Nuances in the Funding Formula

The biggest components of school funding are state aid and local taxes.  State aid is generally calculated off of student numbers. So far this sounds simple but things get more complicated once you fit the major puzzle pieces in.  Some additional areas in which this gets a little more complicated is Special Education funding, PreK Special Ed, Regional Education Association, At Risk, summer school and home school. Each of these items generates Average Daily Membership numbers, or basically increases our student count.

The two simplest ones are special education and the regional education association.  Both of these take our ADM of students attending school and multiple them by a weighting factor.  Presently special education has a weighting factor of 0.082 and the regional education association has a weighting factor of 0.002.  So for special education we get funding for 14.15 students (172.55 X 0.082).  Both of these sources of revenue go directly to other agencies.  The regional education association receives the funding generating from this (MREC) and our special education unit receives the funding generated for special education.  Students who receive special education and are preschool, generate the normal ADM amount plus an additional 0.17 per student.  This amount also goes directly to our special education unit.

Free and Reduced Price School Meals

Free and Reduced Price School Meals

This brings me to the first item that is a bit more complex, At Risk.  This number is generated from a 3 year rolling average of kids on Free and Reduced Priced Lunches in grades 3-8.  At Risk does not utilize the same Average Daily Attendance (ADM) numbers as the above calculations.  Student numbers are taken from Free and Reduced Lunch counts.  Students are added up from grades 3-8 and those students who receive Free and Reduced Lunches are added up.  Over the last three years we’ve had 228 students with 105 of those students being on free and reduced lunch.  This makes for a percentage of Free and Reduced Lunch prices of 46.1 percent.  Multiply this by our average daily membership and you get 79.55 students.   This is the number they use to calculate our funding for at risk students.

Students who are homeschooled in the district can generate revenue if they are district supervised per century code 15.1-23-07.  In stars homeschool students can be assigned to a school and generate an average daily membership.  The average daily membership for homeschool students can then be multiplied by 0.2.   In order to access these dollars these students should be supervised by an employee of the district.

So all of these extra factors get added into our Total Weighted Average Daily Membership. So even though our ADM was 172.55 last year, our total weighted membership was 192.29.  This can make a difference in exactly how much funding is being produced in state aid.

Property Tax

Property Tax

One last caveat.  This funding for per pupil membership has deductions for local revenue.  The first being that all districts in the state of North Dakota have 60 mils factored into their funding formula as being contributed by local taxes.  This is regardless if you are levying 55 mils or 70 mils.  So district get penalized if they levy less than 60 mils for their general fund. Next contributions from local revenue are deducted.  This includes electrical, distribution, transmission, mobile home, in-lieu, and telecommunications taxes.  For these categories 75-100% gets counted towards your local revenue.  Tuition payments you may be receiving from other schools also gets factored into this calculations at 75% counting towards local revenue.  All these sources of local revenue get deducted from the funding formula to calculate the student aid a district may receive.

There are few other details to the exact student aid a district receives, but I will not get into those final pieces in this article.  So how many students we get to count in our funding formula is a bit more complicated than just our Average Daily Membership.  This is all a part of how school finance is calculated.

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