EQUALIZATION AID

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EQUALIZATION AID
WASBO NEW SCHOOL ADMINISTRATORS BUSINESS
SUPPORT STAFF WORKSHOP Stevens Point August 17,
2007 Karen Kucharz School Finance Team
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Finance Team.Who We Are
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Finance Team.What We Do

• Collect data reports from districts in order to
  distribute over 6 billion in State Aid and
  Credits in 2007-08, including 5.4 billion in
  General and Categorical Aids (Governors
  Proposal)
• Provide data to individuals, organizations, state
  and federal agencies
• Provide consultation services as needed
• Provide a website and training opportunities to
  help people help themselves

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Finance Team.How We Can Help You

• Web Page Publications Tutorials
• Phone calls, e-mail
• Provide information via our listserv
• (we recommend you subscribe see information
  under Mailings/List Serve on the green scan bar
  on our website)

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How We Can Help You

• Spring Finance Workshops - April
• State Superintendents Workshop - September
• Getting It Right Workshop - October
• January WASB/WASDA/WASBO Convention
• Various WASBO and WASDA Seminars throughout the
  year

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How We Can Help You

• Bookmark this page !!!!!
• http//dpi.wi.gov/sfs/index.html

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Lets Look at the Handouts

• Roadmap of the School Financial Services Website
• Sample District Percentage Full Computation
  Worksheets
• District-Specific 06-07 Percentage Method
  Equalization Aid Worksheet
• Slides from Power Point Presentation

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2007-08 EST GENERAL AID
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Equalization Aid

• Why do you need to know how to calculate aid when
  DPI calculates it for you?
• Because you will be asked by your board members,
  constituents and the media.
• So you can make sure we are using the data you
  think we are, and, if your aid amount changes,
  figure out why.
• Because you may want to do estimates and what
  ifs

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The states aid formula is a guaranteed tax
base, sometimes called a power equalization
formula. Once the state pot of money is set,
the formula uses district membership, shared cost
and property value to determine aid. In
theory, the higher the value of a district, the
less aid it will receive. And, the more a
district spends above the secondary cost ceiling,
the smaller percent of the cost will get aided.
Equalization Aid
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Equalization Aid - How It Works
Congratulations, its your lucky day! YOU ARE
ELIGIBLE FOR UP TO 10,000 IN COLLEGE
SCHOLARSHIP MONEY!!!(Not really. Well
eventually connect thisfake give-away to
Equalization Aid.)

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Equalization Aid - How It Works
20
80
50
50
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How Did the College Share in the Tuition?
What you could pay.
10,000 amount.
Compare, then
Compute actual scholarship amount.
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Equalization Aid Formula

• State Shares in District Cost
• Aid is Based on a Districts Ability to Pay, as
  Measured by Property Wealth per Member

Basic premise The more property wealth per
member a district has, the less state aid it will
receive.
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How Does the State Sharein District Costs?
District Value Per Member
State Guaranteed Value Per Member
Compare, then
Compute Equalized Aid
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3 District Factors

• 1. Costs (Shared Cost)
• 2. Wealth/Property Taxbase
• 3. Pupils (Membership)
• All Prior-Year Data
• (2006-07 data is used for 2007-08 aid.)

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1. District Factor Costs (prior year)
Total General Fund (Fund 10) Expendituresplus
()Total Debt Service Funds (Funds 38 39)
Expendituresminus (-)all local misc. revenue,
grant revenue,and categorical aid. Known as
Shared Cost
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2. District Factor - Wealth/Taxbase(prior year)

• Property Taxbase is Used to
• Determine Wealth and Ability to
• Support District Expenditures
• Uses Equalized Valuation
• or Fair Market Value
• (NOT Assessed Value)

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3. District Factor Membership (prior year)
Average of 3rd Friday F.T.E. - September 2nd
Friday F.T.E. - January plus () F.T.E. Summer
School

• F.T.E. full-time equivalent
• 2 halftime (.50) kdg students 1 F.T.E.

Summer School 48,600 minutes 1 F.T.E.
(2007-08 aid uses Summer 2006, September 2006,
and January 2007 numbers.)
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Membership

• Aid membership also includes
• - Youth Challenge Students
• - Second Chance Partnership Students
• - Part-time Attendance F.T.E. of
  Private/Home-Schooled Students
• - Foster Group Home Students
• See
• http//www.dpi.state.wi.us/sfs/membrpt2.html

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Membership

• Who can you count for aid membership?
• Generally, residents for which you are
  financially responsible - i.e. you are paying for
  the students education.
• - Start with who is in your seats on the count
  date.
• - Add in your residents who are elsewhere (and
  for which you are financially responsible).
• - Subtract non-residents being educated in your
  seats.
• - Watch for the before and after rule.
• (Count the student if he/she was present for
  instruction at
• least one day before the count date and at
  least one day
• after, and didnt change residency during the
  period
• of absence.)

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Membership

• Who is a Resident? Not defined by statute
• residency is determined by the local district.
• 1.) Is the child living in the district with
  his/her parents?
• 2.) What about other situations?
• there is case law - i.e. - Thayer Ruling
• A minor may have, for school purposes, a
  residence other than that of his parents. In
  this specific case, the school district was
  incidental to the childs reason for living in
  the district.
• Use common senseWHY are they there?

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Membership

• Who is paying for the education?
• Pupil is in your seats, taught by your teachers.
• Full-time resident pupils in attendance
  elsewhere, but your district is paying for their
  education.
• Open Enrollment
• Tuition Agreements
• CESA Programs
• Tuition Waivers (Be careful with this one. These
  situations involve kids moving out/in of a
  district mid-year. Sometimes, you still can count
  a kid in the year that they have moved out of
  your district.and, sometimes you cant count a
  new kid that is in your seats if a recent move
  has occurred. Please call us if you have a
  student in this situation.)

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Value Per Member

• Crucial Statistic
• Value per Member
• Total Equalized Value Membership

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Equalization Aid 3 Levels
Positive Tertiary Aid
District Value per Member


Negative Tertiary Aid
50
50


83
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Negative Secondary Aid
Positive Secondary Aid
10
90


Positive Primary Aid
No Aid
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TIER 1 CALCULATIONSample District Positive Aid
10.00

• 10.00 x 1,000 100.00 District
• 90.00 x 1,000 900.00 State Aid

900 x membership 1st Tier Aid 900 x 500
450,000 (Compare to G5)
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TIER 2 CALCULATIONSample District Positive Aid
16.67
16.67 x 7,000 1,166.67 District 83.33 x
7,000 5,833.33 State Aid
5,833.33 x membership 2nd Tier Aid 5,833.33 x
500 2,916,667 (Compare to G10)
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TIER 3 CALCULATIONSample District Positive Aid
50.00
50.00 x 3,000 1,500.00 District 50.00 x
3,000 1,500.00 State Aid
1,500.00 x membership 3rd Tier Aid 1,500.00 x
500 750,000 (Compare to G15)
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TOTAL EQUALIZATIONSample District Positive Aid
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COST SHARING PERCENTAGESample District
Positive Aid
74.8
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EQUALIZATION AIDSample District Positive Aid

• The aid amount of 4,116,667 is further reduced
  by a deduction for the Milwaukee Charter program
  and any prior-year aid adjustment.

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TIER 1 CALCULATIONSample District Negative Aid
30.00

• 30.00 x 1,000 300.00 District
• 70.00 x 1,000 700.00 State Aid

700 x membership 1st Tier Aid 700 x 500
350,000
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TIER 2 CALCULATIONSample District Negative Aid
50.00
50.00 x 7,000 3,500.00 District 50.00 x
7,000 3,500.00 State Aid
3,500.00 x membership 2nd Tier Aid 4,083.10 x
500 1,750,000
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TIER 3 CALCULATIONSample District Negative Aid
150.00
150.00 x 3,000 4,500.00 District -50.00
x 3,000 -1,500.00 State Aid
-1,500.00 x membership 3rd Tier Aid -1,500.00
x 500 -750,000
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TOTAL EQUALIZATIONSample District Negative Aid
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COST SHARING PERCENTAGESample District
Negative Aid
32.79
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EQUALIZATION AIDSample District Negative Aid
The aid amount of 1,350,000 is further reduced
by a deduction for the Milwaukee Charter program
and any prior-year aid adjustment.
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Equalization Aid 3 Levels
Positive Tertiary Aid


Negative Tertiary Aid


Negative Secondary Aid
Positive Secondary Aid


Positive Primary Aid
No Aid
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Equalization Aid

• How can I determine where I am in the aid
  formula?
• Aid Formula Position on the Website
• http//www.dpi.wi.gov/sfs/index.html
• Under
• Budget Development and Planning

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Equalization Aid

• So, how does this work for my district?
• Percentage Method on the Website
• http//www.dpi.wi.gov/sfs/index.html
• Under
• Budget Development and Planning

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Equalization Aid Explaining Changes Across Time

• How can I explain changes in my districts aid?
• 7-Year History on the Website
• http//www.dpi.wi.gov/sfs/index.html
• Under
• Budget Development and Planning

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Equalization Aid

• How can I figure aid estimates?
• Simplified Percentage Method
• of Estimating Equalization Aid
• http//www.dpi.wi.gov/sfs/index.html

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Equalization Aid, Line 12 of the Revenue Limit
Worksheet

• On October 15, 2007, DPI will certify an amount
  to districts. It is the amount of aid the
  districts will receive in 2007-2008
• We distributed the July 1st estimate in late
  June. Use the July amount on line 12 of the
  2007-08 revenue limit worksheet until the October
  Certification is issued.

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Questions?

• Visit our web site
• http//dpi.wi.gov/sfs/index.html

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Or call

• Brad Adams, Consultant, 267-3752
• Lori Ames, Consultant, 266-3464
• Karen Kucharz, Consultant, 267-9707
• Jerry Landmark, Assistant Dir., 267-9209
• Gene Fornecker, Auditor, 267-7882
• Natalie Rew, Auditor, 267-9212
• Kathryn Guralski, Auditor, 266-3862
• David Carlson, Director, 266-6968