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Education Funding in Orange County <br />Current Expense Funding Alternatives <br />In order to maintain consistency between the funding formulas, staff made the following assumptions: <br />• Total education funding consists of the following components: debt service, current expense, <br />recurring capital, long range capital, and capital reserves. <br />• All models hold the school districts "harmless" for new students. In other words, special <br />consideration is given to ensuring that there will be no decrease in per pupil funding from year-to- <br />year. <br />• Staff used the past year growth in student enrollment as the base for the next ten years. Student <br />enrollment projections from the North Carolina Department of Public Instruction will not be available <br />until the week of August 30, 1999. <br />• The 1999 -2009 Capital Investment Plan did not include major projects that would require additional <br />debt obligations. Therefore, none of the following models includes additional debt service <br />requirements. <br />Listed below are funding options that staff has explored Appendix A provides a comparison of all models <br />outlined below. <br />Model 1 <br />This model, similar to the formula used by Chatham and Pitt counties, increases the per pupil <br />appropriation by the annual increase in the Consumer Price Index (CPI). (In Chatham County, if the CPI <br />is less than three percent, schools are guaranteed a three percent increase.) This amount is applied to the <br />projected student enrollment. <br />Figure 6. FY 2000 -01 Funding Example if Model 1 Used <br />(Orange County Example <br />1999 -00 Total General Fund Per Pupil Appropriation $3,160 <br />Guaranteed CPI 3.00% <br />2000 -01 Per Pupil Appropriation $3,254 <br />Enrollment Projections 15,705 <br />The following questions related to the Consumer Price Index (CPI) would need to be addressed before <br />this model is implemented: <br />• What CPI source would be used? <br />• What period of time would be used (January to December, July to June,' October to September)? <br />The following chart graphically illustrates the future trend of school funding in Orange County if the <br />Board selected Model 1 (assumes the guaranteed three percent increase). <br />Page 5 of 9 <br />