BEP 101: A look at Tenn. education funding through eyes of Sullivan school system

So the devil, as the old saying goes, is in the details.

During a presentation at the Sullivan County Board of Education retreat Tuesday at the Ron Ramsey Agricultural Center, the school system’s business manager, Ingrid Deloach, gave the school board a look at the Basic Education Program, which Tennessee uses to fund more than 141 public school systems.

Here are some highlights of Deloach’s presentation and comments on it:

— Sullivan County’s total BEP funding was about $66.7 million, with $39.255 million of that coming from the state and $27.921 million coming from local funds.


— “It (BEP) is not meant to fund the entire education system,” Deloach said.

Basically, no pun intended, the Basic Education Program funds the basics. It assumes, for funding purposes, that all students in a county, including any city systems, are housed in one building and have all teachers available to serve all students, making pupil-teacher ratios efficient. What’s more, the BEP has never been funded fully by the state.

And in real life, even the poorest of districts have more schools and teachers than BEP supports. Pupil-teacher ratio requirements force systems to hire an extra teacher if students in a particular grade at a particular school surpass the maximum allowed. Other mandates involve multiple grade levels and what type and grade level of classes are involved.

Also, BEP funds one nurse per 3,000 enrollment, or a minimum of one per system, and one special education assistant per 60 students.

— When the governor proposes a percentage raise for teachers, the BEP funds only the basic level of teachers as if the local system had only one school. In addition, it funds less based on a county’s ability to raise funds, something calculated by the Tennessee Advisory Commission on Intergovernmental Relations (TACIR). This is done countywide for all school systems in each county and takes into account, among other things, the salaries and pay of private sector jobs and the ability to raise money through local taxes.

For instance, Deloach said that Sullivan County had to spend about $700,000 to grant the raises in the 2017-18 budget but received only $100,000 from the state to do so. The rest came from local funds. A rule of thumb is that the county school system gets about 25 percent of the money needed for a percentage raise funded by the state. For payroll of teachers, she said the state funds 64.06 percent of $28,390,537, which is $19,187,958.

— Another reason the full amount was not received is that state funding is based only on the state salary scale, not the county salary scale that still takes into account education levels and experience more so than the state.

A second reason the county system has budget angst is that it lost the “stability” provision funding that helps soften the blow of losing student enrollment from year to year. For 2016-17, Deloach said, that meant the difference between $800,000 in stability funding versus the actual $400,00 in minimum funding the county received instead.

— A third reason the county system lost money was cost differential factor funding (CDF). Deloach said all systems ultimately will lose that funding.

— BEP funding is split into four areas: instructional (teachers) salaries, instructional benefits, classroom and non-classroom. It also is split among all public school systems in a county — in Sullivan’s case among the county, Kingsport, Bristol, Tenn., and, to a far lesser extent, Johnson City.

BEP funding is based on average daily membership (ADM) in the second, third, sixth and seventh reporting periods. That is enrollment rather than attendance. Director of Schools Evelyn Rafalowski said the state recently changed the funding policy that penalized school districts for seniors who graduated in December rather than May, giving them credit for those students during the second semester. Average daily attendance (ADA) is the basis for splitting county revenue among the county and city systems, Deloach said.

For some teachers, board member Mark Ireson said, their raise this year will be more than offset by increased health insurance costs that will kick in Jan. 1. Some literally will take home less money after the higher amounts are deducted for their health coverage, while others may choose less expensive plans but face higher copayments and deductibles. Ireson is the school board’s representative for collaborative conferencing with the Professional Educators of Sullivan County and Sullivan County Education Association.

Finally, the state funds only one superintendent or director per county. For Sullivan and its cities, that means the amount is split among the four school systems in proportion to enrollment. Further, the amount is nowhere near the actual pay levels of any of the school system heads because of the ability-to-pay calculation, which Ireson said seems unfair to the county.

“They’re (cities) choosing to do it (providing public education). We have to do it,” Ireson said, referring to state law requiring counties but allowing cities to provide public K-12 education. 

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