- Norman Public Schools
- School Finance FAQs
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1. Why are public schools experiencing a funding crisis?
The funding crisis originally brought about by economic factors has continued due to legislative actions. The initial downturn coincided with the recession that began in 2008. State revenues dropped dram atically and most agency budgets, including education, were cut significantly. However, the federal government provided stimulus funding for education to protect programs for economically disadvantaged and special education students and also provided additional funding to retain jobs. These measures were intended to provide stability while state economies recovered. When the one-time federal money was exhausted, the expectation was that the state would be able to restore funding to pre-recession levels to avoid a “funding cliff.” Even though the Oklahoma economy has shown significant recovery , state revenues could be augmented by addressing tax cuts and incentives. Legislative priorities have shifted and education funding has not been restored. The 2013-14 common education budget is 33.8% of state appropriations, down from 34.4% in 2012-13 and 35.3% in 2011-12. In fact, common education is receiving its smallest percentage of state appropriations since 1999-00 . Meanwhile statewide enrollment has increased by approximately 30,000 students since 2009.
Another dynamic to the situation is that there has been a shift within the State Department of Education budget away from funding state aid for operations toward reform measures and line items. As an example, this year the common education budget increased $74 million, but only $21.5 million was allocated as state aid for operations and $52.5 million was allocated for reforms, line items, and specific programs. School districts have been experiencing increases in basic operational costs due to student population growth and price inflation and desperately need funding for operations.
Also impacting funding on the local level , ballot initiatives such as SQ766 eliminating taxation on intangible personal property and SQ 758 lowering the annual cap for property valuation increases have limited school districts’ revenue potential from local property taxes. Even with prudent management of federal stimulus money, school districts are experiencing the “funding cliff” and have had to utilize fund balances just to maintain programs and staffing levels. Further fund balance reductions cannot be incurred without jeopardizing the solvency of the District.
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2. How much is the total state budget for common education?
The 2013-14 common education budget is $2.4 billion. On a statewide enrollment of 681,578 (2012 - 13 count), that results in $3,532.40 per student.
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3. How much benefit are schools getting from lottery money?
Lottery money allocated to common education averages $30 million per year. For 2013-14 lottery money comprised 1.3% of the total common education budget. The net proceeds from the lottery are distributed 45% to common education, 39.5% to higher education, 5.5% to career tech, 5% to the Teachers’ Retirement Revolving Fund, and 5% to the School Consolidation Assistance Fund.
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4. What are the various funds for schools and how can each be spent?
a. General Fund: Basic operational and support services. Includes teacher and support salaries, employee health insurance, instructional supplies and materials, textbooks, transportation expenses, liability and fleet insurance, etc.
b. Building Fund: Maintenance, repair, upkeep and construction of district facilities and grounds, custodial, utilities, furniture and equipment, property insurance, etc.
c. Child Nutrition Fund: Food costs, salaries/benefits of cafeteria staff, purchase and repair of cafeteria equipment, etc.
d. Bond Funds: Acquiring, constructing or improving school sites, equipping buildings, busses and district vehicles, equipment which can include technology, furniture, uniforms, textbooks, software licenses, etc. NO salaries/benefits and NO consumable supplies.
e. Sinking Fund: Bond principal and interest payments ONLY.
f. School Activity Fund: Student and school activities.
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5. What are the sources of general fund revenue?
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6. How does the state aid funding formula work?
The state aid formula allocates operational dollars to school districts based on student counts which are weighted based on student characteristics such as grade level and category (e.g. special education, economically disadvantaged, bilingual, gifted/talented). There are also weights awarded based on district characteristics (e.g. small or isolated) and teacher education and experience. Norman does not receive any benefit for the district and teacher weights. There is also a transportation supplement based on the number of s tudents transported. For Norman , this supplement covers about 17% of the transportation costs. The formula then attempts to “equalize” revenue among districts by “charging” districts for their local revenue collections. Revenue sou rces that are “charged” or subtracted in the state aid calculation include: ad valorem property taxes, motor vehicle collections, gross production taxes, school land earnings, county 4-mill taxes and rural electric coop taxes. The result is that increases in those revenue sources only serve to decrease state aid. Perfect “equalization” would produce the same revenue per weighted student in every district. However, the formula is not “perfect".
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7. How is sequestration affecting federal funding for schools?
Sequestration is a federal budget mechanism by which federal programs are cut 5% each year for 10 years. This affects our programs for economically disadvantaged (Title I) and special education (IDEA) students. Something to note is that the 5% federal level cut is allocated through a formula to the 50 states which in turn is allocated in Oklahoma through another formula to the approximately 540 school districts. The complex allocation formulas produce a different rate of budget cut in each district. In Norman, this first year of sequestration cuts we sustained a 4.14 % cut in our Title I funding . The State Department of Education absorbed the IDEA cuts this year.
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8. What is fund balance and how is it used?
Fund balance (sometimes called “carryover” or “surplus”) is the available balance of a fund that has not been encumbered, or reserved to pay for goods/services. A fund balance is necessary to:
a. Meet payroll and other obligations during the first half of the next fiscal year before tax collections are received. (Ad valorem tax collections occur mainly in late December, January, and April.)
b. Meet any unanticipated expenses.
c. Reserve for known future expenses such as textbook adoptions, new school openings, etc.
d. Withstand revenue shortfalls.
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9. Is there a state - mandated limit on class sizes?
Oklahoma law does mandate maximum class sizes. Most districts now exceed these limits due to inadequate funding to staff at the necessary levels. In response, legislation has passed removing penalties for non-compliance.
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10. How will funding shortfalls impact Norman Schools?
Current estimates are that budget cuts of $2 million will be needed next year in order to meet District obligations and maintain an adequate fund balance. Since 91% of the budget is personnel-related costs, it will be impossible to make reductions of that magnitude without affecting personnel. Positions might be eliminated resulting in larger class sizes and possibly program reductions. Increased school funding in the 2014 legislative session could reduce the budget impact.