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> 12 <br />CHARTER SCHOOL ENROLLMENT <br />The Department of Public Instruction’s Division of School Business’ <br />Report on Average Daily Membership and Membership Last Day by <br />LEA (ADM & MLD) provides estimates of charter school enrollment <br />in each county. Adding charter school enrollments to the ADM of the <br />county in which each charter school is located produces a base <br />calculation of total ADM for each county. However, charter schools <br />may enroll students from across county lines, with local funding <br />flowing from each student’s district of residence to the charter <br />school he or she attends (this is different from state ADM funding for <br />charter schools). These cross-district enrollments are not captured <br />by the ADM & MLD report. <br />Therefore, the 2018 Local School Finance Study relies on results of a <br />survey of districts conducted by the Division of School Business in <br />2016 to account for all students within each district who attend <br />charter schools. Survey data are provided at the Office of Charter <br />Schools website for information only and are not used for any <br />financial or budget purposes. <br />CAPITAL SPENDING <br />Data from the North Carolina Department of State Treasurer’s <br />Report on County Spending on Public School Capital Outlays was <br />used to calculate a six-year average of county appropriations for <br />capital outlay, interest on debt for school construction, and the <br />net change in capital reserves. Withdrawals from the Public <br />School Building Capital Fund, Grants from the Public School <br />Building Bond Fund, and the North Carolina Education Lottery <br />Funds have been removed from the county total. The debt service <br />includes expenditures for school bond repayment and lease <br />purchase agreements. The capital outlay is actual spending on <br />capital projects or equipment for buildings. <br />SALES/ASSESSMENT RATIO <br />In North Carolina, most residential and commercial property is <br />revalued once every eight years. Prior to 1984 it was difficult to <br />compare tax wealth and effort because of this impediment to <br />estimating the market value of property valuations. In 1984 the <br />Department of Revenue completed its first statewide Sales/ <br />Assessment Ratio Study, comparing the market value of recently <br />sold property with its assessed value. Using the ratio of assessed <br />property value to market value, the Department calculated an <br />adjusted property tax rate for each county. The longer it has been <br />since a county has undergone reevaluation, the more likely it is <br />that the market value of property in the county exceeds its <br />assessed valuation. <br />Rapidly growing communities have numerous demands on public <br />services, and the demands tend to outstrip land value increases. <br />Therefore, to meet the increase in demands for additional <br />services, local officials must either revalue property more often <br />or raise taxes. In an effort to make this study as accurate as <br />possible, a three-year weighted average is used to calculate the <br />adjusted property valuation. This approach is intended to result in <br />more accurate valuations for small, rural counties where <br />relatively few land transactions might have taken place during <br />any given year. <br />OTHER REVENUE SOURCES <br />The primary source of local revenue is property taxes. In <br />addition to property taxes, this study includes a county’s share <br />of local option sales taxes and fines and forfeitures. Allotments <br />from the ADM fund and grants for school construction have <br />been removed to isolate capital spending. Finally, 11 counties <br />have supplemental school taxes, with additional revenue <br />totaling $62.2 million in 2015-16. <br />> NOTES ON METHODOLOGY