EDLD 5342 Week 3, Part 2

 

	District #1	District #2
Revenue per WADA @ Compressed Rate	$5,044	$7,206
Total Target Revenue for the M&O Fund	$28,023,505.64	$34,546,111.66
Teachers, Librarians, Nurses, & Counselors	281	307

While part 1 of this assignment showed us how WADA is supposed to help provide equity for the education of students in Texas, part 2 shows us how the Target Revenue System can hinder the progress we are attempting to make.  It is one of the biggest flaws in our funding formula.  

While both of these districts have a compressed M&O rate of 1.00, the discrepancy appears in the revenue per WADA @ Compressed Rate.  District 1’s revenue is 5,044 and District 2’s revenue is 7,206.  When you multiply these figures times the WADA provided in the summary of finance, you can see the discrepancy in the total target revenue for the M&O fund.  District 2, which we have determined is the wealthier district and because of the revenue per WADA @ compressed rate, receives more funding from the state in its general fund.  This district can then turn around and use those funds to hire more staff to work with the students and lower the teacher to student ratio. 

EDLD 5342, Week 3 Part 1

	District #1	District #2
Economically Disadvantaged	93.3%	20.7%
LEP	48%	2%
Special Education	9%	7%
Bilingual/ESL	41%	2%
Vocational Education	24%	14%
Career and Technology	24%	14%
Gifted and Talented	5%	4%
Total Refined ADA Adjusted for Decline	3,893.75	4,032.98
WADA	5, 555.81	4,794.07

District 1 has a refined ADA of 3,893.75 and District 2’s refined ADA is 4,032.94.  Once you calculate WADA for the two, District 1’s WADA is 5,555.81 and District 2’s is 4,794.07.  After reviewing the data, this is a classic example of how WADA is supposed to work.  Even though the two districts only have an enrollment difference of 13 students, the number of students in District 1 that receive special services pushes their WADA to a higher number.  Research has shown that it takes more funds to educate students in these programs.  Therefore, even though District 1 has a lower enrollment, it receives more WADA to help meet the needs of the students in the specialized programs.

Understanding TEA Budgeting Guidelines

Reading the TEA Budgeting Guidelines in one sitting is not something I would recommend to anyone.  There is so much rich information that is provided that you will need time to sit, digest, and reflect on the information presented and this would be better done in multiple sittings.  

Learning about the different budgetary approaches and making myself familiar with the type used in the district will be very beneficial to me.  I must be comfortable with the approach being used and if not, I must be able to initiate change and provide pros and cons for the approach I would like to implement. While the line-item approach is the most traditional, I must be aware of the others just in case I am faced with a different approach at some time.  

The other area I learned quite a bit is in the legal requirements for budgeting.  While the school district’s budget preparation is largely the responsibility of the school board and superintendent, Texas law and TEA legal requirements help pave the way for there to be some uniformity in the state and processes.  There may also be some local requirements that are set as well that help aid in the budgeting process. 

Developing and following a budgeting calendar is a must in the budgeting process.  I really like the format provided in the resource section as it sets out the dates and persons responsible for overseeing that the individual activities be completed in a timely manner.  This also helps with accountability because any little snag in the calendar could be detrimental to the entire process and lead to the superintendent not being able to meet the deadlines that are legally set.  

Learning about the different tiers in the Foundation School Program is something that I will need to further review and become more comfortable with since this is the nuts and bolts of how the district will receive monies from the state and locally.  PEIMS plays an essential part in this process since the required information is gathered through that state system.  If information is not correct in that system, it could also really hamper your district’s ability to collect the funds that it is due to receive.  

Future forecasting in the different areas of revenue, expenditures, capital cost, debt service cost, and operating costs is a data collection and analyzing the budget is challenging, but so vitally important in today’s situation. A district that has the ability to forecast and plan in years to come stands a better chance of overcoming the changes in revenue and keeps them from being in a crises situation.

    The TEA Budget Guidelines is a resource guide that every new superintendent needs to be familiar with and utilize. In such a very complex world of school finance, budgeting and funding is an area that is constantly changing and requires more than just a general understanding of budgeting.

Consensus on top 5 budget events and dates

GROUP SIX's TOP 5 (Wales, Uranga, Watson, Walters)
5) Board of Trustees will establish district goals in January. This is important because district goals will most likely cost the district part of their budget to accomplish the goals. It would not be prudent to go back to the Board at the end of the school year with news that thier goals were not acheived because the Superintnendent did not allocate funds for their goals.

4) Meet with departments and schools in February to determine additional needs or the amount of budget reductions that can be achieved. Since the development of a budget should be a collaborative decision among specific stakeholders, the building principals and department directors need to be, and are, an integral part. They will be able to provide more information on specific needs and estimates. With this information, the Superintendent can effectively prioritize the district needs/estimates in accordance with the revenue available to him.

3) Property tax based revenues are forecasted and given to the district in March/in April. Since a larege part of most district's revenue is based on the amount they receive from this tax base, it is very important, especially when in tough economic times, to get a good estimate on how much you will receive for budget purposes.

2) Board President must call a public meeting of the board of trustees by June 20 giving 10 day notice for the adoption of the district budget. State law mandates a public meeting be conducted so that any taxpayer in the district can attend to hear the proposed budget and have an opportunity to comment.

1) School Board adopts the budget by June 30 (some district's may elect to adopt their budget by August 31). In accordance with State law, a district budget must be adopted and it can not operate without such.

Consensus on basic issues impacting state funding

The three basic issues that affect the state formula are:

1. Property Value Decline (limits loss of funding) When the economy experiences a recession there will be decline in actual property values, this in turn will directly impact the amount of property tax that a school can receive per property. Property taxes are a major factor in school budgets. As property values decline, so does the amount of revenue that can be generated through the main vein of school district's finance. In most urban districts, property values have decreased, due to the lack of economic development and beautification efforts have been non-existent. The suburban flight has left the inner structure of the inner-city reeling due to the fact that most residents are no longer in property that has major value and the amount taxed in most cases is considerably less than in past years. However, the salaries, benefits, and needs of the district have increased. The districts may have less funding to lose as a result, but the gap exists between actual cost and generated capital from property taxes.

2. ADA decline (limits loss of funding) as the amount of students decline, so does the amount of money generated from the state. Urban districts that are experiencing suburban flight have major budget issues due to the loss of ADA funds. Successful school districts have had to make tough decisions over the years as the number of students continue to decline. Major cities such as San Antonio, Dallas and Houston have schools that are under-utilized because the students are no longer living in the boundary. The cost of maintaining the schools outweigh the amount of revenue generated by the ADA and other sources. The school districts have become a victim of their own success. As the students, who are initially served, grow up and out of the school system, the area is not being repopulated with other kids to maintain adequate numbers to justify the amount of capital needed to run the schools (i.e. the school's population was 2700 kids 15 years ago and now they are struggling to get 1200 in the building). The loss of capital due to ADA is major, especially when the cost of running the school is on the steady increase. The suburban districts are not far behind; in 10 - 15 years... they will experience the same dilemma.

3. Compensatory Education -The need for the compensatory education allotment is critical. As our country continues to experience a recession, we have experienced more cases of "situational poverty". As parents lose jobs, their income is affected and students who have never had to suffer are now experiencing a life change. For the first time in their lives they need assistance with free or reduced lunch. The school districts are being caught off guard due to the fact that some children were not considered in the previous year’s Compensatory Education allotment of funds. Funding is based on the number of students reported on the free and reduced lunch count from a district’s best six months of enrollment from the previous year. Situational poverty is acute and it gives little to no warning, and in most cases the state has not funded these students because the poverty may not have occurred until July or August of the current school year. In some cases, the number of students on free and reduced lunch can be under reported. Districts would not receive adequate funding from the Tier 1 allotments. This will impact a district's ability to maintain test scores and meet the minimum standards set forth by the state. Therefore, it is imperative that the numbers are accurate and reported in a timely matter.