MFP 101: Seven Easy Steps to Understanding the Minimum Foundation Program Formula

2. MFP 101: Seven Easy Steps to Understanding the Minimum Foundation Program Formula LEADS Conference July 26, 2006

3. MFP Purpose • Determine the cost of a minimum foundation program of education in the State • Equitably distribute State funds to local school systems

4. Level 1 - How It Works • Determines cost of education in every school district • Cost = Weighted Student Count times Weighted Per Pupil Amount • At-Risk, Vocational Education, Special Education, and Gifted/Talented Students plus Small Districts weighted to provide extra funding

5. Student Characteristics & Weights Oct. 1 Membership 1.00 Voc-ed Units .05 At-Risk Students .17 plus plus Special Education Gifted & Talented .60 Special Education Other Exceptionalities 1.50 plus plus Economy of Scale Max .20 plus = TOTAL WEIGHTED MEMBERSHIP

6. Total Level 1 Costs Total Weighted Membership times Base Per Pupil Amount TOTAL LEVEL 1 COSTS

7. Level 1 - How It Works (cont’d) • Determines proportion of total cost to be shared between State and local systems • Local school district share based on local sales and property tax capacity • On average, State provides 65% and local districts provide 35% of cost • Actual percentage varies by district according to district’s wealth

8. Fiscal Capacity Property and Sales Tax Revenues plus Other Revenues Total Fiscal Capacity Divided by Students Equals Fiscal Capacity Per Pupil Equals

9. Local Wealth Factor Fiscal Capacity Per Pupil State Average Fiscal Capacity Per Pupil Divided by Local Wealth Factor Equals

10. Local Equalization Factor Local Wealth Factor Weighted Proportion of State Membership Times Local Equalization Factor Equals

11. Local Support of Level 1 Costs LocalEqualization Factor Total Level 1 Costs times times 35% Local Support of Level 1 Costs

12. State Support of Level 1 Costs Total Level 1 Costs less Local Support of Level 1 Costs State Support of Level 1 Costs

13. Level 2 - How It Works • Rewards local school systems that contribute a greater portion towards the cost of education through raising local tax revenues • Approximately 40 cents on the dollar up to a maximum amount

14. Determining the Level 2 Limit Total Level 1 Costs times 33% Limit of State Level 2 Support

15. Determining Local Revenue Eligible for Level 2 Funding Total Local Revenue less Level 1 Local Revenue Local Revenue above Level 1

16. Level 2 – Reward Funding Eligible Revenue (lesser of Local Revenue Above Level 1 or Local Revenue Limit) 40% of Equalized Local Wealth Factor 1-[(1-.40)X LWF)] times equals Level 2 Funding

17. Level 3 - How It Works • Includes continuation funding for items such as prior across the board teacher pay raise, prior support worker pay raise, salaries for foreign associate teachers, and hold harmless funding

18. MFP – Use of Funds • MFP is a block grant from the State to local school districts • Funds not earmarked for specific purposes • Provides flexibility to school districts in spending funds as long as program requirements are met

19. Instructional Expenditure Requirement • Districts must ensure 70% of general fund expenditures are on instructional activities • Instruction includes: classroom instruction, pupil support, instructional staff services, and school administration activities • FY 06-07 formula adds school administration to capture principals and assistant principals

20. Instructional Expenditure Requirement • All expenditure categories directly touch the student • Restricts educational school expenditures to school building level only (new to FY06-07 formula) • Central office expenditures will not be considered when measuring the 70% requirement

21. FY 2006-2007 Certificated and Non-Certificated Pay Raise • Certificated Pay Raise of $1,500 • Plus 15.8% for the employer share of retirement • Non-certificated/Support Worker Pay Raise of $500 • Plus 17.7% for the employer share of retirement

22. FY 2006-2007 Certificated and Non-Certificated Pay Raise • Initial allocation based on Spring 2006 PEP Data • Actual allocation will be based on October 2, 2006 PEP Data collection • Add to salary schedules by August 1, 2006 and begin paying out raises

23. Certificated Pay Raise Requirement • Provides that 50% of a district’s increased funds provided in Levels 1 and 2 over the prior year (“growth funds”) shall be used only to supplement and enhance full-time certificated staff salaries and retirement benefits. • “Growth funds” are adjusted for increases in student membership • Exempts districts with teacher salaries above the SREB average ($42,291) from the 50% pay raise requirement • Applies to DeSoto, St. James, and West Feliciana

24. Mid-year Supplemental Funding • Mid-year Supplemental Funding • Student Increases: provided if increase in students = 50 students or 1% of student population • Provides for two mid-year adjustments • May 1, 2006 compared to October 2, 2006 • (Increase times per pupil amount) • October 2, 2006 compared to February 1, 2006 • (Increase times one-half of per pupil amount)

25. Additions to FY2006-2007 MFP • Provides for $80 per student for Mandated Costs (increased from $60 in FY05-06 revised budget letter) • Provides for 15% cap in sales tax base for purposes of calculating the Local Wealth Factor (reduced from 20% cap) • Adds students with Limited English Proficiency to the at-risk student count

26. FY2006-2007 MFPProvisions for Storm Impacted Districts • Applicable to: • City of Bogalusa • Cameron • Jefferson • Orleans • Plaquemines • St. Bernard

27. FY2006-2007 MFPProvisions for Storm Impacted Districts • Uses a minimum percentage of October 1, 2004 student count for funding • Allows for greater budgetary stability • Adjusts FY2004-2005 local revenues by the same percentage set for student minimums • Provides stability to Local Wealth Factor

28. Critical Dates - October • SIS • Count Date = as of 10.2.06 • Close Date = 10.31.06 • PEP • Count Date = as of 10.2.06 • Close Date = 10.11.06 • Impacts funding for mid-year adjustment for student growth and allocations for certificated and non-certificated pay raises

29. Critical Dates - October • SER • Close Date = 10.31.06 • Data will be used for IDEA reporting • Snapshot taken as of 10.31.06 • No impact to MFP payments

30. Critical Dates - February • SIS • Count Date = as of 2.1.06 • Close Date = 2.28.06 • SER • Snapshot taken on 2.28.06 • SIS impacts funding for second mid-year student growth adjustment • SIS and SER become official count for FY07-08 MFP Formula funding!!!

31. Critical Dates - LEADS • LEADS • Class schedule data = as of 10.2.06 • Close Date = 12.8.06 • LEAs may begin transmission of class schedule data during October 2 SIS and PEP submissions • Becomes official voc ed count for FY07-08 MFP Formula funding!!!

32. Contact Information • Beth Scioneaux • beth.scioneaux@la.gov • 225-342-4989 • Charlotte Stevens • charlotte.stevens@la.gov • 225-342-3590

33. Helpful Web Links • MFP Webpage: • http://www.louisianaschools.net/lde/finance/673.html • MFP Payments: • http://www.louisianaschools.net/lde/appropriation/908.html • Data Collection Systems: • http://www.louisianaschools.net/lde/pair/638.html