EQUALIZATION AID WASBO NEW SCHOOL ADMINISTRATORS & BUSINESS SUPPORT STAFF WORKSHOP Stevens Point August 17, 2007 Karen Kucharz School Finance Team

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.)


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.)


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)


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)


AidAid200,00200,00

00

400,00400,0000

= 50.00%



$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


AidAid600,00600,00

00

1,200,1,200,000000

= 50.00%



$3,500.00 x membership = 2nd Tier Aid

$4,083.10 x 500 = $1,750,000


AidAid600,00600,00

00

400,00400,0000

= 150.00%


-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


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


Under:Under:



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


Under:Under:


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



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

Documents

EQUALIZATION AID WASBO NEW SCHOOL ADMINISTRATORS & BUSINESS SUPPORT STAFF WORKSHOP Stevens Point August 17, 2007 Karen Kucharz School Finance Team