IMPACT AID:OVERVIEW AND BASICS

NCIS CONFERENCE

April – 2010Robert Edmonson

Executive Director Business Services

Copperas Cove ISD

The Answers To Such Questions As:• WHAT IS FEDERAL IMPACTION?• WHAT IS IMPACT AID?• WHY IS THERE AN IMPACT AID

PROGRAM?• WHAT ARE THE MAJOR PROVISIONS OF

THE LAW?• HOW DO SCHOOLS GET THE MONEY?• WHAT ARE THE PAYMENTS BASED UPON?• HOW IS “NEED” DETERMINED?• HOW IS A DISTRICT’S PAYMENT

COMPUTED?

WHAT IS FEDERAL IMPACTION?

Military BaseIndian Trust or Treaty LandFederal Low Rent Housing ProjectCivil Service (Government) Activities

VA HospitalsFederal PrisonsFederal ParksFederal Office Buildings

Soldiers and Sailors Relief ActExemption from state/local taxes

WHAT IS THE EFFECT OF FEDERAL IMPACTION ON

LOCAL SCHOOLS?Non-local students brought into the area; andDue to Non-taxable status of federal land, the

ability of the school to raise revenue is reducedFederal ownership of homesFederal ownership of places of workIndian Trust and Treaty lands

Due to Soldiers and Sailors Relief Act, military personnel may be exempted from vehicle/personal property taxes

Generally, schools have three sources of revenue:

1) State Aid amounts to about 50% of revenue2) Taxes on local business/industries amount to

about 25% of revenue3) Taxes on local homes and vehicles amount to

about 25% of revenue

Federal Activities IMPACT two of these three sources

A Federal Financial Impact?

0102030405060708090

100

Normal Impact 1 Impact 2 Impact 3

% o

f Rev

enue

per

Stu

dent

Local Taxes onHomes

Local Taxes onBusiness

State Aid

WHAT IS IMPACT AID?To make up for this negative federal impact, In 1950, Congress passed Impact Aid

PL 81-874 (operations)PL 81-815 (facilities)

Impact Aid is the ORIGINAL Federal Education ProgramTitle I, IDEA, etc. were all amendments to the Impact Aid

lawImpact Aid was the vehicle to get the ESEA put into law

Major changes in the 1994 ReauthorizationLast reauthorization 2002; now referred to as

Title VIII of PL 107-110

Impact Aid is a UNIQUE Federal Education Program

• Impact Aid goes straight to the LEAs, no state rake-off

• Impact Aid is SUPPLANT, not supplement

• By Federal law, states can NOT consider IA when calculating the amount of state aid

• Exception: EQUALIZATION!!!!!!! (more later on this)

Impact Aid has always been flexible with local control

IA is one of the ONLY federal education programs that sends funds directly to the school district, thus there are few strings and little bureaucracy

The funds are used for the benefit of all students in the districtThere is no “rake off” by the states to fund bureaucrats

Most Impact Aid goes into the General Fund

May be used as the local school decidesMay be used for any legal purpose under state lawSUPPLANT, SUPPLANT, SUPPLANT

REVIEW

Impact Aid is the “umbrella program” that provides financial assistance to schools that are impacted by

federal activities.These federal activities include:Federal ownership of land (removing it from the tax rolls);

and/orBringing additional students into the area that the school is

required to educate

DO MORE WITH LESS

Impact Aid Has Five Different “Pots of Money”

§ 8002- FEDERAL PROPERTY payments to LEAs with a large percentage of federal property

§ 8003 (b)- BASIC SUPPORT payments for federal students

§ 8003 (d)- DISABILITY payments for federal students who have disabilities (SPED)

§ 8007- CONSTRUCTION payments to heavily impacted LEAs for capital/construction needs

§ 8008- DoED FACILITIES payments to LEAs to maintain facilities owned by DoED

Impact Aid is one of the largest federal education programs.

In FY 2010, the total appropriation for Impact Aid is

$1,276,183,000

Most of the Impact Aid Appropriations are in § 8003

$400,000,000

$500,000,000

$600,000,000

$700,000,000

$800,000,000

$900,000,000

$1,000,000,000

$1,100,000,000

$1,200,000,000

$1,300,000,000

$1,400,000,000

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Total IAApprops

Section8003Approps

§ 8002 pays for LAND

Acquired by federal government since 1938; and

Not acquired by exchange for other federal property; and

Assessed valuation of property is at least 10% of the total district valuation when the property was acquired; and

The school is not receiving substantial increases in revenues from federal activities on the property.

§ 8002 pays for LAND

Local assessor determines the “highest and best use” of adjacent non-federal property and uses this to “value” the federal property

School district’s tax rate multiplied by the estimated valuation of the federal property to determine maximum payment

Insufficient appropriations to pay for maximum payment, so “waive payments” are used to prorate the payments to the need.

§ 8003 pays for STUDENTSWho are the federal students?

Military Indian Trust and Treaty Lands Civil Service employees Low Rent Housing Students Others who work on federal land

A district may have only one type of federal student or they may have all types.

Challenges and Changes in Impact Aid

Impact Aid has not received sufficient appropriations (not enough money)

Impact Aid is the ONLY major federal education program that is NOT “forward funded” (delayed payments,

difficulty budgeting and accounting for) Impact Aid has seen massive demographic changes in

the last 15 years due to BRAC, Iraq, other deployments, NCLB AYP requirements, and even welfare reform (fewer federal students)

Demographic changes have been massive across the nation.

• In 1994, there were 2,454 LEAs getting §8003 funds

• In 2010, there are only 1,211 LEAs still receiving these funds (including all the new Charter schools)

• 51% decrease!0

500

1000

1500

2000

2500

1994 2009

LEAs

Nationally, there are fewer and fewer federal students reported each year.

0

400,000

800,000

1,200,000

1,600,000

2,000,000

1994 2010

FederalADA

• Nationally, there were 1,768,222 federal students in 1994.

• By 2010, there were only 935,527

• This is a drop of 48%

Nationally, the decreases in the number of federal students seem to be accelerating in the

last few years.

800,000

900,000

1,000,000

1,100,000

1,200,000

2002 2003 2004 2005 2006 2007 2008 2009 2010

Federal ADA

How have the types of students changed nationally since 1994?

• Almost 196,000 military students (36% drop) (Military on-Base -92,000 or -47%; Military off-Base -103,000 or -29%)

• Almost 274,000 Low Rent Housing students (53% drop)

• Over 381,000 Civilian students (64% drop)

• About 8,900 Indian Lands students (7% drop)

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

1994 2010

Military

LRH

Civilian

IndianLands

Changes in the last 6 years…..

60%

70%

80%

90%

100%

110%

2003 2004 2005 2006 2007 2008 2009 2010

On Base Military

Off Base Military

Indian Lands

Changes in the last 6 years…..

75,000

100,000

125,000

150,000

175,000

200,000

225,000

250,000

275,000

2003 2004 2005 2006 2007 2008 2009 2010

On Base Military

Off Base Military

Indian Lands

HOW MANY FEDERAL KIDS ARE WE TALKING ABOUT NOW?

About 935,500 Nation-wide

39%

12%

26%

23% Military-357,878

Indian Lands-114,219

Low Rent Housing-244,539

Civilains-217,777

HOW DO I GET THE MOST FOR MY DISTRICT?

Know the LAWBecome familiar with REGULATIONSImplement proven PROCEDURESDO THE MATH!!!!!!!!!!!!!!!Use contacts with the community (NETWORK)Use contacts with DoED!!!!!!!!!!Use “The Hill” (only in case of emergency)

Maximizing § 8003 Impact Aid Funds

What’s The Process? What Are The Steps?HOW DO WE GET PAID?

Since §8003 pays for Federal Students, we have to count them and send the count into DoED

The count is the STUDENT SURVEY Sending the count in to DoED is the APPLICATION

STUDENT SURVEY• The count of different types of federal

students enrolled in the school district

• Required every year

• The survey date is chosen by the district

• At least three days after start of school; but before January 31

• Results of survey will be put on the application sent to DC

Hints for the Student Survey

• Pick a day with the highest FEDERAL enrollment

• Early in the week (Monday)..NEVER a Friday

• Preferably in the latter part of the month

• One person in charge district-wide; campus coordinators at each campus

• Training

• Data support (enrollment lists, friendly forms, etc.)

Student SurveyTwo methods may be used to gather the information

A Student Survey Forms--signed by the parent

A Source Checks--signed by the school and the appropriate agency (Tribal official, Housing officer, Housing Authority Director, etc)

School districts may use either of these methodologies or may use both!

Student SurveySurvey Forms--signed by the parent

• Student’s name, address, birth date, grade, school, teacher, parent’s name

• If living on federal property --the name of the property

• If parent is military--the name, rank, and branch of service of the parent

• If parent is civilian working on federal property--the name, address of federal property, employer

• Must be dated and signed by the parent on or after the official survey date

Student Survey

Source Checks--certification of federal students for each federal property claimed

• Signed by the school and the federal property official….not signed by the parent

• Same information required for each federal student• School official signs that the info on grade, school,

teacher, birthday for all listed students is correct as of the survey date

• Federal property official signs that information on residence, military status, employment info is correct as of the survey date

Student Survey

For every federal student claimed, you need to have either:

Student survey form signed and dated by the parent on or after the survey date

ORSource check listing the student signed and dated

by the federal property official on or after the survey date

Or you can have both!!

The results (numbers and types of federal kids) from the survey

will be put on the applicationThese numbers of kids will determine the amount of

funding the district receives from:

§ 8003 (b)(1) Basic Support§ 8003 (b)(2) Heavy Impact (3 yrs)

§ 8003 (d) Disability§ 8007 Construction

Types of Federal Students1. SPED living on Indian Lands (Indian A SPED)

2. SPED Military living on other Federal property (US and Foreign) (Mil A SPED)

3. SPED Military not living on Federal (US and Foreign) (Mil B SPED)

4. Non-SPED living on Indian Lands (Indian A)

5. Non-SPED Military living on other federal property (US and Foreign) (Mil A)

6. Non-SPED Military not living on federal property (US and Foreign) (Mil B)

7. Civilian living on Federal property in the SD and parents work on federal property (Civ A)

8. Civilian living in federal LRH project in the SD (LRH B)

9. Civilian not living on federal property, but parents work on federal property in the state (Civ B)

HINTS ON FEDERAL STATUSMilitary does NOT include Reserves (unless they

were on ACTIVE DUTY on the Survey Day)

Military does NOT include National Guard (unless they had been FEDERALIZED on the Survey Day….National Guard is a STATE, not Federal agency)

Post Offices do NOT count as Federal Property (unless located in Federal Building or on military base)

Indian Lands MUST be Trust or Treaty Lands (some areas of Reservations have been sold off or are taxable)

Low Rent Housing ONLY counts if it is a Federal Project (State or Local Housing Areas do not count)

Survey results for the Application

Have all survey forms turned in from each campus.

Forms divided into SPED and Non-SPED

Check off from master enrollment list (will indicate what forms are missing)

Begin checking the forms and dividing them out into groups

Survey results for the Application….specifics!!

What do we do now?

Use any source checks to double-check the survey forms– If no forms for a student, are they on a source

check? If so, we can count them!

Sub-divide each of the groups by property

Alphabetize by property within groups

Survey results for the ApplicationWhat do we do now?

SPED Military on federal property Table 1 SPED living on Indian Lands Table 1 SPED Military off federal property Table 2 non-SPED Military on fed property Table 3 Civilians living & working on federal property Table 3 non-SPED living on Indian Lands Table 3 non-SPED Military off federal property Table 5 non-Military in federal Low Rent Housing Table 4 Civilians working on federal property Table 5

Remember……

You can use the survey forms

AND

source checks for students without forms!

Example:

SURVEY

FORMS

Military on Post 12 Military off Post 35 Low Rent Housing 25 Civ work only 25

97

No Survey TOTAL

On Source

+ 2 = 14

+ 1 = 36

+ 3 = 28

+ 5 = 30

+ 11 = 108

The survey is done and we have our count…now what?

We have to turn our count into the DoED in the

APPLICATION

The ApplicationRequired to be filed EVERY YEARInfo from survey put into the applicationUsed to determine NEXT year’s money Due to DoED and SEA by Jan 31 (normally)1 copy to DoED electronically; 1 copy to SEAIf late (up to 60 days), then 10% penalty to LEAIf more than 60 days late, then NO MONEY!!!Signatures by Board Authorized Representative

APPLICATION HINTS

Send all required data, signatures, and info§8004—Indian Policies & Procedures (IPP)Make sure the math adds up!!!!!!!!E-Submissions are only way to file now Keep several copies for your recordsRead instructionsCall DoED if you have questions!!!!!!!!!!!

Another Hint:Students may only be claimed once

each year and listed only on one Table!

Student living in a Federal Low Rent Housing Project on Indian lands whose father is active duty military and whose mother is a civilian who works on Federal Property

A Student May Only Be Counted on One Table Each Year!!!!!!!!!!

Other Tidbits About the ApplicationSecond Survey Date-

o Allowed, but full survey/application procedures have to be done again

o Results of Second survey averaged with the results of the Original survey

Amendment-o Do ASAP!!!!!!!o Electronically is preferredo Letter and Tables being amendedo Strike through and initial changeso Must be postmarked before September 30!!!

TABLES 9 & 11 HOUSING RENOVATION

Allows students that do not live on federal property to be counted as if they lived on federal property if the federal property is undergoing renovation

Applies to Indian Lands and MilitaryRenovation must be due to FEDERAL decisionLimit on number of students..must still be served by

the LEACan be a LARGE FINANCIAL IMPACT!!!!

Records and Information must be kept for 3 YEARS after final payment for that

year (5 years)(Hint: In a fireproof vault)

Student survey forms (alpha by table and property) Source Checks for each property Student enrollment reports for LEA as a whole and by

campus for the survey date Copy of Board Minutes naming Authorized Rep Previous Year’s IDEA count, audit, State Summary of

Finance

BACK-UP for everything put into the application

WHY?

Regulations require it

Field Reviews (AUDITS)

Results of these can either give more funds to the school or take them back

The Process to Get MoneyStudent Survey results from Fall, 2009 put onto

Application sent to DoED in Jan, 2010

and this Determines Dollars for 2010-2011 school year

APPLICATION IS IMPORTANT

APPLICATION TO DOLLARS

THE FORMULA§ 8003 (b) BASIC SUPPORT

1. Student Numbers from Application converted to Average Daily Attendance (ADA-Fed definition)

2. ADA then multiplied by Federal Student weights--called Weighted Federal Student Units (WFSUs)

3. WFUs multiplied by Local Contribution Rate (LCR)---the dollar driver

The result is the District’s Maximum Payment

Since we have lost federal ADA each year, we have also lost WFSU each year. This is why our Payments have not been too adversely affected with freezes in the past. But this is

now changing………

325,000

350,000

375,000

400,000

425,000

450,000

2002 2003 2004 2005 2006 2007 2008 2009

WFSU

So What’s Been Happening?

• Appropriations have not been increasing much

• At the same time the LCR (cost of education) continues to rise

• Now the LCR is rising faster than the decrease in WFSU

90%

100%

110%

120%

130%

140%

LCR

Appropriations

This means the payments are declining even quicker than before

FY Status Final Payment Level2002 Closed 150.76% of LOT2003 Closed 148.26% of LOT2004 Closed 144.37% of LOT2005 Closed 136.97% of LOT2006 Closed 136.96% of LOT2007 Open estimated 141% of LOT2008 Open estimated 138% of LOT2009 Open estimated 127% of LOT2010 Open estimated 117% of LOT2011* Future estimated 98% of LOT**Assume freeze in appropriations

WHAT YEARS ARE USED TO GET A PAYMENT IN FY ‘11?

Financial Data from FY ’08LEA ADA data from FY ’09LEA Student Counts (survey) from FY ’10Appropriations in FY ‘11

ALL OF THESE DETERMINE THE PAYMENT YOU RECEIVE IN FY ‘11

Conversion to ADA Impact Aid requires students in Average Daily Attendance

(ADA) format, so the student enrollment data on the application has to be converted to ADA

For LEAs in most states an ADA conversion ratio is computed

The ratio formula: previous year’s ADA divided by the previous year’s enrollment on survey date (Table 6, line 2a divided by Table 6, line 1e)

This ADA ratio is then multiplied by the number of enrolled students on the application to determine an ADA

ADA RATIOSome states have a negotiated ratio

• AK .9295• AZ .93751• CO .92965• CT .95729• FL .93• GA .92906• ME .93865• MI .92• MT .94361• NE .93782

• NM .90• OH .92399• OK .94181• SC .94165• SD .94803• UT .9424• WA .937• WI .93301• WV .92366• WY .9312

The higher the ADA Ratio, the more funds you get!!!!!!

• LEAs in states with a negotiated ratio may use the higher of the actual ADA ratio for their district (previous ADA/previous enrollment on survey date)

OR

• The negotiated ratio for their state

ELIGIBILITY

• In order to be eligible for funds, an LEA must have either:400 federal students in ADA; ORFederal ADA of 3% of the total ADA

• BUT……students whose parents are civilians that only work on federal property (Civ Bs) only count if:– there are 1,000 in ADA; OR– they represent 10% of the total ADA

ELIGIBLE EXAMPLEType App # * Ratio = ADAAll Students (Total) 550 .937 515.35

Military On Base 100 .937 93.70Military Off Base 25 .937 23.43Civ Work Only 5 .937 4.69*

Total Federal ADA 117.13More than 3% of the total ADA, LEA is eligible*Civ Work only students are not 10% or 1,000, so they do NOT count

INELIGIBLE EXAMPLEType App # * Ratio = ADA

All Students (Total) 550 .937 515.35

Military On Base 4 .937 3.75

Military Off Base 5 .937 4.69

Civ Work Only 50 .937 46.85*

Total Federal ADA 8.44Less than 3% of total ADA is Fed, LEA is NOT eligible*Civ Work only students are not 10% or 1,000, so they do NOT count

Weighted Federal Student Units• After enrollment data from the application is

converted to ADA, then federal student weights are applied to the ADA

• Since different types of students have a different financial impact on the school, there are several different weights

You get PAID on Weighted Units..NOT on kids!

Weighted Federal Student Units

Type Federal Weight

Indian Lands (Ind A) 1.25

Military live on Fed (Mil A) 1.00

Civ live on Fed, Parent Wk on Fed (Civ A) 1.00

Military live off Fed (Mil B) 0.20

Live in LRH (LRH B) 0.10

Civ only Wk on Fed (Civ B) 0.05

Example for WFSUs

Type # App * ADA Ratio = ADA * WT = WFSU

Ind. Land 10 * .937 = 9.37 * 1.25 = 11.71

Milt A 8 * .937 = 7.50 * 1.00 = 7.50

Milt B 50 * .937 = 46.85 * 0.20 = 9.37

LRH B 50 * .937 = 46.85 * 0.10 = 4.69

Civ B 50 * .937 = 46.85 * 0.05 = 2.34

Total Fed 168 157.42 35.61

LOCAL CONTRIBUTION RATEThe ‘dollar driver’ of the formula for payments is called

the Local Contribution Rate (LCR)The higher the LCR, the more money per WFSU the

district receives. The LCR is based on financial and per pupil expenditure data from 3 years previous.

Since LCRs are based on the cost of education, they generally rise each year as costs increase

LCRs for 2010 (this year) are based on PPEs from 2007There are 3 ‘formula driven’ methodologies to

determine an LCR and an LEA gets to use the highest result from these formulas as its LCR

LCR FORMULAS1. ½ of the National Average per Pupil

Expenditure from 3 years previous; or2. ½ of the respective State Average per Pupil

Expenditure from 3 years previous; or3. The State average % of revenues from Local

Sources multiplied by the State Average per Pupil Expenditure from 3 years previous

Remember..the LEA gets to use the highest result of

these methodologies!

LCR Examples for FY ‘09 National Average PPE in FY ’06 $ 9,246 Missouri Average PPE in FY ’06 $ 8,219 Missouri % Rev. from Local in FY ’06 57.6%

1. ½ National Avg ($ 9,246 * .5) = $ 4,620.00

2. ½ State Avg ($ 8,219 * .5) = $ 4,109.50

3. % Local * State Avg ($ 8,219 * .576) = $ 4,734.14

The FY ’09 LCR for LEAs

in Missouri is at least $ 4,734.14

ANOTHER LCR METHOD

• There is a fourth way to determine an LCR, called a “Comparable” LCR

• It is based on the Local Costs of districts in the state that are “comparable” (similar) to a school district

• If the Comp LCR is higher than the 3 regular formulas, then it is used

MAXIMUM PAYMENT MATHPut it all together

Assume the following for FY 2010:

• The LEA’s application has:10 Indian Lands students; and5 Military off base students; and 100 total students on survey date

• The previous year’s enrollment on survey date was 110, and the ADA for that year was 91.52..NO negotiated Ratio

• The National Average PPE 3 years previous was $ 10,431• The State Average PPE 3 years previous was $ 7,312• The % Local revenues in the state 3 years ago was 33.5%

DO THE MATHADA Ratio is 0.832 (91.52 / 110)Federal ADA is 12.48 ((10+5)* 0.832)Total ADA is 83.20 (100 * 0.832)LEA is eligible, Fed % is 15% (12.48/83.2)WFSU are 10.23 (10 Indian Land * 0.832* 1.25) +

(5 Military Off * 0.832 * 0.2)LCR is $ 5,215.50 (½ Nat Avg is highest of 3 methods)

WFSU * LCR = ’03 MAXIMUM PAYMENT10.23 * $ 5,215.50 = $ 53,355

That’s not so hard.

SO WHY IS IMPACT AID SO COMPLICATED?

There is not enough money appropriated by Congress

Basic Support Appropriations in ‘10 are $1,138,000,000

The sum of all the Maximum Payments for every LEA in the nation is $1,935,267,990

This means we only have enough money to meet 59% of our NEED

$0

$400,000,000

$800,000,000

$1,200,000,000

$1,600,000,000

$2,000,000,000

Appropriation Maximum Payment Need

WHY THE CONFUSION?

• Since we do not have the resources to meet every school district’s need…..

• We have to have a form of PRORATION

THAT IS WHAT BRINGS THE COMPLICATION (and the

political in-fighting)!

PRORATIONLearning Opportunity Threshold

LOT• The law provides for a “NEEDS BASED” Proration• It is called Learning Opportunity Threshold (LOT)• Each LEA has a LOT % (Need Factor) which is its:

percentage of Federal ADA; pluspercentage that the Maximum Payment is of the Total

Current Expenditures from 3 yrs prior

• It is called Learning Opportunity Threshold (LOT)• The LOT Percentage may never be higher than 100%

PRORATION BY LOT

• Each LEA in the nation has its LOT Percentage computed

• The District’s Maximum Payment is then multiplied by its LOT Percentage

• This is called the “LOT Payment”

EXAMPLE OF A LOT PAYMENT

• LEA has a Maximum Payment Calculation of $ 100,000• 25% of the ADA is Federal• The TCE 3 yrs ago was $ 2,000,000• The LOT Percentage is 30%

ADA is 25%

Max. Payment is 5% of TCE ($100,000 / $2,000,000)

The LOT Payment is $ 30,000 ($100,000 * .30) Max Pay * LOT %

LOT PAYMENT MATH Put it all together

• LEA has 100 WFSU, LCR of $6,000..Max Payment is $600,000

• 80% of ADA is Federal; Max Pay is 30% of its TCE

• LOT is 100% (80%+30% but never higher than 100%)

• LOT Payment is $600,000 ( Max * LOT %…..$600,600 * 100%)

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

MAXPayment

LOTPayment

LOT PAYMENT MATH Put it all together

• LEA has 100 WFSU, LCR of $6,000..Max Payment is $600,000

• 50% of ADA is Federal; Max Pay is 10% of its TCE

• LOT is 60% (50%+10%..but never higher than 100%)

• LOT Payment is $360,000 ( Max * LOT %...$600,000 * 60%)

-$50,000

$50,000

$150,000

$250,000

$350,000

$450,000

$550,000

$650,000

MAXPayment

LOTPayment

LOT PAYMENT MATH Put it all together

• LEA has 100 WFSU, LCR of $6,000..Max Payment is $600,000

• 20% of ADA is Federal; Max Pay is 5% of its TCE

• LOT is 25% (20%+5% but never higher than 100%)

• LOT Payment is $150,000 ( Max * LOT %…….$600,000 * 25%)

-$50,000

$50,000

$150,000

$250,000

$350,000

$450,000

$550,000

$650,000

MAXPayment

LOTPayment

LOT PAYMENT MATH Put it all together

• LEA has 100 WFSU, LCR of $6,000..Max Payment is $600,000

• 5% of ADA is Federal; Max Pay is 1% of its TCE

• LOT is 6% (5%+1%..but never higher than 100%)

• LOT Payment is $36,000 (Max * LOT %…….$600,000 * 6%)

-$50,000

$50,000

$150,000

$250,000

$350,000

$450,000

$550,000

$650,000

MAXPayment

LOTPayment

LOT PAYMENT MATH Put it all together

With a Maximum Payment of $600,000…then the LOT Payment is:

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

100% LOT 60% LOT 25% LOT 6% LOT

That’s not toooooo hard

SO WHERE’S THE COMPLICATION?

What if the Appropriations…

Are not high enough to fund LOT?Then everyone gets an equal Percentage of their LOT

that is less than 100%Examples…94% LOT, 75% LOT…whatever the

Appropriation will pay for

Are higher than LOT, but less than Maximum?Then the fun startsAnd it gets a little complicated……

For the last few years we have had less money than is required to fund everyone’s Maximum…

but more than is required to fund everyone’s LOT!

• It cost about $1,064,000,000 to fund everyone’s LOT in FY ‘10

• It cost about $1,35,000,000 to fund everyone’s MAX in FY ’10

• We had $1,138,000,000 for FY ‘10

$500,000,000

$1,000,000,000

$1,500,000,000

$2,000,000,000

LOT Need Maximum PaymentNeed

Appropriation

Percent of LOT Payments or Maximum Payments

• When we have more than needed to fund LOT and we have less than needed to fund Maximum, then…..

• Every LEA’s LOT Payment is multiplied by a percentage over 100%

• But the result is capped at each District’s Maximum Payment

• This means LEAs will receive 1xx% of LOT OR the Maximum…whichever is LESS

Percent of LOT Payments or Maximum Payments

For FY ’10, we estimate that the appropriation is sufficient to eventually fund about…

118%* of LOT or the Maximum (whichever less) for all LEAs in the nation

This means each LEA will eventually get LOT * 118%

UNLESS this is greater than the Maximum

No District can ever get more than the Maximum

Example of Payment over LOT• LEA Max Payment is

$500,000

• 90% of ADA is Federal; Max Pay is 20% of its TCE

• LOT is 100% (90%+20% but never higher than 100%)

• LOT Payment is $500,000 (Max * LOT %..$500,000 * 100%)

• 118% of LOT Payment is $590,000 ( LOT * 118%)

• Payment is $500,000 (since Maximum is less than 118% of LOT)

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

MAXPayment

LOTPayment

118% ofLOT

FinalPayment

Example of Payment over LOT• LEA Max Payment is

$500,000

• 70% of ADA is Federal; Max Pay is 10% of its TCE

• LOT is 80% (70%+10% but never higher than 100%)

• LOT Payment is $400,000 (Max * LOT %..$500,000 * 80%)

• 118% of LOT Payment is $472,000 ( LOT * 118%)

• Payment is $472,000 (since Maximum is less than 118% of LOT)

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

MAXPayment

LOTPayment

118% ofLOT

FinalPayment

Example of Payment over LOT• LEA Max Payment is

$500,000

• 40% of ADA is Federal; Max Pay is 10% of its TCE

• LOT is 50% (40%+10% but never higher than 100%)

• LOT Payment is $250,000 (Max * LOT %..$500,000 * 50%)

• 118% of LOT Payment is $295,000 ( LOT * 118%)

• Payment is $295,000 (receive the smaller of Maximum or 118% of LOT)

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

MAXPayment

LOTPayment

118% ofLOT

FinalPayment

Example of Payment over LOT• LEA Max Payment is

$500,000

• 20% of ADA is Federal; Max Pay is 5% of its TCE

• LOT is 25% (20%+5% but never higher than 100%)

• LOT Payment is $125,000 (Max * LOT %..$500,000 * 25%)

• 128% of LOT Payment is $160,000 ( LOT * 128%)

• Payment is $160,000 (receive the smaller of Maximum or 128% of LOT)

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

MAXPayment

LOTPayment

128% ofLOT

FinalPayment

Example of Payment over LOT• LEA Max Payment is

$500,000

• 5% of ADA is Federal; Max Pay is 1% of its TCE

• LOT is 6% (5%+1% but never higher than 100%)

• LOT Payment is $30,000 (Max * LOT %..$500,000 * 6%)

• 118% of LOT Payment is $35,400 ( LOT * 118%)

• Payment is $35,400 (receive the smaller of Maximum or 118% of LOT)

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

MAXPayment

LOTPayment

118% ofLOT

FinalPayment

Put it all Together……Final Payments at 118% LOT (and 155%)

$0$50,000

$100,000

$150,000

$200,000$250,000

$300,000

$350,000

$400,000$450,000

$500,000

100% LOT 80% LOT 50% LOT 25% LOT

LOT Payment

118% LOT

155% LOTPayment

Small District Adjustment

• Added in the Re-authorization of 2000• Ed Hennessee worked with Forkenbrock to get this

provision in the law• Provided that all LEAs with less than 1,000 students

in ADA and spend less than the state or national average will have a minimum LOT Percentage of 40%

• About 260 LEAs nationwide receive the SDA; but 150 of them are in Oklahoma (58% of all SDA LEAs)

• 62% of all the Oklahoma Impact Aid schools qualify for the SDA

What’s the Importance of the SDA?

School District 1 850 total ADA 40 Indian Lands ADA 5% LOT LCR of $4,898 Spends > national avg. ppe Maximum payment is

$244,900 (40*1.25*$4,898) LOT payment is $12,245

($244,900 * .05) 130% LOT payment is

$15,918.50 ($12,245 * 1.30)

School District 2 850 total ADA 40 Indian Lands ADA 5% LOT LCR of $4,898 Spends < national avg.

ppe, gets SDA!!! Maximum payment is

$244,900 (40*1.25*$4,898) LOT payment is $97,960

($244,900 * .40) 130% LOT payment is

$127,348 ($97,960 * 1.30)

WHAT’S THE DIFFERENCE? HOW IMPORTANT IS THE SDA?

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

District 1 District 2

LOT Payment

130% LOT

150% LOT

SUMMARY OF § 8003 (b)BASIC SUPPORT

MAXIMUM PAYMENT- the ceiling..the most you can get

• Elements: Student Count, ADA ratio, LCR, Weights

LOT PAYMENT- the “Need” Payment..first step of Proration; baseline for further calculations

• Elements: % federal ADA, Total Current Expenditures

No……We’re not done yet.Believe it or not, there’s more in

§8003!

§ 8003 (d)- DISABILITY

This is a payment in addition to Basic Support for certain federal students who are disabled and have IEPs on file as of the survey date

Eligibility for 8003 (d)1. Indian Land students w/ active IEP on file (as of the survey

date)

2. Military students w/ active IEP on file (as of the survey date) Indian Land SPED students and Military SPED students who live

on federal property are reported on Table 1 (NOT on Table 3) Military SPED students who do NOT live on federal property are

reported on Table 2 (NOT on Table 5)

Secure an alpha list of all students with an active IEP on file as of the survey date from Director of Special Education, and

have them sign it. This is your ‘master list’.

Only federal students who are on this list may be put on Table 1 or 2. The list is used as ‘proof’ during an audit.

Formula for § 8003 (d) DISABILITYPayments

• Students on Tables 1 and 2 are multiplied by the ADA ratio

• Each ADA from Table 1 has a Disability Weight of 1.0

• Each ADA from Table 2 has a Disability Weight of 0.5

Formula for § 8003 (d) DISABILITY

Payments• The Disability Weights from all districts

across the nation are summed.

• The appropriation for § 8003 (d) is divided by the nation-wide total of Disability Weights

• This provides a “per Weight” payment

• The “per Weight” payment is multiplied by the Disability Weight for each district and a payment is sent out.

§ 8003(d) DISABILITY Example• LEA has 10 students on Table 1 & 30 students on Table 2• The ADA ratio for the district is .925• The district has 23.13 Disability Weights

(10 * 0.925 * 1.0) + (30 * 0.925 * 0.5)

• Nation-wide there are 46,600 Disability Weights• The appropriation for § 8003(d) is $ 50,000,000• The national payment per Disability Weight is $1 ,073

($ 50,000,000 46,600)

• The LEA’s § 8003(d) payment is $24,818 ($ 1,073 * 23.13)

This payment is IN ADDITION to the money received

for these kids in § 8003(b) BASIC SUPPORT

WE ARE ALMOST DONE!!

Well…not really….

BUT Hang in there!

How do I know I got paid what I was supposed to get paid?

Each Impact Aid payment comes with a voucher.You can actually trace the voucher numbers back

to your application!You can do the math and double-check the DoED

Don’t Forget:

• Have proof (back-up) for everything you put in the application Source Checks, Survey Forms, SPED letter, ADA, Financial Audit,

Enrollment Lists, Board Minutes, etc.

• Keep everything for at least 5 years (3 years after last payment required by regs) or you could have problems in an audit

• Do the E-Application and make sure you submit it on line! Get an e-mail receipt for submission and keep it!

• Check vouchers for accuracy You could find that DoED owes YOU money..or that you will end up

owing them money

Reauthorization• ESEA is reauthorized every 5-8 (or 10) years.

• Main IA concern is how to split the money

• Low LOTs (NCIS) want more– Concern over distribution after initial LOT– Upset over “special fixes” for High LOT LEAs

• NIISA wants to protect the Indian Schools

• Mid LOTs don’t want to lose money and be paid as Low LOTs

• MISA wants to protects its member schools

Reauthorization

What will happen?

Compromise between the FOUR players!DoEDNAFISNCISCongressional “input”

REMEMBER-THIS WAS AN OVERVIEW OF IMPACT AID

AND DID NOT INCLUDE:ADJUSTMENTS TO WEIGHTS, LCRs, AND

LOT PERCENTAGES (in § 8003)Heavy Impact provisions, Large District Adjustment,Application On-Behalf, Administrative Districts

EQUALIZATION (in § 8009)CONSTRUCTION (in § 8007)

Formula driven payments,Competitive Needs Based Grants

CONGRATULATIONSYou now know more about

Impact Aid than:99% of the school finance experts in the nation; and95% of the Congressional staff that deals with it; and 80% of the DoED staff.

YOU ever wanted to know