Agenda- 05-14-20; Item 1-A - Public School Forum Local School Finance Study

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zz GLOSSARY Ability to Pay:A measure of a county's per student fiscal Average Daily Membership (ADM):The sum of the number of capacity to support local public schools. It is a combined measure days in membership for all students in each county's local public of revenue that would have been generated at the state average schools,divided by the number of school days in the term. City tax rate based on 2017-18 property valuations per student school districts are combined with the county system and charter (adjusted to reflect current market prices and to account for school enrollment is included(see Charter School Enrollment differences in income levels)and the value of non-property under"Notes on Methodology"). tax revenues,such as the county's share of local option sales tax, local tax aid(including reimbursements for inventory tax revenues, homestead exclusions,food stamp distribution,and Capital Outlay:A six-year average of public school capital outlay the intangibles tax),and fines and forfeitures. Each county's using proceeds from local option sales taxes and other sources mandated social service payments were subtracted from the to fund actual spending on capital projects or equipment for total adjusted revenues.(See Table 4.) buildings.Withdrawals from the Public School Building Capital Fund,Grants from the Public School Building Bond Fund,and the North Carolina Education Lottery Funds have been removed from Actual Effort:Includes 2017-18 current expenses(including the county total. supplemental school taxes); reflects the actual dollar effort of counties to fund local public schools without taking into account property wealth.(See Tables 2 and 3.) Capital Outlay per ADM:Six-year average of capital outlay spending for a county divided by the ADM for the county. Adjusted Tax Base:The total valuation of real,tangible,and public utility property for a county,adjusted using a three-year Current Spending:The most recent current expense weighted average of the sales assessment ratio. Notes about appropriation by the county to the public schools,as reported in adjustment and weighted average: In North Carolina, residential the audited financial statement of the local board(s)of education. and commercial property typically is revalued once every eight years.The longer it has been since properties in a county have been revalued,the more likely it is that the market value of Current Spending per ADM:The total amount of spending for a property exceeds the assessed valuation.To help remedy this county divided by the ADM for the county. difficulty of estimating the market value of property valuations, the Department of Revenue computes an adjusted property tax rate for each county by using the ratio of assessed property Debt Service:A six-year average of public school debt service value to market value.Typically,the longer the gap between outlay using proceeds from local option sales taxes and other revaluations,the larger the difference between market and sources to fund school bond repayments and lease purchase assessed value. In an effort to be as accurate as possible,this agreements.Using the Public School Capital Outlay report, study uses a three-year weighted average to calculate the withdrawals from the Public School Building Capital Fund and adjusted property valuation. North Carolina Education Lottery Funds have been removed from the county total. �f"