[Busmgrs] A message from Michael Elliott: 2011-12 State School Fund update

[WILTFONG Michael]

DA:             June 30, 2011

TO:             District Business Managers

FR:             Michael Elliott
                Department of Education

RE:             2011-12 State School Fund update


Good Evening,

I have posted the updates to the 2011-12 Estimate on ODE's website here: http://www.ode.state.or.us/services/ssf/2011_12-ssf-estimate-as-of-6_30_11-1842hrs--5.70b.pdf.  ESD estimates are available here: http://www.ode.state.or.us/services/ssf/esd-11_12-estimate-as-of-6_30_11-1849hrs.pdf.   These estimates incorporate the major changes as a result of recent legislation.  Below is a brief explanation of the pertinent bills affecting the State School Fund.

SB 250: SB 250 made two major changes to the State School Fund.  The first change is that the ratio of funding for districts and ESDs was changed.  Previously districts received 95.25% and ESDs received 4.75% of the State School Fund.  Under SB 250, districts now receive 95.5% and ESDs receive 4.5% of the State School Fund.  Additionally, SB 250 created the Office of Regional Education Services (ORES).  The ORES receives 0.25% of the State School Fund for funding.  In order to balance the State School Fund, the funding from the ORES was taken from both the districts and the ESDs at the current ratio.  Thus, 95.5% of the funding for ORES came from districts and 4.5% of the funding from ESDs.  Additionally, SB 250 provides that any funds unused by the ORES at the end of the biennium will be redistributed to school districts.

SB 453: SB 453 changes the calculus for the small school correction.  It states that an elementary school qualifies for the small school correction if it is greater than 8 miles from another school in the district.  This expands the previous definition which required the school to be 8 miles from any other school in any other district.  Additionally, this bill, and HB 5055 provide an additional $8.66 million in funding to accommodate the increase.  $4.33 million was provided for each year and the cover sheet to the estimates reflects that increase.

HB 5055: HB 5055 provides additional funds to the State School Fund and changes dates of the distribution of funds.  First, HB 5055 provides an addition of $25 million to the School Year Subaccount (SYS).  This brings the total amount of money available in the SYS to $125 million.  The amount available in the SYS is shown here: http://www.ode.state.or.us/services/ssf/2011-12-school-year-subaccount-estimate-6_30_11.pdf.  However, HB 5055 also changes the date of the distribution of those funds.  $25 million of the funds will be available by September at the latest, and $100 million of those funds are not available until shortly after June 1, 2012.  The previous Q&A provided addresses this issue in more detail.  HB 5055 also provides the additional $8.66 million to account for the increase in the small school correction per SB 453.

Additional changes by other legislation will be implemented in the future.  However, these are the changes that immediately affect the distributions of the State School Fund.

Besides the legislative changes, the merger of the Umatilla and union/Baker ESDs into the InterMountain ESD is also reflected in this estimate.  All future estimates will show this merger.

Barring additional changes, it is the intent that this estimate will form the basis of the July Payment.  Thus, if you see any issues, please let me know.

Thank you for your patience as we waited for the Legislature to end before posting this estimate.  As always, if you have any questions, please let me know.

Sincerely,


Michael Elliott
State School Fund Coordinator
503-947-5627
Michael.S.Elliott at state.or.us



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