School Finance  

School Finance

School finance is one of the least understood components of public education. It is also one of the most difficult components to explain. This school finance primer is provided as an introduction to the way we fund public education in Delaware. It is not intended to cover school finance thoroughly, but to highlight the major components and facets of our school finance system.

Overall School Funding Some basic facts:
  • Overall, approximately 34.1% of the state's operating budget is allocated as support for public education.
  • 66% of the total expenditures for public education in Delaware is provided through the state budget; 25% is raised through local school district taxation; and 9% is provided through the Federal funds.
These percentages have remained relatively stable over the last decade.
State Funding

A Unit of Funding

The state's funding allocations to a school district are based on the number of students enrolled in that school district. On September 30 of each school year, each school district performs the "September 30th Count" to determine the number of students who are enrolled and attending school in that district. During this count, pupils are counted according to a variety of educational placements within regular education, special education and vocational-technical education and according to their assigned grade levels. The General Assembly enacted legislation this past year to permit three pilots to test performing the count on March 30th. These units, then, are then used to determine two major components of the school finance system:
  • allocation of staffing, meaning the number of teachers, administrators, secretaries, specialists and the like for which a district is eligible to receive state funds; and
  • the amount of state funding for which a district qualifies.
The staffing formulas are provided in a table at the end of this page. Click here to jump to the table.

Many persons, educators and parents alike, often equate a unit of funding with a class size allocation. While these are related, the purpose of a "unit" is to provide a basis of allocating state resources to local school districts. Many decisions impact class size, most often programming decisions made at the local district level and the uneven distribution of students across grade-levels and schools.

The amount of state funding for which a district qualifies is determined generally through three major divisions of state funding which are attached to a unit of state funding. These divisions include:

  • Division I for state support of school staff salaries which is based upon actual placement of each and every employee on the appropriate state salary schedule;
  • Division II for operating expenses including classroom supplies and materials, energy, contractual services, utilities and the like; and
  • Division III for equalizing the inequities in the relative wealth of taxable real estate per pupil among our nineteen school districts. Division III is commonly called "equalization funding."

Division I:

Division I of state funding to school districts is used to provide state support for the salaries of school employees. Division I represents the state's largest commitment to public education It's cost, including salary and other employment costs, is estimated to be $359,609,400 for fiscal year 1998.

State pays about 70% of total salary costs for school employees. The state's share of school employee salaries is determined by the placement of a particular employee on the appropriate state salary schedule. The state provides a salary schedule for each of the floowing employee classifications:

  • administrators;
  • teachers and specialists including nurses;
  • secretaries;
  • class paraprofessionals/aides and monitors;
  • custodians; and
  • food service employees
In addition to the actual salary, the state pays the salary-related or other employment costs--- "OEC" as it is commonly called in Delaware. These salary-related costs include the employer's share of pension, social security (FICA), medicare, workers' compensation and unemployment insurance on the state portion of salary. These salary-related costs add approximately 20% to the cost of the state's salary schedules . In addition, the state also funds the cost of basic health insurance for each employee through Division I, at an average cost of about $6,000 per employee annually.

A school district may only use Division I for the costs of hiring an employee. If a school district does not hire all of the employees for which it qualifies, the unused funds revert back to the state.

Division II:

Division II of state funding to school districts is separated into two sub-categories, Division II-Energy and Division II-All Other Costs (AOC). AOC provides funding for items such as textbooks, teaching supplies and materials, travel, and capital outlay. Division II-Energy may be used to offset costs for heating and other energy utilization. For FY 1998, the funds allocated for a Division II Energy Unit equal $1,457 per unit and funds for Division II Other Unit equal $3,152 per unit. Unused energy funds may be transferred to All Other Costs with approval from the State Budget Director and State Controller General.

Division III:

Division III of state funding is called equalization funding because it attempts to reduce the funding disparity between property-rich and property-poor districts. It is based on the property wealth of a district compared to the State average property wealth and the tax effort of a district. The State appropriation is currently $23,800/unit.

When a Division III amount is referenced as a dollar per unit, the State's share is not equal to that full dollar amount. On a statewide basis, it provides about 33% of that unit figure. On a district-by-district basis, the State share for equalization varies from 10% to about 70% depending on a district's relative property wealth and its relative local tax effort. For instance, the state's most wealthy school district, Cape Henlopen, receives only 10% of a dollar per unit allocation. The state's poorest school district, Lake Forest, receives approximately 69% . Equalization funds can be used by the local district at its discretion as though they were local funds.

Major State Funding Programs Beyond The Basic Unit System



Pupil Transportation
The State pays all the costs of pupil transportation. The State also funds a reimbursement for non-public school pupils based on an annual appropriation from the General Assembly. The cost of pupil transportation is estimated to be $47.4 million for fiscal year 1998.

Academic Excellence Unit
The academic excellence unit is a supplementary unit to the basic units define above. The academic excellence unit is provided for each 250 full time equivalent enrollees in grades K to 12, at a total cost of $21,131,000 in fiscal year 1998. The funding unit has a full allocation as described above for Division I and Division II - All Other Costs. No Division II -Energy monies are provided by this unit. New for fiscal year 1998, a whole Division III (equalization) component is provided. A district may convert up to 30% of these units to a cash option valued at $35,000 per unit. The resultant cash can be used as Division III.

This unit may be used to supplement the basic state staffing allocationsfor such programs as reading, communication skills, mathematics, science, social studies, elementary and secondary counseling, elementary and secondary foreign languages, elementary and secondary performing arts, elementary physical education, elementary music, elementary art, library services, career education in grades 7 and 8, programs for gifted and talented pupils, career placement counselors, programs for the limited English proficient pupils, programs for children-at-risk, school climate and discipline, intervention specialists, technology specialists and programs to provide additional time for students performing below standard. A school district that cashes-in units from this allocation is losing the opportunity to reduce its class size.

State law also provides that school districts may employ a full time professional staff member for each unit or employ two service or two instructional aides in lieu of that professional staff.
Academic Excellence Block Grant

 An appropriation of $3,782,500 in fiscal year 1998, or $558 per Division I unit, has been allocated to districts to fund any or all of the following five programs: Computer Grants, Homebound Instruction, Substitute Teachers, Ancillary Nurse Staffing, Student Work Study, conflict resolution training and extended day or extended year programs.


School Discipline Program

The General Assembly has focused on school climate and discipline in recent years in response to concerns expressed by parents, students and teachers. ( District discipline reports, mandated by state law, demonstrate that only about 2% of the state's public school students are responsible for about 95% of the reportable disciplinary infractions.) The state's discipline initiative focuses upon prevention programs at the early years of schooling, school-based prevention and behavioral remediation programs at the upper levels, and placement of severely disruptive students in alternative programs away from the school.

The state's discipline program funding is provided in three parts:
  • Part One provides funding for county-wide alternative programs for students who are expelled or who are likely to be expelled from school. These programs operate at sites separate from any public school. In FY 98, the state has allocated $2.1 million for these programs. Local districts contributed an additional $700,000 to this program using district tuition tax revenues.
  • Part Two provides grants ranging from $20,000 to $36,000 to individual schools to establish school-level disciplinary programs for students who have chronic discipline problems. The state has allocated $4,498,700 for this program during FY98. Individual school grants are distributed according to the number of students enrolled in a school as follows:
    • $20,000 for schools with up to 799 pupils in grades K-12
    • $28,000 for schools with 800 - 1199 pupils in grades K-12
    • $36,000 for schools with 1200+ pupils in grades K-12
    In addition, supplemental grants equal to double the base grant are provided to schools housing grades 7,8,9 and 10 which establish site-based discipline committees.
  • Part Three provides funding for pilots for services which prevent behavior problems and which are focused on the early grades. Three such pilots are operating in the state. In addition, Part Three is being used to fund another pilot program in which local school districts are subcontracting the services of family crisis counselors from the Department of Children, Youth and Their Families to work with children, who have behavior problems, their families and school personnel . This program focuses on children who are in grades K through 5. The state is allocating $1,750,000 for Part Three programs in FY 98.

Staff Development

The state funds an appropriation in the amount of $250 per professional staff member, or $2 million, for staff development to local school districts for curriculum development and alignment with the state content areas curricular standards. In addition, $81 per professional staff member is allocated for other locally-developed staff development programs.

The state also provides additional programs for staff and professional development which include: $500,000 for a tuition reimbursement program for teachers, offers a tuition-free summer school for teachers and instructional paraprofessions, supports sabbatical leaves, $480,000 for teacher mentoring programs, $140,000 for a principal's academy, $250,000 for training in shared decision-making, $628,400 for a teacher-to-teacher cadre for the designing, demonstrating and implementing a best practices program in the development of curriculum to meet the established curricular standards, $369,800 for the Delaware Teacher Center, and $150,000 for the alternative routes for teacher certification program. DSEA has been instrumental in securing funding for these programs.

Extra-Time Initiative

A new program initiated in the FY 98 state budget, provides $7.25 million to begin phasing-in programs to provide extra instructional or remedial time beyond the normal school day, week or year for low-achieving students. Such programs are to be developed by local school districts which will receive it funding based upon a grant application.

Other State Funding

Several other specific funding programs are provided in the State budget to support public education. You may download a copy of the state budget for public education through the state's Office of the Budget.
 
School District Funds
Local school district funds are derived from the property tax collected on tax rates given as rates/$100 assessed valuation or a capitation (or head) tax, used in a few school districts in Kent and Sussex Counties.. A school district may collect taxes for:
  • current operating expenses, the every day expenses of a school district;
  • tuition charges;
  • minor capital improvements; and
  • debt service.
Taxes collected for current operating expenses fund the daily activities of providing pupil instruction in the district's schools such as the local share of employee salaries, textbooks and library books, instructional supplies, materials and equipment including computers, utility costs including heat, and school athletic programs. This tax is established through a referendum vote of the residents of a school district.

Taxes collected for tuition expenses fund the cost of sending district pupils to special programs such as the alternative schools for discipline, special schools for disabled pupils, special programs such as the 3-5 year old pre-school program and out-of-state programs for students with rare and complex handicapping conditions. A local school board may establish this tax rate without a referendum.

Taxes collected for minor capital improvements are used to match state funds provided for repairs to school facilities which cost less than replacing a school heating boiler. A local school board may establish this tax rate without a referendum.

Taxes collected for debt service fund the school district's matching share of school construction or major renovation projects. School construction funds are funded through the purchase of bonds that are repaid over a defined period of time. The state provides its funding for school construction on an equalized basis, ranging from 60% of the total costs of school construction for districts with a relatively wealthy local real estate base to 80% of the total cost for districts with relatively low real estate bases. This tax is established through a referendum vote of the residents of a school district.

Both State appropriations and locally collected taxes are deposited with the State Treasurer and are paid out upon receipt of proper authorization by the local board. The funds can be used only for the purposes for which they were obtained.

Districts are required by law to retain a reserve balance at the end of a fiscal year. The State Auditor conducts an audit of all state and federal funds. While the State Auditor performs a sample audit on local funds, local school districts are not required to perform a conventional audit on local funds, though many do.

More information about your school district's use of state, local and federal funds may be obtained by contacting the Central Office of your school district and requesting a copy of the school district budget.

Unit Name

Number of Pupils
Regular Pupils
Kindergarten (1/2 day)
1-40
Elementary (1-3)
1-19
Elementary (4-6)
1-20
Secondary (7-12)
1-20
Special Pupils With Less Severe Disabilities
Educable Mentally Handicapped
1-15
Seriously Emotionally Disturbed
1-10
Learning Disabled
1-8
Intensive Learning Center
1- 8.6
Blind
1-8
Partially Sighted
1-10
Special Pupils With More Severe Disabilities
Trainable mentally handicapped
1-6
The following units are generated based upon the total number of units counted from the units above:
        Psychologists
1-150 units
        Speech and Hearing
1-140 units
        Visiting Teachers
1-250 units
        Nurses
1-40 units
        Related Services Specialists
1-30 special ed units
Severely Mentally Handicapped
1-6 plus an aide
The following units are generated based upon the total number of SMH units:
        Physical Therapists
1-50 SMH pupils
        Occupational Therapists
1-50 SMH pupils
        Speech Therapists
1-50 SMH pupils
Physically impaired (include. aide)
1-6
The following units are generated based upon the total number of PI units:
        Physical Therapists
1-30 PI pupils
        Occupational Therapists
1-30 PI pupils
        Speech Therapists
1-50 PI pupils
Hearing Impaired
1-6
The following units are generated upon the total number of HI units:
        Speech Therapists
1-6 units HI pupils
        Psychologists
1-10 units HI pupils
        Resource Teacher
1-10 units HI pupils
        Interpreter Tutors
1-4 HI pupils
Deaf-blind
1-4 and an aide
The following units are generated based upon the total number of D/B units:
        Related Services Personnel
1-3 units DB pupils
Autistic)
1-4 and an aide
The following units are generated based upon the total number of autistic units:
        Speech Therapists
1-3 units Autistic pupils
        Psychologists
1-6 units Autistic pupils
Vocational Units
Vocational
1 unit for every 27,000 minutes pupils are enrolled in vocational class per week. The number of vocational units times .5 is subtracted from regular and special education units (vocational deduct).
Vocational Deduct
The number of vocational units times .5 is subtracted from total number of regular and special education units.
Additional Staff Units
Superintendent
1 per district
Assistant Superintendents
1 - 300 units (2 maximum)
Directors
1 - First 200 units and 1- each additional 100 (6 maximum)
Administrative Assistant
1per district
Supervisors
1-150 units
Supervisor of Transportation
1-7,000 or more pupils transported
Supervisor of School Lunch
1-4 or more cafeterias in districts with less than 500 units or 1 per 500 units in larger districts
Supervisor of Building and Grounds
1-per district if 95 units or more
Principals
1-15 or more units in a school.
Assistant Principals
1- At 30, 55, 75, 95 units in a school
Driver Education
1-125 tenth grade students
Clerical
1-10 for first 100 units; 1-12 for units over 100 units
Custodial
1-12 building units ( Building units are based on space, not pupils or units of pupils
Cafeteria Managers
1-per cafeteria (39% State Funds)
Cafeteria Workers
1 worker hired for 7 hours for every 100 meals (35% State Funds)
Class Aides
2 - In lieu of teacher in certain special education settings
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