School Finance Newsletter

School Finance Newsletter



October foundation payments to begin phase-in of budget bill changes

The state’s foundation payments and reports will see significant changes in October, as we begin to implement the funding provisions of the budget bill, House Bill 59. That bill specified that foundation payments were to continue based on fiscal year (FY) 2013 calculations until the effective date of the bill, Sept. 29, but could be updated to the new FY2014 calculations after that date.

We will continue to make the foundation payments on our regular schedule for all entities – traditional districts, community schools, joint vocational school districts, educational service centers and county boards of developmental disabilities. However, not all changes for FY2014 will be implemented in the October payments. Some elements of the formulas, the reports and the data used for the calculations will be phased in with later payments. We will provide more detail in the weeks ahead, but below are descriptions of the phasing-in process:

  • Traditional Districts. The October payments for traditional districts will be calculated using the new FY2014 formulas, and will be presented on the new FY2014 “School Finance Payment Report” rather than the “Bridge Report” from FY2013. The data used for the calculations of the new formula payments will be estimates based on prior year data, and will be explained in the foundation letter. The statement of settlement will continue in the FY2013 format, but the total payment amount will reflect the new FY2014 formula, and other back-up reports will either continue in the FY2013 format or not be available until a later date.
  • Community Schools. The October foundation payment will be calculated using the new FY2014 formulas, using reported FY2014 data for enrollment and FY2013 data for career-technical education, transportation, targeted assistance and economically disadvantaged funding, until FY2014 data become available. The payment report will continue to use the FY2013 format and reflect all FY2013 data, but the statement of settlement will contain an adjustment to bring the payment amount to the updated FY2014 calculation and enrollment.
  • Joint Vocational School Districts (JVSD). JVSDs will continue to receive payments based on what they received in FY2013 and, therefore, corresponding reports and data will reflect FY2013.
  • Educational Service Centers. The October payments primarily will continue to be based on what ESCs received in FY2013, based on FY2013 data and with no change in the report format. However, we will continue to update the “additional service” contracts as they are submitted to the department, and will zero out the supervisory unit and special education extended service calculations starting with October payments, since House Bill 59 eliminated those payments.
  • County Boards of Developmental Disabilities. October payments will be based on what the boards received in FY2013 based on FY2013 data and with no change in the report format. Like educational service centers, preschool special education funding will continue to be paid on the FY2013 (unit-based) formula.
  • Preschool special education payments for traditional districts, educational service centers and county boards of developmental disabilities will be based on FY2013 (unit-based) formulas rather than the FY2014 (pupil-based) formula for at least the first October payment. Please see the next article on the new preschool special education formula and payment methodology.

Update on changes to preschool special education funding and related contracts provided

As noted above, the recently passed state budget contains a new funding formula for preschool special education that replaces unit funding with a per-pupil-based formula described here. Once the new reports, calculations and data are in place, total funding will be annualized to the amount calculated under the new formula. Until then, payments for preschool special education students will be based on funding received in FY2013. Student counts used for funding also will be updated later in the school year based on the December child count.

The new formula requires a new payment methodology where each preschool special education student’s funding will be added to the foundation payment of its resident city, local or exempted village school district. The total amount of such funding will appear on the district’s School Finance Payment Report as “preschool special education funding” under the heading “additional aid items.” If the district desires, it may keep all of that funding and provide services for the students directly. Or, if an educational service center or county board of developmental disabilities educates the preschool student, the funding will be transferred according to options described here. Further information on how to report student and contract information to the department will be provided in upcoming months.