702 KAR 3:270. SEEK funding formula.

702 KAR 3:270. SEEK funding formula.

RELATES TO: KRS 156.035, 156.070, 157.320(9), 157.360, 157.370, 157.410, 157.430, 157.440, 157.620, 158.135, 160.470, 160.476

STATUTORY AUTHORITY: KRS 156.070, 156.160

NECESSITY, FUNCTION, AND CONFORMITY: KRS 156.035 and 156.070 set forth the Kentucky Board of Education's plenary powers over the management and control of local school districts and disbursement of state appropriations. KRS 156.160 requires the Kentucky Board of Education to promulgate administrative regulations for the preparation of budgets and salary schedules for the school districts under its management and control. This administrative regulation is necessary to provide guidelines for the calculations to distribute the funds to school districts through the program to Support Education Excellence in Kentucky (SEEK).

Section 1. Definitions. (1) "At-risk student amount" means fifteen (15) percent of the per pupil guaranteed base funding amount calculated pursuant to KRS 157.360(1) times the average of the highest number of approved applications for free meals in each of the eight (8) months (September through May excluding December) of the prior fiscal year and times the number of state agency children served pursuant to KRS 158.135.

(2) "Calculated base SEEK funding" means the guaranteed base funding provided in the biennial budget pursuant to KRS 157.360(1) plus the add-on components of the SEEK calculation including at-risk, home and hospital, exceptional children and transportation per KRS 157.360(2).

(3) "Collection rate" means the tax receipts collected for the prior year divided by the maximum revenue collectible. The maximum revenue collectible shall be the prior year's permissive tax revenue plus the levied rates per $100 of assessed value for real and tangible property and motor vehicles times the prior year assessment of real and tangible property and motor vehicles.

(4) "Debt service outstanding" means the amount of debt service in excess of eighty (80) percent of the allotment for the capital outlay component of SEEK plus the local revenue generated by the five (5) cent equivalent tax levy required to participate in the Facility Support Program of Kentucky under KRS 157.620(1)(a).

(5) "Exceptional child amount" means the December 1 exceptional child count of the preceding fiscal year by exceptionality weighted as follows:

(a) 2.35 times the per pupil base funding amount calculated pursuant to KRS 157.360(1) for students with severe disabilities;

(b) 1.17 times the per pupil base funding amount calculated pursuant to KRS 157.360(1) for students with moderate disabilities; and

(c).24 times the per pupil base funding amount calculated pursuant to KRS 157.360(1) for students with communications disabilities.

(6) "Growth" means the percent change in the second month average daily attendance times the prior year adjusted average daily attendance.

(7) "Home and hospital instruction amount" means the total of the prior year's home and hospital average daily attendance times the per pupil base funding amount calculated pursuant to KRS 157.360(1), less the allotment for capital outlay as set forth in the Biennial Budget.

(8) "Levied equivalent tax rate" means estimated permissive tax revenue plus the current year's levied real estate tax rate, tangible tax rate and motor vehicle tax rate per $100 of assessed value times the current year's assessment of real estate, tangible property and motor vehicles times the prior year's collection rate divided by the total current year's property and motor vehicle assessment.

(9) "Release time" means regularly scheduled time missed by students with school district approval.

(10) "Shared time average daily attendance" means the average daily attendance for nonresident students who attend the district's schools on a part-time basis while enrolled in another district or nonpublic school.

(11) "State equalization amount" means 150 percent of the statewide average per pupil property assessment as provided in the biennial budget.

(12) "Tier I revenue" means revenue produced by a school district tax levy which, when equalized by state funds with the state equalization amount established by KRS 157.440(1)(a), generates up to the maximum revenue allowable under KRS 157.440(1)(a).

(13) "Tier II revenue" means revenue produced by a school district tax levy above the Tier I tax levy which generates no more than the maximum revenue allowable under KRS 157.440(2).

(14) "Transportation funding" means prior fiscal year calculated transportation costs for students in grades primary through twelve (12) transported by school districts as calculated by the Division of Pupil Transportation, Department of Education, pursuant to KRS 157.370 and adjusted by current year second month growth in transported students.

(15) "Vocational educational deduct" means a deduct factor to be applied against the per pupil guaranteed base funding in those instances where a student spends a portion of the school day at a state-operated vocational center.

Section 2. SEEK Calculation Formula. (1) Required data for the SEEK calculation shall include:

(a) Property assessments from the Department of Property Taxation, Revenue Cabinet provided pursuant to KRS 160.470(5);

(b) Tax rates levied by school districts;

(d) Home and hospital average daily attendance reported by the Pupil Attendance Branch, Division of Finance, Department of Education;

(e) Prior year adjusted average daily attendance reported by the Pupil Attendance Branch, Division of Finance, Department of Education (calculated according to the formula in subsection (3) of this section);

(f) The growth factor report from the Pupil Attendance Branch, Division of Finance, Department of Education;

(g) Transportation funding reported by the Division of Pupil Transportation, Department of Education;

(h) The number of at-risk students reported by the Division of School and Community Nutrition, Department of Education;

(i) The number of exceptional students in each disability category as reported by the Division of Exceptional Children Services, Department of Education;

(j) Vocational education average daily attendance reported by the Pupil Attendance Branch, Division of Finance, Department of Education; and

(k) The state equalization amount.

(2) Assumptions used in the SEEK calculation shall include:

(a) Equivalent tax rates (ETR) shall be the lower of the ETR levied in the prior odd numbered year under KRS 157.440(1)(a) and the current year;

(b) Adjusted average daily attendance (AADA) plus growth shall be the prior year AADA plus the second month's percent attendance growth times prior year AADA; and

(c) Percentage reduction in the allotments may be made to at-risk student, exceptional child, and home and hospital instruction amounts and to the state portion of Tier I funding and to transportation funding due to appropriations in the biennial budget.

(3) AADA shall be calculated for students in grades primary through twelve (12) as follows:

(a) Average daily attendance (ADA) shall be the aggregate days attendance as reported by local school districts divided by the number of school days taught as reported by local school districts.

(b) Adjusted average daily attendance shall be:

1. The ADA plus;

2. The shared time ADA as reported by local school districts minus;

3. The ADA for noncontract, nonresident students as reported by local school districts minus;

4. The release time as reported by local school districts minus;

5. One-half (1/2) of the total aggregate kindergarten days attendance as reported by local school districts divided by the number of days taught minus;

6. The ADA for over-age and under-age students as reported by local school districts.

(4) The SEEK calculation shall be determined as follows:

(a) Calculated base SEEK funding shall be:

1. The per pupil guaranteed base funding amount calculated pursuant to KRS 157.360(1) times;

2. The prior year AADA plus growth plus;

3. The at-risk student amount plus;

4. The exceptional child amount plus;

5. The home and hospital instruction amount plus;

6. The transportation funding.

(b) The total state SEEK base shall be the calculated base SEEK funding minus the local effort required pursuant to KRS 160.470(12)(a).

1. The total state SEEK base plus;

2. The total state Tier I funding (in accordance with subsection (6) of this section) minus;

3. The vocational education deduct amount (in accordance with subsection (7) of this section) plus;

4. The hold harmless provision if provided in the biennial budget plus;

5. The prior year adjustments (if any) minus;

6. The pro rata adjustments under KRS 157.430 (if any).

(5) The formula for the maximum Tier I equivalent tax rate allowable per KRS 157.440(1)(a) shall be guaranteed base funding per KRS 157.360(1):

(a) The guaranteed base funding amount calculated pursuant to KRS 157.360(1) plus;

(b) The calculated at-risk, exceptional child, home and hospital, and transportation amounts times;

(d) The greater of the state equalization amount and the local district per pupil assessment.

(6) State Tier I and Tier II funding formulas.

(a)1. The total Tier I revenue shall be the total calculated base SEEK funding pursuant to KRS 157.360 times the maximum Tier I participation of fifteen (15) percent pursuant to KRS 157.440(1)(a);

2. The total per pupil Tier I revenue shall be the total Tier I revenue divided by the prior year AADA plus growth;

3. The state portion per pupil Tier I funding shall be the total per pupil Tier I revenue minus the per pupil local portion Tier I (school district's per pupil assessment divided by the state equalization amount times total per pupil Tier I revenue);

4. The total state Tier I funding shall be:

a. The state portion per pupil Tier I funding times;

b. The prior year AADA plus growth minus;

c. The pro rata adjustments due to appropriation in the biennial budget.

(b) For local districts which have not levied at or above the maximum Tier I equivalent tax rate under KRS 157.440(1)(a), the state Tier I funding formula shall be as follows:

1. The levied Tier I equivalent tax rate shall be the levied equivalent tax rate minus the required minimum thirty (30) cents equivalent tax rate under KRS 160.470(12)(a) and five (5) cents levy under KRS 157.620(1)(a);

2. The per pupil total Tier I revenue shall be the levied Tier I equivalent tax rate times the state equalization amount;

3. The state portion per pupil Tier I funding shall be the per pupil total Tier I revenue minus the per pupil local portion Tier I (school district's per pupil assessment divided by the state equalization amount times total per pupil Tier I revenue);

4. The total state Tier I funding shall be:

a. The state portion per pupil Tier I funding times;

b. The prior year AADA plus growth minus;

c. The pro rata adjustments due to appropriation in the biennial budget.

1. The levied equivalent tax rate minus;

2. The required minimum thirty (30) cents equivalent tax rate under KRS 160.470(12)(a), the five (5) cents levy under KRS 157.620(1)(a), and the maximum Tier I equivalent tax rate times;

3. The total district assessment of property and motor vehicles.

(7) The vocational education (voc ed) deduct formula shall be as follows:

(a) The per pupil deduct amount shall be:

1. The total state SEEK base divided by;

2. The calculated base SEEK funding times;

3. The per pupil guaranteed base funding amount calculated pursuant to KRS 157.360(1) times;

4. The voc-ed deduct percentage as provided for in the biennial budget.

(b) The total voc-ed deduct amount shall be the per pupil deduct amount times the voc-ed ADA.

Section 3. Facilities Support Program of Kentucky (FSPK) Calculation. (1) Data required for the FSPK calculation formula shall include:

(a) Property assessments from the Department of Property Taxation, Revenue Cabinet, as required by KRS 160.470(5);

(b) Equivalent tax rates based on tax levies from school districts;

(d) Total annual debt service for school building revenue bonds; and

(e) State equalization amount.

(2) Assumptions used in the FSPK calculation shall include:

(a) A school district shall not receive state equalization funds until the full five (5) cent equivalent tax required for participation has been levied;

(b) A school district which has levied a five (5) cent equivalent tax for building purposes under KRS 157.620(1)(a) shall qualify to receive state equalization funding when the district's outstanding debt service as of October 1 of each odd-numbered year is within $10,000 of the required amount; and

(c) A school district's eligibility for participation in the FSPK program shall be based on prior year AADA. State equalization funds shall be calculated based on prior year AADA plus growth.

(3) The FSPK eligibility calculation shall be as follows:

(a) The total revenue available for debt service shall be the amount generated by a five (5) cent equivalent tax levy under KRS 157.620(1)(a).

(b) The debt service amount needed for equalization shall be the total revenue available for debt service minus the total current year debt service (from school district's outstanding school revenue bond issues).

(c) If the calculation in paragraph (b) of this subsection is a positive amount, the district shall not be eligible for equalization.

(4) Once a school district has been determined eligible for state FSPK funds, the state equalization calculation shall be as follows:

(a) The per pupil state equalization amount shall be the maximum eligibility amount (which is the state equalization amount times.0005) minus the local effort (which is the per pupil assessment times.0005).

(b) The prorated state FSPK amount shall be:

1. The per pupil state equalization times;

2. The prior year AADA plus growth times;

3. The pro rata adjustments due to an appropriation in the biennial budget. (20 Ky.R. 3378; Am. 21 Ky.R. 442; eff. 12-1-94; 23 Ky.R. 1429; 2468; 12-5-96.)