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

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> GLOSSARY Ability to Pay:A measure of a county's per student fiscal capacity sources to fund school bond repayments and lease purchase to support local public schools.It is a combined measure of revenue agreements. Using the Public School Capital Outlay report, that would have been generated at the state average tax rate based withdrawals from the Public School Building Capital Fund and on 2013-14 property valuations per student(adjusted to reflect North Carolina Education Lottery Funds have been removed current market prices and to account for differences in income from the county total. levels)and the value of non-property tax revenues,such as the county's share of local option sales tax,local tax aid(including Debt Service per ADM:Six-year average of debt service spending reimbursements for inventory tax revenues,homestead exclusions, for a county divided by the ADM for the county. food stamp distribution,and the intangibles tax),and fines and Income-Adjusted Total Revenues:The total revenues for a county, forfeitures.Each county's mandated social service payments were minus the amount paid in mandated social security payments, subtracted from the total adjusted revenues.(See Table 4.) multiplied by the percent of state average per capita income. Actual Effort: Includes 2013-14 current expenses(including Low-Wealth Funding: Supplemental state funding intended supplemental school taxes); reflects the actual dollar effort of counties to fund local public schools without taking into to enhance instructional programs in counties designated account property wealth.(See Tables 2 and 3.) as low-wealth based on a formula that examines the ability to generate revenue per student below the state average. In Adjusted Tax Base:The total valuation of real,tangible,and public addition,the formula takes into account county adjusted property utility property for a county,adjusted using a three-year weighted tax base, square miles in the county and per capita income. average of the sales assessment ratio. Notes about adjustment Mandated Social Services Payments:The amount of money and weighted average:In North Carolina,residential and commercial each county pays in the health and human services categories property typically is revalued once every eight years.The longer it mandated by the state.These categories include public assistance has been since properties in a county have been revalued,the more and Work First services. In previous studies,the Mandated Social likely it is that the market value of property exceeds the assessed Services Payments reported in Table 4 included county Medicaid valuation.To help remedy this difficulty of estimating the market payments in addition to other required social services payments. value of property valuations,the Department of Revenue computes This year's study does not include Medicaid payments as part of the an adjusted property tax rate for each county by using the ratio overall Mandated Social Services Payments.The WD667 report of assessed property value to market value.Typically,the longer from the NC Department of Health and Human Services Office of the gap between revaluations,the larger the difference between the Controller,which includes county Medicaid payments,was not market and assessed value. In effort to be as accurate as possible, available for the 2013-14 year. In almost every county,the Medicaid this study uses a three-year weighted average to calculate the total from the WD667 in previous years was less than 0.5%of adjusted property valuation. the total Mandated Social Services Payments,which itself is a Average Daily Membership(ADM):The sum of the number of days small piece of the revenue calculation in Table 4. in membership for all students in each county's local public schools, Non-Property Tax Revenue:Sources of revenue for the county divided by the number of school days in the term.City school other than property taxes. Examples include the sales tax,fines/ districts are combined with the county system and charter school forfeitures,and local tax aid. enrollment is included(see Charter School Enrollment under "Notes on Methodology"). Relative Effort:A measure comparing the Actual Effort of a county to its Ability to Pay.In general,low-wealth districts with comparatively Capital Outlay:A six year average of public school capital outlay high spending levels rank highest in this measure.(See Table 5) using proceeds from local option sales taxes and other sources to fund actual spending on capital projects or equipment for buildings. Small County Funding:Supplemental state funding provided Withdrawals from the Public School Building Capital Fund,Grants to two categories of local education agencies:those with less from the Public School Building Bond Fund,and the North Carolina than 3,239 ADM,and those with 3,239-4,080 ADM who have an Education Lottery Funds have been removed from the county total. adjusted property tax base less than the state average. Capital Outlay per ADM:Six-year average of capital outlay State Average Effective Property Tax:The average of all 100 spending for a county divided by the ADM for the county. counties'adjusted tax rates. Current Spending:The most recent current expense appropriation Supplemental School Taxes:According to GS 115C-501(a),"a by the county to the public schools, as reported in the audited special tax to supplement the funds from State and county financial statement of the local board(s)of education. allotments and thereby operate schools of a higher standard by Current Spending per ADM:The total amount of spending for supplementing any item of expenditure in the school budget." a county divided by the ADM for the county. Total Current Spending per ADM:The sum of the current expense and the supplemental school taxes for a county,divided by the Debt Service:A six-year average of public school debt service county's ADM. outlay using proceeds from local option sales taxes and other 19<