Agenda - 05-26-2016 - 2B - Public School Forum Local School Finance Study

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> NOTES ON METHODOLOGY CHARTER SCHOOL ENROLLMENT SALES/ASSESSMENT RATIO The Department of Public Instruction's Division of School Business' In North Carolina,most residential and commercial property is Report on Average Daily Membership and Membership Last revalued once every eight years. Prior to 1984, it was difficult Day by LEA (ADM & MLD) provides estimates of charter school to compare tax wealth and effort because of this impediment enrollment in each county.Adding charter school enrollments to to estimating the market value of property valuations. In 1984, the ADM of the county in which each charter school is located the Department of Revenue completed its first statewide Sales/ produces a base calculation of total ADM for each county. However, Assessment Ratio Study,comparing the market value of recently charter schools may enroll students from across county lines, sold property with its assessed value. Using the ratio of assessed with local funding flowing from each student's district of residence property value to market value,the Department calculated an to the charter school he or she attends(this is different from adjusted property tax rate for each county.The longer it has state ADM funding for charter schools).These cross-district been since a county has undergone reevaluation,the more likely enrollments are not captured by the ADM & MLD report. it is that the market value of property in the county exceeds its assessed valuation. Therefore,the 2016 Local School Finance Study relies on results of a survey of districts conducted by the Division of School Rapidly growing communities have numerous demands on public Business in 2014 to account for all students within each district services,and the demands tend to outstrip land value increases. who attend charter schools.Survey data are provided at the Therefore,to meet the increase in demands for additional services, Office of Charter Schools website for information only and are local officials must either revalue property more often or raise not used for any financial or budget purposes. taxes. In an effort to make this study as accurate as possible,a three-year weighted average is used to calculate the adjusted CAPITAL SPENDING property valuation.This approach is intended to result in more Data from the North Carolina Department of State Treasurer's accurate valuations for small,rural counties where relatively few Report on County Spending on Public School Capital Outlays land transactions might have taken place during any given year. was used to calculate a six-year average of county appropriations OTHER REVENUE SOURCES for capital outlay,interest on debt for school construction,and the net change in capital reserves.Withdrawals from the Public The primary source of local revenue is property taxes. In addition School Building Capital Fund,Grants from the Public School to property taxes,this study includes a county's share of local Building Bond Fund,and the North Carolina Education Lottery option sales taxes and fines and forfeitures.Allotments from the Funds have been removed from the county total.The debt service ADM fund and grants for school construction have been removed includes expenditures for school bond repayment and lease to isolate capital spending. Finally,11 counties have supplemental purchase agreements.The capital outlay is actual spending on school taxes, with additional revenue totaling$62.9 million in capital projects or equipment for buildings. 2013-14. a , . • • y . i ' \ IP rr 14, Y r >12