Agenda 05-23-2019 Item 1-B - Public School Forum Local School Finance Study

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ATTACHMENT B > GLOSSARY Ability to Pay:A measure of a county's per student fiscal capacity agreements. Using the Public School Capital Outlay report, to support local public schools.It is a combined measure of withdrawals from the Public School Building Capital Fund and revenue that would have been generated at the state average tax North Carolina Education Lottery Funds have been removed rate based on 2016-17 property valuations per student(adjusted from the county total. to reflect current market prices and to account for differences in income levels)and the value of non-property tax revenues,such as Debt Service per ADM:Six-year average of debt service spending the county's share of local option sales tax,local tax aid(including for a county divided by the ADM for the county. reimbursements for inventory tax revenues,homestead exclusions, Income-Adjusted Total Revenues:The total revenues for a county, food stamp distribution,and the intangibles tax),and fines and forfeitures.Each county's mandated social service payments were minus the amount paid in mandated social security payments, multiplied by the percent of state average per capita income. subtracted from the total adjusted revenues.(See Table 4.) Actual Effort: Includes 2016-17 current expenses(including Low-Wealth Funding:Supplemental state funding intended to supplemental school taxes); reflects the actual dollar effort of enhance instructional programs in counties designated as low- counties to fund local public schools without taking into account wealth based on a formula that examines the ability to generate property wealth.(See Tables 2 and 3.) revenue per student below the state average.In addition,the formula takes into account county adjusted property tax base, Adjusted Tax Base:The total valuation of real,tangible,and public square miles in the county and per capita income. utility property for a county,adjusted using a three-year weighted Mandated Social Services Payments:The amount of money average of the sales assessment ratio. Notes about adjustment and weighted average:In North Carolina,residential and commercial each county pays in the health and human services categories propertytypically is revalued once ever eight ears.The longer it mandated by the state. These categories include public yp y y g y g assistance and Work First services. In previous studies,the has been since properties in a county have been revalued,the more likely it is that the market value of property exceeds the assessed Mandated Social Services Payments reported in Table 4 included county Medicaid payments in addition to other required social valuation.To help remedy this difficulty of estimating the market services payments.For the last two years the Local School value of property valuations,the Department of Revenue computes an adjusted property tax rate for each county by using the ratio of Finance Study has not included Medicaid payments as part of the overall Mandated Social Services Payments.The WD667 report assessed property value to market value.Typically,the longer the from the NC Department of Health and Human Services Office of gap between revaluations,the larger the difference between market and assessed value.In effort to be as accurate as possible,this the Controller,which includes county Medicaid payments, has not study uses athree-year weighted average to calculate the adjusted been available since 2012-13. In almost every county,the Medicaid property valuation. total from the WD667 in previous years was less than 0.5%of 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 enrollment is included(see Charter School Enrollment under"Notes forfeitures,and local tax aid. on Methodology"). Relative Effort:A measure comparing the Actual Effort of a county Capital Outlay:A six-year average of public school capital outlay to its Ability to Pay.In general,low-wealth districts with comparatively using proceeds from local option sales taxes and other sources high spending levels rank highest in this measure.(See Table 5) to fund actual spending on capital projects or equipment for Small County Funding: In 2016-17 supplemental state funding buildings.Withdrawals from the Public School Building Capital was provided to county school districts with ADM less than 3,200. Fund,Grants from the Public School Building Bond Fund,and the This is a change from previous years,when funding was provided North Carolina Education Lottery Funds have been removed from to two categories of local education agencies:those with less the county total. than 3,239 ADM,and those with 3,239-4,080 ADM who have an Capital Outlay per ADM:Six-year average of capital outlay adjusted property tax base less than the state average. spending for a county divided by the ADM for the county. State Average Effective Property Tax:The average of all 100 Current Spending:The most recent current expense appropriation counties'adjusted tax rates. by the county to the public schools,as reported in the audited Supplemental School Taxes:According to GS 115C-501(a), "a financial statement of the local board(s)of education. special tax to supplement the funds from State and county Current Spending per ADM:The total amount of spending for a allotments and thereby operate schools of a higher standard by county divided by the ADM for the county. supplementing any item of expenditure in the school budget." Debt Service: A six-year average of public school debt service Total Current Spending per ADM:The sum of the current expense outlay using proceeds from local option sales taxes and other and the supplemental school taxes for a county,divided by the sources to fund school bond repayments and lease purchase county's ADM. 23<