Very Early to Predict FY22 Mid-Term Funding Factor

By Derald Glover, OASA Assistant Executive Director

An early estimate of what the state funding factor maybe be at mid-term this year.

Facts:

The FY22 initial state aid factor is $3,517.17 per weighted average daily membership (WADM). An increase of $126 over the final FY21 allocation.

The state appropriated $2,437,246,699 to the funding formula in FY22, which was an increase of $136.2 million over FY21.

The state held out $7.6 million for the Lindsey Nicole Henry Scholarship, $965,814 for two new charter schools, and $48,744,934 (2%) for the midterm adjustment.

The high year WADM (based on FY20 and FY21) to start the year is 1,196,319 which is 37,000 higher than the FY21 initial WADM and 18,000 lower than the end of the year FY21 count.

* If HB2078 were already in effect and funding was based upon FY21 WADM only, the WADM would be 1,124,837.

Variables that will affect the mid-term Factor estimate:

The growth of WADM at mid-term:

■ Last year saw an unprecedented growth of 55,000 WADM due to students transferring to statewide virtual schools.*

■ Indications are that many of those students are returning to their community schools. Until we know that number, it will be very difficult to make an accurate prediction.

■ Before COVID, the average mid-term WADM increase over the previous 5 years was approximately 23,000 WADM which included increasing charter weights from 1.331 to actual weight (which is no longer a factor). At this time, an increase of 30,000 is estimated.

* Something to watch!

Last year a new law was passed that allowed statewide virtual schools to be funded on the previous two high years as with all schools. However, if a virtual school’s WADM drops 15% at mid-term, that school will be funded on that mid-term figure and not the high year. The Statewide Virtual Board stated in their last meeting that EPIC One on One was starting FY22 with 5,000 less students than they started FY21. Their high year count was 33,000 students. 15% of 33,000 is 4,950. If EPIC’s funding is adjusted from their high year to current year, that will help offset the growth of the transfer students and infuse money in the formula.

Ad Valorem growth:

■ CCOSA uses an average Ad Valorem growth of $53 million at mid-term. This can vary greatly, but is a general estimate.

■ The only other variable that could affect mid-term is county 4 mill as the initial county 4 mill chargeable is based on the previous 11-month collections. The final month will slightly affect the mid-term. A general estimate is to anticipate a $6 million growth.

■ Slight adjustments may be needed to fund the LNH Scholarship in December.

All indications point to an economic recovery in the state. This means that schools don’t have to worry about state cuts this year. This fact along with the addition of ESSER funds put schools in a positive position. Schools that were already in the black can look for innovative ways to improve academic opportunities using ESSER funding. Schools that were operating marginally can use ESSER funds to plan cuts needed to be in better financial shape when ESSER runs out in FY25.

For clarity, these numbers instead of the above numbers and calculations are provided below. Please understand that there are variables that had to be estimated and a more accurate estimate will be given as we get more information.

We will keep a close eye on the drop in EPIC One on One counts as that could sway the mid-term growth numbers greatly.

If you would like to make your own estimate and try to “out guess” our CCOSA estimator, visit https://ccosaorg.finalsite.com/advocacy/mid-term-estimate and enter your estimate for the FY22 Mid-Term Factor by December 1. The CCOSA member with the closest guess to the factor at mid-term will receive free registration to the OASA Legislative Conference! A win-win!

See page 36 of the full Better Schools September publication for the Mid-Term (Very Early) Formula Calculations FY22

NOTE! These are very early estimates. Many variables can sway this estimate several dollars. However, with these early estimates it appears that a 30,000 WADM growth will keep the factor relatively the same. Anything less than 30,000 WADM growth will add to the factor, and anything more will reduce it. ■