
PE
R M
EM
BE
R
Positive Primary Aid
Positive Secondary Aid
Positive Tertiary Aid
Equalization Aid – 3 Levels
District Value per Member
10% 90%
83%17%
50%50%Negative Tertiary Aid
Negative Secondary Aid
No Aid
TIER 1 CALCULATIONTIER 1 CALCULATIONSample District – Positive Sample District – Positive
AidAid200,00200,00
00
2,000,2,000,00000010.00% x $1,000 = $100.00 10.00% x $1,000 = $100.00 DistrictDistrict
90.00% x $1,000 = $900.0090.00% x $1,000 = $900.00 State Aid State Aid
= 10.00%
$900 x membership = 1st Tier Aid
$900 x 500 = $450,000
(Compare to G5)
TIER 2 CALCULATIONTIER 2 CALCULATIONSample District – Positive Sample District – Positive
AidAid200,00200,00
00
1,200,1,200,000000
= 16.67%
16.67% x $7,000 = $1,166.67 16.67% x $7,000 = $1,166.67 DistrictDistrict
83.33% x $7,000 = $5,833.3383.33% x $7,000 = $5,833.33 State AidState Aid
$5,833.33 x membership = 2nd Tier Aid
$5,833.33 x 500 = $2,916,667
(Compare to G10)
TIER 3 CALCULATIONTIER 3 CALCULATIONSample District – Positive Sample District – Positive
AidAid200,00200,00
00
400,00400,0000
= 50.00%
50.00% x $3,000 = $1,500.00 50.00% x $3,000 = $1,500.00 DistrictDistrict
50.00% x $3,000 = $1,500.0050.00% x $3,000 = $1,500.00 State AidState Aid
$1,500.00 x membership = 3rd Tier Aid
$1,500.00 x 500 = $750,000
(Compare to G15)
TOTAL EQUALIZATIONTOTAL EQUALIZATIONSample District – Positive Sample District – Positive
AidAid
Tier 1 = Tier 1 = $450,000$450,000
Tier 2 = Tier 2 = $2,916,6$2,916,66767
Tier 3 = Tier 3 = $750,000$750,000
Total Total Equalization = Equalization =
$4,116,6$4,116,66767
COST SHARING COST SHARING PERCENTAGEPERCENTAGE
Sample District – Positive Sample District – Positive AidAid
Total Total Equalization AidEqualization Aid
Total Shared CostTotal Shared Cost
= 74.8%
$4,116,$4,116,667667
$5,500,$5,500,000000
EQUALIZATION AIDEQUALIZATION AIDSample District – Positive Sample District – Positive
AidAid
The aid amount of $4,116,667 is further The aid amount of $4,116,667 is further reduced by a deduction for the Milwaukee reduced by a deduction for the Milwaukee Charter program and any prior-year aid Charter program and any prior-year aid adjustment.adjustment.
TIER 1 CALCULATIONTIER 1 CALCULATIONSample District – Negative Sample District – Negative
AidAid
600,00600,0000
2,000,2,000,00000030.00% x $1,000 = $300.00 30.00% x $1,000 = $300.00 District District
70.00% x $1,000 = $700.0070.00% x $1,000 = $700.00 State Aid State Aid
= 30.00%
$700 x membership = 1st Tier Aid
$700 x 500 = $350,000
TIER 2 CALCULATIONTIER 2 CALCULATIONSample District – Negative Sample District – Negative
AidAid600,00600,00
00
1,200,1,200,000000
= 50.00%
50.00% x $7,000 = $3,500.00 50.00% x $7,000 = $3,500.00 DistrictDistrict
50.00% x $7,000 = $3,500.0050.00% x $7,000 = $3,500.00 State AidState Aid
$3,500.00 x membership = 2nd Tier Aid
$4,083.10 x 500 = $1,750,000
TIER 3 CALCULATIONTIER 3 CALCULATIONSample District – Negative Sample District – Negative
AidAid600,00600,00
00
400,00400,0000
= 150.00%
150.00% x $3,000 = $4,500.00 150.00% x $3,000 = $4,500.00 DistrictDistrict
-50.00% x $3,000 = $-1,500.00-50.00% x $3,000 = $-1,500.00 State AidState Aid
$-1,500.00 x membership = 3rd Tier Aid
$-1,500.00 x 500 = $-750,000
TOTAL EQUALIZATIONTOTAL EQUALIZATIONSample District – Negative Sample District – Negative
AidAid
Tier 1 = Tier 1 = $350,000$350,000
Tier 2 = Tier 2 = $1,750,0$1,750,00000
Tier 3 = Tier 3 = $-$-750,000750,000
Total Total Equalization = Equalization =
$1,350,0$1,350,00000
COST SHARING COST SHARING PERCENTAGEPERCENTAGE
Sample District – Negative Sample District – Negative Aid Aid
Total Total Equalization AidEqualization Aid
Total Shared CostTotal Shared Cost
= 32.79%
$1,350,$1,350,000000
$4,116,$4,116,667667
EQUALIZATION AIDEQUALIZATION AIDSample District – Negative Sample District – Negative
AidAid
The aid amount of $1,350,000 is further The aid amount of $1,350,000 is further reduced by a deduction for the Milwaukee reduced by a deduction for the Milwaukee Charter program and any prior-year aid Charter program and any prior-year aid adjustment.adjustment.
01,0002,0003,0004,0005,0006,0007,0008,000
9,00010,00011,00012,00013,00014,00015,00016,00017,000
DISTRICT VALUE PER MEMBER
DIS
TR
ICT
SH
AR
ED
CO
ST
PE
R M
EM
BE
R
Positive Primary Aid
Positive Secondary Aid
Positive Tertiary Aid
Equalization Aid – 3 Levels
Negative Tertiary Aid
Negative Secondary Aid
No Aid
How can I determine where I am in the How can I determine where I am in the aid formula?aid formula?
Aid Formula Position on the WebsiteAid Formula Position on the Website
http://http://www.dpi.wi.gov/sfs/index.htmlwww.dpi.wi.gov/sfs/index.html
Under:Under:
Budget Development and PlanningBudget Development and Planning
Equalization AidEqualization Aid
So, how does this work for my district?So, how does this work for my district?
Percentage Method on the WebsitePercentage Method on the Website
http://http://www.dpi.wi.gov/sfs/index.htmlwww.dpi.wi.gov/sfs/index.html
Under:Under:
Budget Development and PlanningBudget Development and Planning
Equalization AidEqualization Aid
How can I explain changes in my How can I explain changes in my district’s aid?district’s aid?
7-Year History on the Website7-Year History on the Website
http://http://www.dpi.wi.gov/sfs/index.htmlwww.dpi.wi.gov/sfs/index.html
Under:Under:
Budget Development and PlanningBudget Development and Planning
Equalization Aid – Equalization Aid – Explaining Changes Across TimeExplaining Changes Across Time
How can I figure aid estimates?How can I figure aid estimates?
Simplified Percentage Method Simplified Percentage Method
of Estimating Equalization Aidof Estimating Equalization Aid
http://http://www.dpi.wi.gov/sfs/index.htmlwww.dpi.wi.gov/sfs/index.html
Equalization AidEqualization Aid
Equalization Aid,Equalization Aid, Line 12 of Line 12 of the Revenue Limit Worksheetthe Revenue Limit Worksheet
On On October 15, 2007, DPI will certifyOctober 15, 2007, DPI will certify an amount to districts. It is the an amount to districts. It is the amount of aid the districts will amount of aid the districts will receive in 2007-2008receive in 2007-2008
We distributed the July 1We distributed the July 1stst estimate estimate in late June. in late June. Use the July amount on Use the July amount on line 12 of the 2007-08 revenue limit line 12 of the 2007-08 revenue limit worksheet until the October worksheet until the October Certification is issued.Certification is issued.
Questions?Questions?
Visit our web site:
http://dpi.wi.gov/sfs/index.html
Or call:Or call:
Brad Adams, Consultant, 267-3752 Lori Ames, Consultant, 266-3464 Karen Kucharz, Consultant, 267-9707 Jerry Landmark, Assistant Dir., 267-
9209 Gene Fornecker, Auditor, 267-7882 Natalie Rew, Auditor, 267-9212 Kathryn Guralski, Auditor, 266-3862 David Carlson, Director, 266-6968