Agenda - 05-25-2017 - 1.B Public School Forum Local School Finance Study

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ATTACHMENT B > 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 Day by revalued once every eight years. Prior to 1984 it was difficult to LEA(ADM&MLD)provides estimates of charter school enrollment compare tax wealth and effort because of this impediment to in each county.Adding charter school enrollments to the ADM of the estimating the market value of property valuations. In 1984 the county in which each charter school is located produces a base Department of Revenue completed its first statewide Sales/ calculation of total ADM for each county.However,charter schools Assessment Ratio Study,comparing the market value of recently may enroll students from across county lines,with local funding sold property with its assessed value. Using the ratio of assessed flowing from each student's district of residence to the charter property value to market value,the Department calculated an school he or she attends(this is different from state ADM funding for adjusted property tax rate for each county.The longer it has been charter schools).These cross-district enrollments are not captured since a county has undergone reevaluation,the more likely it is by the ADM&MLD report. that the market value of property in the county exceeds its assessed valuation. Therefore,the 2017 Local School Finance Study relies on results of a survey of districts conducted by the Division of School Business in Rapidly growing communities have numerous demands on public 2015 to account for all students within each district who attend services,and the demands tend to outstrip land value increases. charter schools.Survey data are provided at the Office of Charter Therefore,to meet the increase in demands for additional Schools website for information only and are not used for any services, local officials must either revalue property more often financial or budget purposes. or raise taxes. In an effort to make this study as accurate as possible,a three-year weighted average is used to calculate the CAPITAL SPENDING adjusted property valuation.This approach is intended to result in Data from the North Carolina Department of State Treasurer's more accurate valuations for small, rural counties where Report on County Spending on Public School Capital Outlays was relatively few land transactions might have taken place during used to calculate a six-year average of county appropriations for any given year. capital outlay, interest on debt for school construction,and the OTHER REVENUE SOURCES net change in capital reserves.Withdrawals from the Public School Building Capital Fund,Grants from the Public School The primary source of local revenue is property taxes. In addition Building Bond Fund,and the North Carolina Education Lottery to property taxes,this study includes a county's share of local Funds have been removed from the county total.The debt service option sales taxes and fines and forfeitures.Allotments from includes expenditures for school bond repayment and lease the ADM fund and grants for school construction have been purchase agreements.The capital outlay is actual spending on removed to isolate capital spending. Finally,11 counties have capital projects or equipment for buildings. supplemental school taxes,with additional revenue totaling $63.4 million in 2014-15. 44 ..., f - -,-1 ■ - 44)1 , 1 , , / . • t°;P .; AMII ik, v/ 11 J., egi , 1 --..„...,...._....5,„„„y qv 4 it I „ >12