A Look at Basic Education Funding for FY 15-16 and FY 16-17 PASBO Web Forum April 29, 2016 Jay Himes, Executive Director Hannah Barrick, Director of Advocacy

Caveats There are some things we know about 15-16, and some things we can predict about 16-17… There are lots of things we don’t know and can’t predict See spreadsheet at: http://www.pasbo.org//Files/BEF.RTL.SEF.1516.xlsx SPREADSHEET NUMBERS ARE NOT FINAL…BUT THEY ARE LIKELY CLOSE.

We know what the formulas are for BEF, SEF and RTL… Things We Know About… We know what the formulas are for BEF, SEF and RTL…

Things We Know About… 15-16 RTL distribution is straightforward Districts already received all 15-16 RTL dollars BUT…the distribution has now changed $50 million increase is distributed pro-rata based on 14-15 RTL distribution Reconciliation in June 16-17 RTL ???

Things We Know About… Basic Education Funding Base year is 14-15 Total student count (3 year avg ADMs) Weights for poverty, ELLs, CS ADMs Sparsity/size adjustment Median Household Income Index multiplier Local Effort Capacity Index multiplier Each district receives pro rata share of all dollars above the base year (14-15)

Things We Know About… Special Education Funding Total weighted student count (3 cost categories per Act 16 data) Adjusted by 3 factors: Sparsity/size adjustment Equalized millage multiplier Aid ratio multiplier Each district receives pro rata share of all dollars above the base year (13-14)

Things We Know About… The new BEF formula uses new data sources Federal census data State data not used in BEF distributions previously New metrics derived from the new data sources There are also traditional data elements used in the new BEF & SEF formulas Market Values (STEB) Personal Income (Department of Revenue) Aid Ratio ADMs

Things We Know About… 15-16 BEF and SEF distributions are still not set in stone data-wise Original PDE spreadsheets were developed using data from the previous year. State Tax Equalization Board MV Error (Keystone Opportunity Zones) Don’t use data from previous spreadsheets

Things We Know About… Past PDE practice indicates these data elements will be updated with the most recent data available. If so… New SEF formula distribution will change based on updated data elements—revised MV impacts aid ratio and equalized mills data New BEF formula distribution will change based on updated data elements—updated ADMs (SD & CS)

Things We Are Not Sure About… No history of use of the new elements in BEF formula What data elements in the new formulas are still subject to change for 15-16? We think the most major change will be use of 14-15 actual ADMs for SDs and CSs What effect updating data elements will have on FY 15-16 BEF and SEF? We think the impact of any additional changes is likely minimal

Things We Are Not Sure About… A useful number for your 16-17 BEF Governor’s Number in February was a $200 million increase But broad-based tax increases are likely off the table for 16-17 So…$________ is a reasonable guesstimate

Good News

Recap 15-16 BEF numbers you get on Monday will NOT be final (but PDE won’t produce another spreadsheet) Reconciliation will occur, as usual, in June We don’t think there will be any MAJOR changes (just minimal changes due to updated data over the next couple of weeks)

Can I just prorate BEF and SEF from the PDE spreadsheets for my budget? NO. Proration will only work in this magic moment when the 15-16 and 16-17 formulas are using the SAME data…we presume that the data elements to be used for 16-17 will be updated. AND…remember that ALL BEF after 14-15/ALL SEF after 13-14 will be redistributed through the formulas each year.

Questions and Answers