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REPORT 83
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REPORT

BUREAU OF RESEARCH '
DIVISION OF ELEMENTARY & SECONDARY EDUCATION

Florida
Public School
Finance Program

1970-71

SEPTEMBER 1970

DEPARTMENT OF EDUCATION
TALLAHASSEE FLORIDA
PLOYD T. CHRISTIAN. COMMISSIONER

- ~-. ~--.I

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Research Report 83 is a summary of the State
program for financing Florida public schools
prepared by the Bureau of Research, Division
of Elementary and Secondary Education, of the
Florida Department of Education. Basic data
for this report were compiled by Mrs. Marie A.
Kohler, Administrator, Institutional Research.
This report revises Research Report 79.(1,000)

CONTENTS
Page

Introduction . . . . . . . . . .. . .

Selected Program Facts . . . . ... . . . 2

State Support . . . . . . . . . ... 2
Local Support . . . . . . . . . . . 3

Summary of State Distributions . . . . . . . .. 3

Description of State Distributions . . . . .. . 5

State Minimum Foundation Program Fund, K-12 .. . .. . 5
State Junior College Minimum Foundation Program Fund . . 16
District Ad Valorem Tax Equalization Fund . .. . . 19
District Capital Outlay and Debt Service School Fund. . . 20
District School Sales Tax Trust Fund. . . . . . 22
District School Additional Capital Outlay Trust Fund. . .. 23
Racing Commission Funds . . . . . . . . .. 24
State Textbook Fund . . . . . . . . . . 24
Junior College Construction Fund. . . . . . . 26
Vocational-Technical Center Construction Fund .. . . .. 27
Exceptional Child Education Equipment Fund. . . . 29
Exceptional Child Education Facilities Fund . . . . 30
Public School Driver Education Fund . . . . . . 30
State School Fund . . . . . . . . . . 31

Provisions for Federal School Revenue. . . . . . . 32

Provisions for Local School Revenue. . . . . . . 33

Property Assessment . . . . . . ..... . 33
Millage Levies. . . . . ... . . . . 33

Provisions for School Indebtedness . . . .. . . . 35

Initiating Bond Issues. . . . ........ 35
Limitations on Issuance of Bonds. . . . . .. 35
Limitations on Debt . . . . . . . . . 35
Voting Requirements . . . . . . . .. . .. 35
Approval and Sale of Bonds. . . . . . . . 35
Bond Records, Tax Levies, and Payments. .. . . . . 36
Short-Term Indebtedness . ...... ... . . 36

Provisions for School Budgets. . . . . . . . . . 37

Budget Forms. ... ... . . . . . . 37
Local Approval. . . . . . . . . . 38
State Review and Approval . . . . . . .. .. 38

Provisions for School Audits . . . ..

. . . . . 39

INTRODUCTION

This report deals primarily with the state program for financing public

schools in Florida. Its purpose is to answer questions regarding state

financing of public schools. The organization of this report follows the

general format used by the U. S. Office of Education in its State Public

School Finance series. An effort has been made to present Florida's state

program in a clear, orderly manner and to avoid legal and technical language

when possible. Still, it does not make for light reading. It should be

recognized that any program involving $788 million in state funds alone

must be detailed in application and complicated to some degree. This report

will be of primary interest to the serious student of school finance. Legal

references have been made only where necessary.

Estimated or appropriated amounts for the 1970-71 school year are

shown for each fund. These amounts are intended to serve only as a general

indication of the magnitude of each distribution. The primary consideration

is the "how" of the state program for financing public schools. Practically

all state funds are allocated to the districts on the basis of formulas

written into state law and funds; if not "earned" by the districts on the

basis of pupils or teacher units, remain in the State Treasury.

SELECTED PROGRAM FACTS

STATE SUPPORT

Funds for state grants to district school systems are provided mainly
by legislative appropriations. Approximately seven percent is obtained
from constitutionally earmarked sources. Less than one percent is from
permanent school endowments.

Over 80 percent of the state funds apportioned for the public schools,
kindergarten through grade 12 and junior college, is distributed under the
provisions of the State Foundation Program.

Allowances in the State Foundation Program include amounts for salaries
of instructional personnel, pupil transportation, other current expense,
education improvement expense, and capital outlay and debt service. District
School Sales Tax Trust Fund distributions are for the purpose of providing
necessary funds for meeting retirement matching requirements.

Foundation Program salary allowances for instructional personnel in
kindergarten and grades 1-12 are based on instruction unit salary values
which provide allotments ranging from $2,800 to $9,500, depending on the
rank of the teaching certificate held, contractual status, and years of
Florida teaching service. The unit salary value for a beginning bachelor's
degree teacher is $5,300. Other K-12 Foundation Program allowances include
funds for transportation, $2,150 per instruction unit for other current
expense, $1,720 per unit for education improvement expense, and $400 per
instruction unit for capital outlay and debt service.

Junior College Foundation Program instruction unit values for instruc-
tional salaries range from $3,900 to $7,300 based on college preparation,
experience, and contractual status. Other Junior College Foundation Program
allowances include $1,250 per transportation unit, $1,900 per instruction
unit for other current expense, $400 per instruction unit for capital outlay
and debt service and $17,500 for administrative expense of the first approved
junior college center in each district.

County capital outlay and debt service funds, although included in the
Foundation Program, are separately provided for by earmarked motor vehicle
license funds. Four other state funds, which account for about six percent
of the total state distribution, also provide assistance for school facilities.
State sources provide essentially the total construction cost of junior college
facilities.

Sales tax receipts provide $500 per instruction unit for the District
School Sales Tax Fund. Driver's license funds provide partial support for
the public school driver education program.

Other state distributions for schools include the State Textbook Fund
and the Exceptional Child Education Equipment Fund. Racing Commission Funds
are distributed to some district school boards under special or local acts or
by the boards of county commissioners.

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Local revenue for school support is derived almost wholly from real
and personal property taxes. There are no local non-property taxes levied
specifically for schools. All 67 school districts in the state are county-
wide districts.

District school boards are authorized to levy up to ten mills on the
local non-exempt assessed valuation of property for the support and
maintenance of schools, without a vote of the people. In addition, the
qualified electors who are owners of freeholds therein not wholly exempt
from taxation may vote an additional millage levy. However, by Statute
each district participating in the State Foundation Program is limited to
a ten mill levy for operation and maintenance, exclusive of the millage
voted for required for junior college minimum effort additional kindergarten
required local effort, deficit in state funding of retirement matching, and
the amount of money necessary to replace any decrease from the previous
year's federal impact funds.

The amount of school revenue to be provided by each district for
participation in the State Foundation Program for grades 1-12 is equal
to 95 percent of the calculated yield of a four mill levy on 100 percent
of the non-exempt assessed valuation of the district. Districts operating
kindergartens add five percent to the local required effort for grades 1-12,
or $3,000 per kindergarten unit approved, whichever is less. The amount
to be provided by each district that operates or participates in the
support of a junior college is equal to 95 percent of the calculated yield
of a three-tenths of a mill levy on the non-exempt assessed valuation of
the district.

State board of education regulations prohibit school districts from
issuing school bonds in excess of 10 percent of the non-exempt assessed
valuation of the district except with specific state board approval.

Tax levies for debt service are in addition to the levies for school
current operation but are limited by state board of education regulations
to six mills except with specific board approval.

SUMMARY OF STATE DISTRIBUTIONS

The following table provides a list of state distributions and
gives a brief statement of the basis for each distribution. The esti-
mated amount of each state aid fund for 1970-71 and the percent that
each fund represents of the estimated total state distribution are
shown to give a general indication of the extend of each distribution.

SUMMARY OF STATE DISTRIBUTIONS

Est. State Aid, 1970-71
Diptribution Appupt Percent

Bneie nf T)4ntrihaitt~n

Est. Total School Grants

1. Minimum Foundation
Program, K-12

2. Minimum Foundation
Program, Junior College

3. District Ad Valorem Tax
Equalization Fund
(Grades 1-12)

4. Capital Outlay and Debt
Service Program (Grades
K-12 and Junior College)

5. District School Sales Tax
Trust Fund (Grades K-JC)

6. District School Additional
Capital Outlay Trust
Fund (Grades 1-12)

7. Racing Commission Funds
(Grades K-JC)

8. State Textbook Fund
(Grades 1-12)

9. Exceptional Child Educa-
tion Equipment Fund

10. Exceptional Child Educa-
tion Facilities Fund

11. Junior College Construc-
tion Fund

12. Vocational-Technical
Center Construction Fund

13. Public School Driver
Education Fund

14. State School Fund

$788,667,917

569,096,786

76,240,480

7,000,000

29,906,450

38,374,420

23,827,200

11,200,000

8,211,281

427,500

3,572,500

15,459,800

3,251,500

2,100,000

1,000,000

100.0%

72.1

9.7

0.9

3.8

4.8

3.0

1.4

1.0

0.1

0.5

1.9

0.4

0.3

0.1

Foundation Program minus
local share; based on in-
struction units determined
by average daily attendance
(ADA) and transportation
determined by pupil density,
pupils transported, and
miles traveled

Amount district yield/mill/
pupil is below state average
yield/mill/pupil

$400 per instruction unit

$500 per instruction unit

$800 per pupil increase in ADA

Special or local acts of the
Legislature

Number of pupils enrolled

$750 per new exceptional
child unit

Program need as approved by
State Board

Legislative authorization
based on formula

Legislative authorization
based on formula

Driver Education units based
on pupils instructed

Distributed as a part of
K-12 Foundation Program

Distributio Am n P B i

DESCRIPTION OF STATE DISTRIBUTIONS

STATE MINIMUM FOUNDATION PROGRAM FUND. K-12

Legal Authorization.--Sections 236.01-236.251, Florida Statutes.

Requirements for participation.--In order to participate in the State

appropriation for the Minimum Foundation Program (MFP), each district

school system is required by law to: (a) maintain adequate records and

file required reports; (b) operate all schools for a term of at least

180 actual teaching days; (c) provide written contracts for all

instructional personnel and require not less than 196 days of service

for all members of the instructional staff, except principals and other

special instructional personnel required to be employed on a twelve-month

basis; (d) employ for the full year at least one qualified supervisor or

supervisors of instruction; (e) comply with any state board regulations

relating to minimum and maximum classroom teaching loads; (f) expend funds

for instructional salaries in accordance with properly adopted salary

schedules which make provisions for a minimum annual salary of $5,300 for

each member of the instructional staff holding a regular certificate and

additional yearly increments to provide for at least fifteen years of

teaching service in Florida public schools; (g) observe all requirements

relating to school budgets; (h) make the minimum financial effort required

for the support of the foundation program; (i) nominate and elect a five-

member district school board, unless a larger district board is provided

for by special legislative act; (j) be a school district consisting of an

entire single county, except that two or more contiguous counties, upon a

vote of the electors of each county, may be combined into a single school

district; (k) levy no more than ten mills of tax on the non-exempt assessed

valuation of the district, exclusive of district millage voted for (1) capital

outlay purposes, (2) required debt service, (3) required junior college minimum

effort, (4) required additional kindergarten local effort, (5) deficit in

state funding of retirement matching, and (6) the amount of money necessary to

replace any decrease from the previous year's federal impact funds (P.L. 874).

Distribution plan.--$569,096,786. The cost of the Minimum Foundation Program

for each district is made up of the computed cost for instructional salaries,

transportation, current expense other than instructional salaries and trans-

portation, and education improvement expense.

The amount to be provided by each district toward the cost of the Minimum

Foundation Program, for grades 1-12, is equal to ninety-five percent of the

calculated yield of four mills in 1970-71, five mills in 1971-72, six mills in

1972-73, and seven mills in 1973-74 and each year thereafter of tax on one

hundred percent of the non-exempt assessed valuation of the district for the

preceding calendar year. The auditor general, after consultation with the

department of revenue, is to determine the ratio of the assessment roll compared

to full value in each school district and certify such ratios to the department

of education no later than May 1 of each year. (Except for the 1970 ratio

study which is to be certified November 1, 1970). The required local effort

for 1970-71 is determined from the 1969 tax roll. For the 1970-71 program the

level of assessment for each district as determined by the ratio study of the

1970 tax roll will be applied to the 1969 tax roll. For each subsequent year

the level of assessment for each district as determined by the ratio study on

the current tax roll will be applied to said current tax roll. Each year that

the districts' required effort is increased by one mill, the value of each

instruction unit for other current expense is increased by $1,100 with the

following safeguard provisions: (1) In any year that the legislature fails to

provide an appropriation sufficient to fund the additional increase of $1,100,

the districts' required effort for that year shall revert to the level of the

prior year in which the legislature did appropriate sufficient funds for the

$1,100 increase, and (2) If in any year, as the required effort is increased

mill-by-mill, a district which has a required effort increase in dollars

which exceeds the number of dollars created by the $1,100 increase in other

current expense, shall receive additional state funds so that the total

allocation for other current expense is at least equal to the required

effort increase for that year.

If the district is operating kindergartens under the foundation program,

in 1970-71 the required local effort for grades 1-12 is increased 5 percent

or $3,000 per kindergarten unit approved, whichever is less. After

July 1, 1971, districts will not be required to provide additional effort

for kindergarten units. The estimated required local effort for K-12 for

1970-71 is $126,329,101.

The amount of state funds to be apportioned to each district for the

foundation program is found by subtracting from the objectively determined

cost of the Minimum Foundation Program in each district the amount required to

be provided through local effort by such district. The amount automatically

increases, within limits set by legislative appropriation, as attendance

increases and teacher preparation improves. The total cost of the program

for each district is made up of the computed cost of instructional salaries,

transportation, current expense other than instructional salaries and

transportation, education improvement expense, and recalculation funds.

The number of instruction units is determined by dividing the average

daily attendance (ADA) during the preceding year in all elementary and

secondary schools having 300 or more pupils, by 27, and by dividing the

attendance in smaller schools by progressively smaller numbers ranging as

low as 17 for an isolated school with less than 60 pupils. The divisor

for the ADA of first grade pupils is two less than the divisor for the ADA

of pupils in grades 2-12 in all schools with an ADA of 90 or more pupils the

preceding year. All elementary and secondary schools with an ADA of less than

120 pupils are classified as isolated or non-isolated for the purposes of

computing instruction units. This classification is determined by regulations

of the state board and is based on number of pupils, school population density,

surrounding road conditions and distance from another school of the same type.

In addition to regular and special units earned by ADA the law provides

units which proItect a district against a sudden decline in units as a result

of low ADA caused by hurricane, pestilence, flood, epidemic, or other factors

beyond the control of the school board of any district. When the ratio

between the total ADA and the total average daily membership (ADM) of students

in the entire district for the year is below the ratio of the highest two of

the preceding four years in that district, the average ratio between the

ADA and the ADM in that district for the highest two of the preceding four

years is used as the basis for calculating the total number of instruction

units for instructional personnel in the district. Units provided under the

above conditions are called "ratio units."

To the number of instruction units for regular teachers, thus determined,

is added the following, if utilized: (1) one unit for each group of ten or

more exceptional children taught by a properly qualified full-time teacher

of exceptional children as a special class or taught individually as home

bound or hospitalized children unable to attend school for the main portion

of a year; one unit for each properly qualified member of the instructional

staff devoting full time to instruction of exceptional children from regular

classes; one unit for each full-time qualified teacher of ten or more

exceptional children between three and five years of age for whom professional

determination has been made that such programs are required to prepare the

child for entrance into special classes or schools; and one unit for each

900 instruction hours provided by a properly qualified teacher or teachers

for pupils unable to attend school because of being home bound or hospitalized,

a proportionate part of a unit for less than 900 instruction hours; (2) one

unit for each qualified full-time vocational teacher employed to provide

instructional services approved under regulations of the state board; provided,

the ADA in the vocational program of the school is not less than one-half

the ADA used in calculating the number of average daily attendance instruction

units, a proportionate part of a unit when the ADA is less than the minimum

required; one unit or a proportionate part of an instruction unit is allowed

for each additional qualified vocational teacher employed to provide instruc-

tional services on a full-time, part-time or short-time basis for a full school

day, a full school year, or proportionate parts thereof; provided the ADA in

the vocational program of the school is not less than ten; (3) one unit for

each qualified adult education teacher other than vocational education employed

full-time for a class or course with an ADA of not less than fifteen; a pro-

portionate part of an instruction unit for a teacher of part-time or short-

unit classes of less than a full school day or full school year, or for a

class where the ADA falls below the requirement for a full instruction unit;

(4) one unit for each 25 pupils or a fractional part of a unit for less than

25 pupils in ADA in kindergartens in a district when teachers are employed

full-time and each teacher is responsible for one group of pupils for a full

school day, except one unit may be allocated for each class of twenty or more

pupils in ADA in isolated schools; or one unit for each 40 pupils in kindergartens

in a district when teachers are employed full-time and each teacher is responsible

for two groups of pupils, one in the morning and one in the afternoon.

For each eight of the above units, one special teacher services (STS)

unit or a proportionate fraction of a unit is allowed when used in accordance

with regulations of the state board. Special teacher services may include,

but are not limited to, personnel such as principals, librarians, materials

specialists, guidance counselors, deans, physical education teachers, art

teachers, music teachers, industrial arts teachers, remedial reading specialists,

teachers for special instructional projects, visiting teachers, coordinators

of district-wide summer educational enrichment programs, and psychologists.

To the foregoing, units for supervisors of instruction are allocated,

if used, as follows: one supervisory unit for a general supervisor of

instruction for the first 100 instruction units or fraction thereof; and

one additional supervisory unit for each additional 100 units or fraction

thereof.

The sum of the instruction units described above is the total number

of instruction units for each district for operation of the kindergarten

through grade twelve school program.

The amount to be included in the program for instructional salaries

is determined by multiplying the number of instruction units represented

by persons holding certificates based on various academic classifications

by the MFP salary value of instruction units as follows: an earned doctor's

degree (Rank I) by $7,700; a sixth year of college study at the post-master's

level at a standard institution of higher learning, in a program planned by

the institution of higher learning consisting of a planned sequence of at

least thirty semester hours of graduate credit (Rank IA) by $7,000; an earned

master's degree (Rank II) by $6,300; an earned bachelor's degree (Rank III)

by $5,300; three to three and nine-tenths years of college training (Rank IV)

by $3,000; two to two and nine-tenths years of college training (Rank V) by

$2,800. A Rank VI certificate, based on less than two years of college

preparation, is provided for in state law but no state funds are allocated

for such a certificate. An additional $400 is added to the value of each

instruction unit sustained by instructional personnel in Rank III or above

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who hold a continuing contract; another additional $400 is added if such

instructional person has completed seven years of efficient teaching

service in Florida public schools; another additional $400 is added if

such instructional person has completed ten years of efficient teaching

service in Florida public schools; and an additional $600 is added if such

instructional person has completed fifteen years of efficient teaching

service in Florida public schools. The amounts included for salaries of

supervisors, special teacher service personnel, vocational and adult

education teachers are increased by up to twenty percent, for salaries of

such personnel who are employed for the two-month period, or fractional

part thereof, beyond the ten months of employment required by law for all

instructional personnel. Each teacher in Rank III or above must be paid at

least ninety percent of the salary allotment for the rank and contract status

of that teacher or $5,300 whichever is greater. The total amount paid for

salaries must be at least equal to the amount included in the MFP for

instructional salaries.

The allocation for transportation for pupils in grades K-12 transported

to public schools is determined by (I) the number of pupils in ADA trans-

ported the preceding year at public expense to schools in the district whose

homes are two or more miles from the nearest appropriate school, except the

mileage limitation does not apply to physically handicapped; (2) the adjusted

one-way miles in the morning traveled by school transportation vehicles

operated at public expense; and (3) a density index. Adjusted one-way miles

in the morning are determined for each district by adding (I) the loaded

one-way miles in the morning of school bus routes designated in accordance

with law served by a bus having a seating capacity in excess of eighteen

linear feet and one-half the loaded miles in the morning of each school bus

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route served by a bus having a seating capacity of eighteen linear feet or

less, except for miles traveled on a side route to pick up children living

within one and one-half miles of the trunk route; (2) fifty percent of the

one-way miles traveled without pupils in the morning on such school bus

route; and (3) ten percent of the one-way miles in the morning traveled on

such school bus route on unpaved or unimproved roads. The density index for

each district is determined by dividing the ADA of pupils transported, less

physically handicapped pupils transported on buses used exclusively for such

pupils, by the adjusted one-way miles of vehicular travel.

The amount included for transportation is determined by multiplying

the average daily attendance of transported pupils for the preceding year,

grades K-12, by the allowance per pupil determined by the density index of

the district, which varies from $10 per pupil in districts having a density

index of 6.00 or more to $20 per pupil for a density index of 1.49 or less,

and by multiplying the adjusted one-way miles traveled by the allowance per

adjusted bus mile determined by the density index of the district, which

varies from $61.20 per mile in districts having a density index of 6.00 or

more to $43.20 per mile for a density index of 1.49 or less.

For each vehicle used exclusively for transporting ten or more

physically handicapped pupils in ADA to a public school, $1,250 is allowed

in lieu of the allowance of ADA. A proportionate amount is allowed for less

than ten but not less than four such transported pupils.

In unusual cases, involving a small number of children living in

sparsely settled areas, an annual allocation of $21.60 per mile is allowed

for miles traveled by passenger cars one way in the morning with pupils.

The amount included for transportation for pupils who are enrolled in

and transported at public expense to vocational-technical centers designated

by the department of education to serve the area is $1,250 for each 30 pupils

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in ADA who live two miles or more from school (1) when the vocational-

technical center is operated as a separate school center and pupils

attending from the district of location are assigned primarily to the

center, and (2) when pupils are transported to the vocational-technical

center from a cooperating district for instruction primarily in the vocational-

technical program. A proportionate amount is allowed for less than 30 such

transported pupils. Vehicular miles traveled by such buses are not included

in the adjusted miles used in determining the allowance for K-12 pupil

transportation. Additional transportation funds are allowed for pupils

enrolled primarily in a school center providing basic education, who during

the school day are transported to or from such center for a distance of two

or more miles to a vocational-technical center designated for the area and

located within the same district, and who are in attendance at such vocational-

technical center. For each 50 such pupils in ADA transported, 20 cents per

mile is allowed for the miles traveled between the two schools by the nearest

traveled road. A proportionate amount is allowed for less than 50 such

pupils transported.

The amount for current expense other than instructional salaries and

transportation, "other current expense," is determined by multiplying the

total number of instruction units by $2,150 in 1970-71, $3,250 in 1971-72,

$4,350 in 1972-73, $5,450 in 1973-74 and each year thereafter. To these

amounts shall be added annually an amount determined by dividing the total

number of instruction units included in the MFP for all districts collectively

into the difference between (1) the amount required for participation in the

MFP for all counties as determined by the application of the ratio study of

the auditor general and (2) the amount determined by applying the number of

mills required for participation to 95 percent of the total assessed valua-

tion of nonexempt property for all counties collectively for the preceding

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year. Of these amounts $100 per instruction unit is designated for the

purchase of instructional materials.

The amount included for education improvement expense is determined by

multiplying the total number of instruction units by $1,720. This amount

must be used by each school board for improving the quality of the educa-

tional program based on an approved plan of utilization and implementation.

Each district board must develop a long-range systematic program of action

for meeting its educational needs which incorporates a priority of the

use of education improvement expense funds. In developing the plan for

educational improvements each district board is required to give the

highest priority of need to the area of staff development. Prior to

July 1 each district board must present to the department of education

for review and approval a plan for educational improvements to be

accomplished that year which are in accord with the long-range objectives.

The department of education is prohibited from approving any plan failing

to give the highest priority to the area of staff development. If a

district's plan is not approved prior to August 31, these funds must be

placed in an earmarked reserve until the plan for improvement of education

has been approved by the department of education. If the plan is not

approved by February 1, the district forfeits its right to the education

improvement expense funds and the amount of such funds distributed to the

district is withheld from the remaining distributions of state funds to

the district.

If the ADA in any district for the first two months of any school

year shows an increase over the ADA in that district during the first two

months of the preceding year the department of education has the authority

to increase the state portion of the foundation program fund for such

district by such percentage of increase. These additional amounts are known

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as "recalculation funds." For the 1970-71 year the general appropriations

act provides that recalculation funds shall be calculated only on programs

where the basic allocation was determined on prior year attendance and

the instruction units including special units resulting therefrom.

The total allowable cost of the foundation program is determined by

the total of the amounts calculated for salaries, transportation, other

current expense, education improvement expense, and recalculation funds.

From this total is subtracted the required local contribution. The balance,

or remainder, is provided by the state as its share of the cost of the

program.

Any district desiring to participate in the K-12 Minimum Foundation

Program is by statute limited to the tax levy of ten mills on the non-exempt

assessed valuation of the district, exclusive of district millage voted

for (1) capital outlay purposes, (2) required debt service, (3) required

junior college minimum effort, (4) required additional kindergarten local

effort, (5) deficit of state funding of retirement matching, and (6) the

amount of money necessary to replace any decrease from the previous year

in funds from PL 874 (federal impact funds), with decrease meaning the

difference between the amount received by the district during the current

fiscal year and the largest amount received subsequent to July 1, 1967.

Funds for salaries, transportation, other current expense, and education

improvement expense are distributed to the respective districts in twelve

approximately equal monthly payments beginning July 15 each year. Recalcula-

tion funds are distributed to the districts, 35 percent in January, 35

percent in February, and the balance in March each year.

Each state university which operates a laboratory school as part of its

teacher preparation program receives all state funds per pupil as is computed

for the district in which the university is located. Payments are made

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directly to the university and are in lieu of payments of state funds to the

district school board for the operation of such school.

STATE JUNIOR COLLEGE MINIMUM FOUNDATION PROGRAM FUND

Legal Authorization.--Sections 230.761-230.767, Florida Statutes.

Requirements for particiPation.--In order to participate in the state

appropriation for the Junior College Minimum Foundation Program a district

shall provide evidence of its effort to maintain an adequate junior college

program which shall meet minimum standards prescribed by the state board.

Distribution olan.--$76,240,480. The cost of the Junior College Foundation

Program for each junior college is made up of the computed cost for

instructional salaries, transportation, and current expense other than

instructional salaries and transportation.

The amount to be provided toward the cost of the Junior College Minimum

Foundation Program by each district approved by the state board to operate

or participate in the support of a junior college is 95 percent of the

calculated yield of three-tenths of one mill of tax levied on the total

non-exempt assessed valuation of the district. After July 1, 1971, districts

will not be required to provide financial support for junior colleges.

No school district or group of school districts supporting a junior

college can be required to make a financial effort of more than fifty

percent of the total cost of the Minimum Foundation Program for the

junior college.

The required local effort for junior college for 1970-71 is $8,736,986.

The district school board of each district participating in the support of

a junior college must annually appropriate to the junior college district

board of trustees an amount at least equal to the minimum required

financial effort. Any school board which fails to make the financial effort

required to support the junior college is ineligible to receive any state

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funds under the Minimum Foundation Program during such period of default.

One instruction unit is allotted for each twelve students in average

daily attendance (ADA) in other than occupational programs for the first

420 students and one additional unit is allotted for each additional

15 students. One unit for each ten students in ADA in occupational

programs is allotted. One unit or proportionate fraction is allotted for

administrative and special instructional services for each eight

instruction units and one unit or proportionate fraction is allotted for

student personnel services for each 20 instruction units.

The amount included in the program for instructional salaries during

the regular term is determined by multiplying the number of units, represented

by persons holding certificates based on various academic classifications,

by the Junior College Minimum Foundation Program salary value of instruction

units as follows: an earned doctor's degree (Rank I) by $6,700; and earned

master's degree (Rank II) by $6,100; and earned bachelor's degree (Rank III)

by $5,700; three to three and nine-tenths years of college training (Rank IV)

by $3,900. An additional $300 is added to the value of each instruction unit

sustained by instructional personnel in Rank III or above who hold a continuing

contract; and another additional $300 is added if such instructional person

has completed ten years efficient teaching service in Florida public schools.

The amount included for salaries during the regular term is increased by

three and one-half percent for administrative and special instructional

service personnel and student personnel services personnel employed beyond

the regular term. The total amount included for salaries is increased by

five percent, to provide for staff and program development.

An amount for current expenses other than instructional salaries and

transportation is calculated at the rate of $1,900 for each junior college

instruction unit. For administrative expenses, including salaries, of the

-17-

first approved junior college center in each district $17,500 is added, and

$10,000 is added for each additional center approved by the state board.

One transportation unit, or proportionate fraction, is allowed for

each 30 junior college pupils in ADA transported at public expense the pre-

ceding year to a public junior college. Pupils must live at least two miles

from the junior college. The amount for transportation is determined by

multiplying the number of transportation units by $1,250.

If the ADA in any junior college for the first two months of any

academic year :s greater than the ADA in the junior college during the

first two months of the preceding academic year, the department of

education has the authority to increase the state portion of the foundation

program fund for such junior college by the percentage of increase in

average daily attendance. State board regulations provide that ADA for

the first two months be determined by adding the total student semester

hour registration at the close of fall registration divided by 15 and

the total student attendance hours in approved non-credit courses during

the first 40 days of classes during the fall term divided by 180. These

additional amounts are known as "recalculation funds." The total allowable

cost of the Junior College Foundation Program is determined by the total

of the amounts calculated for salaries, transportation, current expense,

administrative expense, and recalculation funds. From this total is

subtracted the required local contribution. The balance, or remainder,

is provided by the state. Funds for salaries, transportation, and other

current expense are distributed to the junior college district board of

trustees in twelve approximately equal monthly payments beginning July 1

each year and are solely for junior college expenditure. Recalculation

funds are distributed in six approximately equal monthly payments beginning

January 1 each year.

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DISTRICT AD VALOREM TAX EQUALIZATION FUND

Legal Authorization.--Section 236.072, Florida Statutes.

Requirements for participation.--A district must have an assessment level

equal to or above that of the state-at-large, must have levied ten mills

of tax for operating purposes the prior year and must have an average

yield per mill of taxation per pupil which is less than the average

state-wide yield per mill per pupil.

Distribution plan.--$7,000,000. The allocation to a school district is

determined as follows: (1) Multiply the total state-wide non-exempt assessed

valuation for the prior year as adjusted to one hundred percent by one mill

and then divide the result by the ADA in grades 1-12 for the prior year.

The quotient is the state-wide yield per mill per pupil; (2) Multiply the

district's non-exempt assessed valuation for the prior year as adjusted

to one hundred percent assessment by one mill and then divide the result

by the ADA in grades 1-12 in the district for the prior year. The quotient

is the average yield per mill of taxation per pupil for the district; (3)

Compare the district yield per mill per pupil to the state-wide average

yield per mill per pupil; (4) If the district yield is less than the state

average yield, multiply the amount of dollars the district is below the

state average per mill per pupil by the number of pupils in ADA in grades

1-12 for the prior year in the district; (5) Multiply this product by the

difference between the millage for required local effort in the MFP and

seven mills, which will be three mills in 1970-71, two mills in 1971-72,

and one mill in 1972-73; (6) The amount thus obtained will be the amount

to be allocated to the district. The amount available to any district

will be distributed in twelve monthly payments as nearly equal as practicable,

except for the 1970-71 year no distribution will be made until after

January 1, 1971 and shall consist of no more than six monthly payments.

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If the funds appropriated are not sufficient to pay the requirements in

full, the commissioner of education will prorate the available funds. This

program will terminate July 1, 1973 when the required local effort for

participation in the MFP reaches seven mills.

DISTRICT CAPITAL OUTLAY AND DEBT SERVICE SCHOOL FUND

Legal Authorization.--Art. XII, Sec. 9, Constitution of the State of Florida,

and Sections 236.03, 236.07(7) and 230.767(5), Florida Statutes.

Requirements for participation.--Each district must earn instruction units

under the State Foundation Program.

Distribution plan.--$29,906,450. Capital outlay and debt service needs are

recognized in the state foundation program through an allowance of $400 per

instruction unit. Support for this portion of the foundation program is

separately provided through a Constitutional amendment (Sec. 9, Article XII),

earmarking the first proceeds of revenue derived from motor vehicle license

sales. Capital outlay and debt service funds for kindergarten and grades 1-12

are increased by the same percentage that other state funds for the Minimum

Foundation Program K-12 are increased for recalculation. However, these

recalculation funds are provided from the state general revenue fund rather

than from earmarked motor vehicle license funds, but must be used in the

same manner as other capital outlay and debt service funds, except as a basis

for selling bonds.

At the request of each school district, bonds may be issued by the

state board of education (SBE) for and on behalf of the district to the

extent that annual principal and interest payments do not exceed 75 percent

of the district's annual entitlement. These bonds are referred to as "State

School Bonds." The district's share from the earmarked proceeds of the state

motor vehicle license fees is pledged for the redemption of these bonds. The

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state commissioner is the agent of the state board responsible for the

administration of Section 9, Article XII, and is authorized to provide

personnel in the department of education (DOE) for the purpose of carrying

out the fiscal duties and responsibilities of administering the provisions

of this section. An administrative expense fund is provided by a deduction

from the District Capital Outlay and Debt Service School Fund each year, at

a percentage rate determined by the state board, to be used for payment

of salaries of personnel and expenses of administering Section 9, Article XII.

Direct costs of issuing bonds under this section including cost of printing

bonds, court fees, legal advertising, approving attorney's fee, official

statement preparation and printing, and costs of signing and delivery of

bonds are charged to the districts in whose behalf the bonds are issued.

These costs are deducted from the distribution of District Capital Outlay

and Debt Service School Funds for such districts. The state board of

administration (SBA) is designated as the agent for the state board of

education for administering the debt service on such bonds and the invest-

ment of capital outlay funds from the District Capital Outlay and Debt Service

School Fund and proceeds of bonds issued under Section 9, Article XII.

Earnings on investments other than debt service reserves are distributed

among the districts in proportion to their respective equities in the funds

invested and are used for capital outlay purposes in the same manner as

current capital outlay and debt service funds. Interest earned on

investments of debt service funds for each district is applied on future

debt service requirements of such district. From the amount of capital

outlay and debt service funds each district is entitled to receive there

is deducted the amount necessary to meet debt service requirements, to

provide administrative expense for DOE and SBA, and to pay direct costs of

issuing bonds. The remaining portion of each district is sent to the

-21-

district to be spent on projects included in the district's priority list.

The district's priority list is based on a school facilities survey

conducted under regulations of the state board. After all capital outlay

needs in a district have been met, any remaining funds may be used in

accordance with a plan for expenditure determined by the district board and

approved by the state board.

These funds are distributed in September and March of each year to the

district school boards separately for the K-12 school program and for the

junior college program. The law provides that funds for the junior college

program are distributed to the school board of the district of location which

transfers such funds to the junior college district board of trustees. The

recalculation funds provided for the K-12 program are distributed in March

each year.

DISTRICT SCHOOL SALES TAX TRUST FUND

Legal Authrization.--Sections 236.075, 236.03, and 230.074(2), Florida Statutes.

Requirements for Darticivation.--Each district must earn instruction units

under the state foundation program.

Distribution ipan.--$38,374,420. This fund is apportioned, within limits of

the legislative appropriation, at the rate of $500 per instruction unit and

is for the purpose of providing the funds necessary to meet the required

payments to the teachers' retirement system and to the state and county

officers and employees' retirement system. The funds are distributed to the

district school boards for the K-12 school program and to the junior college

district boards of trustees for the junior college program in twelve

approximately equal monthly payments beginning July 1 each year. If a school

board or junior college district board of trustees fails to make these

required payments, the state comptroller is required to deduct the amount

owed from the sales tax allocation accruing to the school district or junior
-22

college and remit it directly to the appropriate retirement fund for the

credit of the school district or junior college. District School Sales Tax

Funds for kindergarten and grades 1-12 are increased by the same percentage

that state funds for the Minimum Foundation Program K-12 are increased for

"recalculation." These recalculation funds are distributed to school

boards, 35 percent in January, 35 percent in February and the balance in

March each year. Sales Tax Funds for junior colleges are increased by

the same percentage that state funds for the Junior College Minimum

Foundation Program are increased for "recalculation." Junior college

recalculation funds are distributed to the junior college district board

of trustees in six approximately equal monthly payments beginning

January 1 each year.

DISTRICT SCHOOL ADDITIONAL CAPITAL OUTLAY TRUST FUND

Legal Authorization.--Section 236.074, Florida Statutes.

Requirements for oarticipation.--Each district school system is required

by law to create a separate fund known as the School Construction Fund.

Distribution plan.--$23,827,200. Each district's share of this fund

amounts to $800 for each pupil increase in ADA in grades 1-12 for the last

completed school year over the next preceding school year. ADA for the

preceding year may never be computed for purposes of this allocation as less

than the ADA for any school year commencing with and subsequent to the

1955-56 school year. Officially committed funds are transmitted to the

districts when needed to meet capital outlay requirements.

Funds received under this act are to be used only for acquiring,

building, constructing, altering, improving, enlarging, furnishing, equipping

or payments on lease purchase agreements for capital outlay projects for

school purposes approved by the department of education and in accordance

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with the findings of the state board as to priority of needs as shown by

a survey or surveys. Funds may be invested, as provided by law, until they

can be utilized, as required by this section. All funds and the interest

earned by investments of these funds must be expended for no purpose other

than provided for under this act.

RACING COMMISSION FUNDS

Legal Authorization.--Section 550.14, Florida Statutes, and Special or Local

Acts of the Legislature.

Requirements for Darticipation.--Money accruing to each district board under

this section must be earmarked by local or special law for distribution to

the board or allocated by resolution of the board of county commissioners.

Distribution lIan.--$11,200,000. Funds under this section are distributed in

equal amounts to each county and are paid to the board of county commissioners

except in cases where there is a local or special law providing that a

definite portion of such monies shall be paid directly to the school board

in that county. Some local and special laws earmark a definite proportion

of the funds distributed to the board of county commissioners for remittance

to the school board. Each board of county commissioners may by resolution

apportion all or any part of funds received, which are not earmarked by

local or special law for other county purposes, to the school board to be

used for payment of teachers' salaries or for pupil transportation expenses.

During 1970-71, Racing Commission Funds for distribution to the 67 counties

are estimated at $28,000,000, of which an estimated $11,200,000 will be

used for the public schools.

STATE TEXTBOOK FUND

Legal Authorization.--Sections 233.01-233.50, Florida Statutes.

Requirements for participation.--Counties are required to file reports

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annually and are required to submit necessary requisitions.

Distribution plan.--$8,211,281. This fund is allocated, but not distributed

to the district school systems. All textbook purchases are made by state

contract. Districts file requisitions for the books needed. This fund is

available for use at the beginning of the fiscal year and is used during

the year as requisitions are filed to provide free textbooks for pupils in

the public schools of the state in grades 1-12.

By the beginning of each fiscal year, a credit in the state textbook

appropriation is apportioned to each district. This credit is the amount

for which districts can requisition textbooks during the school year. In

determining the annual apportionment, the average annual per pupil cost

(current average replacement cost) of textbooks for grades 1-3, 4-6, 7-9,

and 10-12 is computed in each category. The replacement cost is one-fifth

the computed current inventory cost for a set of books for each student,

since the average life of a textbook is five years. Each district's

allocation is computed by multiplying the average annual per pupil cost

in each category by the latest official district enrollment figures

increased by the estimated state-wide percentage increase in enrollment.

The sum of the totals for each category constitutes the district base

allocation.

In the fall a supplementary allocation is made. This consists of

an adjustment to the base allocation computed on later official enrollment

figures (preceding year) and a supplement to the base allocation determined

by multiplying any increase over the previous year in the current year's

first month membership for each grade group by the inventory cost for

that grade group. Districts are also given additional credit in the

textbook allocation for losses suffered from fire (unless covered by

insurance), storm, or other causes. The commissioner reserves a sufficient

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portion of the textbook appropriation to cover necessary freight charges,

printing of new publications, rebinding, large-type books for the partially

sighted, and other costs of state textbook administration. The base allocation

plus the supplementary allocation constitute the total textbook allocation

for each district. If funds appropriated are not sufficient to purchase all

the books computed as necessary for the total textbook allocation, each

district's allocation is prorated.

JUNIOR COLLEGE CONSTRUCTION FUND

Legal Authorization.--Article XII, Section 9, Constitution of the State of

Florida and implementing legislation.

ReouLrements for particitation.--State board approval and specific legislative

authorization to establish a junior college must have been granted a county or

group of counties.

Before funds available for junior college construction are released,

certain requirements must be met. A survey must be made under the supervision

of the department of education to establish the needs for junior college

facilities. A description of the proposed projects based on the survey must

be submitted to the state commissioner for review. The proposed building

program, along with recommendations of the state commissioner, must then be

submitted to the state board of education for approval. Upon request from

the junior college, after proper budget procedure and approval of plans and

specifications, disbursements are made to meet construction requirements.

Distribution plan.--$15,459,800. Support for the Junior College Construction

Fund is provided by the Constitutional amendment which provides for the sale of

bonds to be retired from utilities gross receipts taxes. The state board of

education has been granted authority by the legislature to issue bonds, the

proceeds of which are to be used for capital outlay projects for institutions

-26-

of higher learning, junior colleges and area vocational-technical centers.

The total capital outlay needs are projected for each division and bond

proceeds are prorated by the state legislature to the three divisions

according to these needs.

The division of community colleges uses a formula in which a set of

size and utilization standards are applied to the projected enrollment

of each institution to determine the amount of space needed. Current

inventories are deducted and the net space needed is multiplied by an

estimated construction cost to determine the funds needed for construction.

Size and utilization standards have been established for each type of

space needed, i.e., classrooms, laboratories, libraries, etc. Provision

for variation in size of institutions is made by using different factors

for colleges with projected enrollments of 0-1000, 1000-2000 and over

2,000. As funds become available in the Junior College Construction Fund,

they are allocated to the various junior colleges on the basis of

priorities established to meet the most pressing needs as determined by

the formula.

VOCATIONAL-TECHNICAL CENTER CONSTRUCTION FUND

Legal Athorization.--Article XII, Section 9, Constitution of the State

of Florida, implementing legislation.

Requirements for participation.--A school board or school boards of

contiguous districts must have approval of the state board to organize,

establish and operate an area vocational-technical center or acquire and

operate a vocational-technical school previously established. Resolutions

by each district board are necessary when two or more districts wish to

cooperate in the establishment of an area school. Any area vocational-

technical center to be established must comply with criteria established

-27-

by the state board for vocational education and the law and such criteria

must not require more than 150 full-time equivalent students for establishing

a new vocational-technical training center.

Before funds available for vocational-technical center construction

are released, certain requirements must be met. A survey must be made under

the supervision of the department of education to establish needs for

vocational-technical center facilities. A description of the proposed

projects based on the survey must be submitted to the state commissioner

for review. The proposed building program, along with recommendations of

the state commissioner, must then be submitted to the state board of education

for approval. Upon request of the district school board, after proper

budget procedure and approval of plans and specifications, disbursements

are made to meet construction requirements.

Distribution plan.--$3,251,500. Support for the Vocational-Technical Center

Construction Fund is provided by a Constitutional amendment, which provides

for the sale of bonds to be retired from the utilities gross receipts taxes.

The state board of education has authority to issue bonds for which payment

of principal and interest is pledged from all and any part of the revenue

derived from the utilities gross receipts taxes. Funds derived from the

utilities gross receipts taxes and proceeds of bonds pledging such funds

for payment are for capital outlay projects for institutions of higher

learning, junior colleges and area vocational-technical centers. The total

capital outlay needs are projected for each division and bond proceeds

are prorated by the state legislature to the three divisions according to

these needs.

Area vocational-technical centers are planned to provide services and

programs in vocational-technical education and adult general education.

Enrollment projections are made for each group. Instructional space

-28-

requirements are computed on the basis of a utilization factor per student

station experienced in the state applied to a square footage requirement

per student station for the appropriate type of specialized shop, laboratory,

or classroom. Facilities needed to provide supportive services are

determined. Current inventories are deducted and the net space needed is

multiplied by an estimated construction cost to determine the funds

needed for construction. As funds become available in the Vocational-

Technical Center Construction Fund, they are allocated to the various

centers on the basis of priorities established to meet the most pressing

needs.

EXCEPTIONAL CHILD EDUCATION EQUIPMENT FUND

Lezal Authorization.--Chapter 70-95, Laws of Florida.

Requirements for participation.--Each district must have approved exceptional

child units under the State Minimum Foundation Program.

Distribution plan.--$427,500. This fund is apportioned within limits of

the legislative appropriation, at the rate of $750 per approved new

exceptional child unit. These funds are exclusively for capital outlay

expenditures for the specialized equipment necessary for the initiation

of new programs and activities for exceptional children enrolled in the

special education program. Items of equipment purchased must meet criteria

established by the state board.

Basic classroom furniture can be purchased only for new classrooms

initiated over the previous year as determined by the increase in approved

exceptional child units. Funds are distributed on a reimbursement basis

for items included in a project plan and detailed budget approved by the

state commissioner.

EXCEPTIONAL CHILD EDUCATION FACILITIES FUND

Legal Authorization.-Chapter 70-95, Laws of Florida

Requirements for participation.--A district must have approved exceptional

child units under the Minimum Foundation Program and approval of the

state board.

Distribution plan.--$3,572,500. This fund is allocated to selected districts

on the basis of program need as established in accordance with criteria and

priorities approved by the state board. Funds must be used for construction

of specialized classrooms and related facilities not normally included as

part of regular school construction, where a concentration of classrooms

is required to provide a sequential program.

To be eligible the proposed facilities must meet the requirements of

all laws and regulations relating to school construction, be recommended

by the school survey section and approved by the school plants section of

the department of education; the education specifications must be approved

by the exceptional child section and the bureau of school facilities of the

department of education; the district must agree to use the facilities for

the purposes planned unless equivalent facilities are provided at a new site

and sufficient justification is given for disbanding such facilities; and

there is ample evidence that a quality program can be placed in operation,

with appropriate teaching personnel, materials and supplies, supervision,

and necessary transportation. Applications submitted are reviewed by the

related sections of the department of education and presented to a review

committee for recommendation to the state board.

PUBLIC SCHOOL DRIVER EDUCATION FUND

Legal Authorization.-Section 233.063, Florida Statutes.

Requirements for Darticipation.--All secondary schools are required to

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provide a course of study and instruction in the safe and lawful operation

of a motor vehicle. The course of study and the employment of instructors

must be administered in accordance with regulations of the state board.

Distribution plan.--$2,100,000. Funds are distributed, within limits of

the appropriation, for driver education expenditures. Each district is

entitled to one driver education unit, or proportionate fraction, for

courses in which each of 125 pupils is provided a minimum of 30 hours of

classroom instruction and an average minimum of 6 hours actual driving

experience exclusive of observation time in the practice driving vehicle.

For each driver education unit earned, the district is apportioned

for teachers' salaries, an amount equal to the unit value provided in the

foundation program for salaries according to the rank and contract status

of the instructor, or salary actually paid, whichever is smaller; and

for current expense, up to $700 per driver education unit. Funds computed

on attendance data for each semester are distributed to districts after

the close of that semester as soon as final reports from all districts

have been submitted and approved.

If the cost of units requested exceeds the funds available, each unit

shall receive a pro rata share of available funds. Any balance at the

close of the year reverts to the general revenue fund.

STATE SCHOOL FUND

Legal Authorization.--Article IX, Section 6, Constitution of the State

of Florida.

Requirements for particioation.--Districts must operate public schools.

Distribution plan.--$1,000,000. This fund is the interest earned on

investments of the principal, and may include the principal, of the State

School Fund. It is distributed to local school districts as a part of

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the State Foundation Program Fund K-12 and is not separately distributed.

PROVISIONS FOR FEDERAL SCHOOL REVENUE

The state board of education must approve plans for cooperating with the

federal government in carrying out any phase of the educational program in

which it finds cooperation desirable and must provide for the proper

administration of funds apportioned to the state from federal appropriations.

The state board is responsible for prescribing regulations covering all

contracts or agreements made with federal agencies for funds, services,

commodities or equipment by tax supported schools or institutions and school

systems under its control or supervision. All funds accruing from contracts

entered into by a district school and a federal agency, pursuant to

regulations of the state board, must be accounted for as prescribed by

the state board.

The state commissioner is responsible for recommending ways of

cooperating with the federal government on any phase of the educational

program in which he feels cooperation desirable. It is his duty to

recommend policies for administering funds appropriated from federal

sources and apportioned to the state for any educational purpose, and to

execute or provide for the execution of all plans and policies approved

by the state board.

Local school systems receive funds from the federal government both

directly and through the state as a distribution agency. Federal school

funds received by local school systems may be administered by various

agencies such as the department of labor, veterans administration,

department of interior, department of health, education and welfare,

office of economic opportunity, department of defense and department of

agriculture.

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Some of the federal acts under which the local school systems receive

federal school revenue are:

National Defense Education Act of 1958, PL 85-864, as amended
Higher Education Facilities Act of 1963, PL 88-204
Manpower Development and Training Act of 1962, PL 87-415, as amended
Vocational Education Act of 1963, PL 88-210, as amended
Civil Defense Act, PL 81-920, as amended
Economic Opportunity Act of 1964, PL 88-452
Elementary and Secondary Education Act of 1965, PL 89-10, as amended
National School Lunch Act of 1946, PL 79-396, as amended
Veterans' Readjustment Assistance Act of 1952, PL 82-550, as amended
School Assistance (Construction) in Federally Affected Areas,
PL 81-815, as amended
School Assistance (Current Operation) in Federally Affected Areas,
PL 81-874, as amended
Civil Rights Act of 1964, PL 88-352
Federal Communications Act (ETV Facilities), PL 87-447

PROVISIONS FOR LOCAL SCHOOL REVENUE

PROPERTY ASSESSMENTS

Assessed valuations are established by county tax assessors who are

elected by popular vote in each county. The board of county commissioners

in each county serves as the board of tax equalization for the county with

authority to equalize individual assessment values fixed by the county tax

assessor. The state comptroller examines county assessment rolls for dis-

parities or errors. State law establishes factors which are to be considered

in determining property valuation and requires all county tax assessors to

assess all property in such a manner as to secure a just valuation. County

tax assessors are required to prepare assessment rolls based on 100 percent

valuation.

VILLAGE LEVIES

Each district school board, in accordance with the Constitution, is

authorized to levy a maximum of ten mills on the total non-exempt assessed

valuation of the district for support and maintenance of schools. This is

called the non-voted district millage and is levied by the district school

-33-

board without a vote of the people. The levy is usually made for general

purposes but a maximum of two of the ten mills may be set aside, upon

approval of the state commissioner, as a special reserve earmarked for

capital outlay purposes.

The qualified electors who are owners of freeholds therein not wholly

exempt from taxation may vote in the county-wide district to determine an

additional school millage levy. This levy, which in accordance with the

Constitution can be levied for periods not longer than two years, is on

the total non-exempt assessed valuation of the county. A maximum of four

mills of this voted millage may, if approved at the election, be set

aside in a special reserve fund for capital outlay purposes. Tax funds

from this levy are for the support and maintenance of schools, unless

set aside for capital outlay purposes, and augment the district revenue

described above. District school systems have no non-property taxes.

District millage levies for debt service created by virtue of voted

bond issues are set by the school board under the advisory supervision of

the state commissioner according to need for servicing the issues. Millage

levies for debt service are unlimited by law; however, state board

regulations initially limit such levies to six mills except with specific

board approval. Millage levied for debt service is in addition to the

millage levied for current school operation.

Any district board desiring to participate in the K-12 Minimum

Foundation Program is by statute limited to a tax levy on ten mills on

the non-exempt assessed valuation of the district, exclusive of district

millage voted for (1) capital outlay purposes, (2) required debt service,

(3) required junior college minimum effort, (4) required additional

kindergarten local effort, (5) deficit of state funding of retirement

matching, and (6) the amount of money necessary to replace any decrease

-34-

from the previous year in funds from PL 874 (federal impact funds).

PROVISIONS FOR SCHOOL INDEBTEDNESS

INITIATING BOND ISSUES

The proposal for issuing bonds may be initiated by a petition signed by

not less than 25 percent of duly qualified electors residing in the

district or the district school board may initiate the proposal for

issuing bonds.

LIMITATIONS ON ISSUANCE OF BONDS

Serial bonds are required and they must be retired over a maximum

of 20 years unless a longer period is specifically approved by the

state board.

LIMITATIONS ON DEBT

State board regulations limit the amount of school bonded

indebtedness to 10 percent of the non-exempt assessed valuation of the

district except with specific approval of the state board.

VOTING REQUIREMENTS

Proposed bond issues must be approved in a special election.

However, such special bond election may be held at the same time and

place as another election. A proposed bond issue is approved only

when a majority of the ballots in an election by freeholders who are

qualified registered electors residing in the district cast are in favor

of the issue.

APPROVAL AND SALE OF BONDS

All applications for bond issues are checked by the department of

education prior to the validation proceedings for the bond issue to

assure that the debt limit will not be exceeded and that the schedule

of maturities has been properly prepared. Annual payments required for

-35-

all indebtedness in the district must be approximately equal. The district

must show that the amount proposed is needed for the proposed project and

cannot be provided in any other manner. The proposal for a bond issue

must be approved by the state commissioner before the district board approves

any petition for a bond issue.

The department of education, on request, provides assistance

of an advisory nature, on matters relating to the sale of such bonds.

Bonds are frequently sold on a yield basis, although a fixed interest

basis is permitted by law. Bonds need not be offered to a state agency.

If the interest exceeds 2.99 percent, bonds are required to be callable

after 10 years. Proceeds from bond sales may be invested when their use

is not immediately required.

BOND RECORDS, TAX LEVIES, AND PAYMENTS

The district school board keeps all school district bond records,

is responsible for repayment of the bonds, and is required to certify to

the board of county commissioners the necessary levies to retire the bonds.

Levies for debt service are in addition to the voted and non-voted

village levies on the non-exempt assessed valuation of taxable property

for current school expenditures. Such levies must be of sufficient amount

to cover the cost of debt service. The millage levy required to service

all outstanding bonds may not exceed six mills except with specific approval

of the state board.

SHORT-TERM INDEBTEDNESS

By statute, district boards may borrow up to 80 percent of the revenue

anticipated from district taxes at a rate of interest not exceeding 6 percent

per annum as a current loan repayable in the same fiscal year. If at any

time any current indebtedness is incurred which cannot be repaid during

the year because anticipated revenues are less than the amount budgeted,

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such indebtedness becomes a prior claim to funds for the next year. In

the event the county tax roll is in litigation and the tax collector is

prevented from collecting taxes, the 80 percent restriction does not

apply if the collection of taxes is delayed beyond May 1. Under such

conditions the district board also has authority to borrow money at a

rate not to exceed 6 percent per annum to pay debt service necessary

for the outstanding bonds at the times needed to prevent the bonds or

interest payments from being in default. The amount borrowed is limited

to the amount of the district interest and sinking fund tax receipts

included in the official budget or the amount necessary to meet such

obligations, whichever is lesser. Any money borrowed for payment of

such debt service must be repaid from the district interest and

sinking fund.

Loans for capital outlay purposes may be incurred for a period of

one year; however, any such obligation may be extended from year to year

with the consent of the lender for a period not to exceed four years.

The rate of interest on such loans may not exceed 6 percent per annum.

Such loans must be approved by the state board and the amount of such

loans at any time may not exceed 25 percent of local tax revenues

received in the previous year. The state board, by law, cannot approve

more than two such loans for any district during any one year. Funds

required for payment of such obligations maturing during the year are

required by law to be budgeted from current revenue during the period

of the loan.

PROVISIONS FOR SCHOOL BUDGETS

BUDGET FORMS

Budget forms for all school systems are prescribed by the state

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board and provided by the state. Districts may, however, use any supplementary

forms they find desirable. The school fiscal year in all district school

systems covers the period from July 1 through June 30.

LOCAL APPROVAL

School budgets are prepared by the district superintendent and

submitted to the district board on or before July 15. Before final approval

can be made, the district board must have a summary of the tentatively

approved budget and the proposed millage levies advertised. The advertisement

of the budget must include the date, before August 1, on which a public

hearing will be held concerning the tentatively approved budget.

Junior college budgets are prepared by the junior college presidents

and recommended to the boards of trustees. Upon approval of a budget by

the board of trustees, the budget is submitted to a budget review board

composed of five members of the district school boards) of the school

districts participating in the support of a junior college. Budgets are

submitted to the state commissioner by June 1. If the budget review

board disapproves the budget, however, the due date is extended to June 10.

Tax levies for school purposes, as certified by the district school

boards, must be made by the tax assessor.

STATE REVIEW AND APPROVAL

On or before August 1 of each year, each district's annual school

budget is required by law to be submitted to the state commissioner for

approval. The state board prescribes all necessary regulations to guide

the state commissioner in examining budgets submitted by the district

boards. The state commissioner has authority to require budgets to be

revised only when they have not been correctly prepared; that is, when

the proper forms have not been used, the estimates are incorrect, budgets

are out of balance, proposed expenditures are illegal, or when tax levies

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proposed are not adequate to assure the proper maintenance and support of

the public schools as prescribed by law.

If the tax levy proposed is not adequate, the state commissioner

certifies the levy which is required, provided such levy does not exceed

ten mills which is the maximum authorized by the Constitution for the

non-voted district tax levy, to the district board. The district board

must amend its proposed budget and require the proper levy to be made in

accordance with the direction of the state commissioner. The state

commissioner may recommend additional changes in budgets but has no

authority to require such changes except where expenditures of funds

received from state sources are concerned. Severe penalties are

prescribed for the district board officials who authorize expenditures

exceeding the appropriations in the official budget or who authorize

illegal expenditures of public school funds.

PROVISIONS FOR SCHOOL AUDITS

The legislative auditor is responsible for making an annual

post-audit of each district school system. Audits generally are made

after the close of the fiscal year. There is no charge made against

the school system for the audit. A copy of the audit report is

submitted to the legislative auditing committee, the governor, the

district school superintendent, the district school board, the state

comptroller and the state commissioner of education. The legislative

auditor is required to report any instances of shortages, defalcations

and irregularities disclosed by the audit to the legislative auditing

committee, the governor, and the state comptroller. It is the duty

of the comptroller to adjust and settle, or cause to be adjusted and

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settled, all accounts and claims which the proper district authorities

have failed to adjust and settle. In some cases an account or claim may

be certified by the comptroller to the attorney general to be prosecuted

by him. Local school officials are subject to removal from office by

the governor for violation of the law and are personally liable for

any amounts improperly expended.

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