FY 2016 Appropriation

The Charter School Local Replacement Funding program was established to provide revenue to charter schools to assist in capital facility needs. Unlike school districts, charter schools do not have bonding authority or the ability to tax their patrons to cover facility costs. The Legislature created a statutory formula that provides an equalized per pupil state appropriation to each charter school to replace some of the locally generated property tax revenue charter schools cannot access. The current formula dates to legislation passed during the 2008 General Session.

Formula -- Senate Bill 2 (2008 General Session) establishes a "District Average Per Pupil Revenue" rate. This rate is based on the total revenues generated by property taxes in the school districts divided by the total ADM of the school district (including district students attending a charter school). Property taxes included in the formula are the Voted Local Levy, Board Local Levy, (excluding revenues expended for recreational facilities, playgrounds, pupil transportation, and the K-3 Reading Improvement Program), and the Capital Local Levy. The bill originally included state funds supporting the Voted, Board, and Capital Outlay Guarantee programs. These revenue sources were excluded from the fund formula by an amendment made in the House during debate.

The Average Per Pupil Revenue rate for each school district ranges across the state. The formula provides state funding to replace local district revenues for Debt Service. The state is required to provide the state-average per student Debt Service Revenues for each student enrolled in a charter school.

Statute requires school districts to contribute 25 percent of their "District Average Per Pupil Revenue" to support the Charter School Local Replacement. School districts do not directly transfer funding to the charter schools. The USOE deducts from the school district's Minimum School Program allocation funds equal to 25 percent of the "District Average Per Pupil Revenue" for each district-student enrolled in a charter school.

Statute establishes a minimum threshold of $1,427 per charter school student. If the formula produces less than this amount, the state will provide an additional supplement to bring the total to $1,427/student.

Funding History

Funding Issues

Enrollment Growth

Total enrollment in the public education system is projected to increase by 7,951 students in FY 2016, with a total enrollment of 630,104. Additional students in the system increases the cost to certain programs as designated by statute or legislative precedent. Adjustments are made in the following programs based on consensus enrollment and WPU estimates: Basic School Program: $24,284,600 Funds an additional 8,380 WPUs in FY 2016. Related to Basic School Program: $10,698,800 Provides a 1.3% increase to the following programs: Pupil Transportation, Enhancement for At-Risk Students, Youth-in-Custody, Adult Education, Enhancement for Accelerated Students, and Concurrent Enrollment. Provides an increase of $4,459,600 to the Local Replacement and $83,200 to the Administrative Cost programs for charter schools. Finally, increases th eamount for the Educator Salary Adjustment by $3,429,500 to account for additional teachers hired by LEAs in fall 2014. Voted & Board Local Levy: $23,023,600 Adjusts funding levels to provide the state guarante rate for all qualifying WPUs. Increases the state guarantee rate as provided in statute from $27.92 per WPU to $30.11 per WPU. The total local property tax revenue contribution to the cost of the Basic School Program is expected to increase by $8,462,600 in FY 2016. This amount works as an off-set to the total increased cost of the Basic School Program above.
Appropriation Overview

During the 2015 General Session, the Legislature appropriated for Fiscal Year 2016, $99,946,200 from all sources for Charter School Local Replacement. This is a 1.7 percent increase from Fiscal Year 2015 revised estimated amounts from all sources. The total includes $99,946,200 from the General/Education Funds, an increase of 1.7 percent from revised Fiscal Year 2015 estimates.

Appropriation Adjustments

In addition to statewide compensation and internal service fund cost increases, the following appropriation adjustments were made during the 2015 General Session:

DescriptionOngoingOne-Time Charter School Finance Amendments ($2,800,000)$0
OngoingOne-TimeFinancing Source
($2,800,000)$0Education Fund
Enactment of this legislation likely will not materially impact state revenue. Enactment of this bill may reduce the state cost for the Charter School Local Replacement Program by $2.8 million ongoing from the Education Fund. The collective contribution of local school districts to the cost of the program may increase from approximately $14.9 million to $17.7 million in FY 2016.
Enrollment Growth$4,459,600$0
OngoingOne-TimeFinancing Source
$4,459,600$0Education Fund
Total enrollment in the public education system is projected to increase by 7,951 students in FY 2016, with a total enrollment of 630,104. Additional students in the system increases the cost to certain programs as designated by statute or legislative precedent. Adjustments are made in the following programs based on consensus enrollment and WPU estimates: Basic School Program: $24,284,600 Funds an additional 8,380 WPUs in FY 2016. Related to Basic School Program: $10,698,800 Provides a 1.3% increase to the following programs: Pupil Transportation, Enhancement for At-Risk Students, Youth-in-Custody, Adult Education, Enhancement for Accelerated Students, and Concurrent Enrollment. Provides an increase of $4,459,600 to the Local Replacement and $83,200 to the Administrative Cost programs for charter schools. Finally, increases th eamount for the Educator Salary Adjustment by $3,429,500 to account for additional teachers hired by LEAs in fall 2014. Voted & Board Local Levy: $23,023,600 Adjusts funding levels to provide the state guarante rate for all qualifying WPUs. Increases the state guarantee rate as provided in statute from $27.92 per WPU to $30.11 per WPU. The total local property tax revenue contribution to the cost of the Basic School Program is expected to increase by $8,462,600 in FY 2016. This amount works as an off-set to the total increased cost of the Basic School Program above.
MSP Balances Transferred to the Education Fund$0 ($7,990,000)
OngoingOne-TimeFinancing Source
$0 ($7,990,000)Transfers
No Description
MSP Nonlapsing - Estimated Available Balance$0$7,990,000
OngoingOne-TimeFinancing Source
$0$11,952,400Beginning Nonlapsing
$0 ($3,962,400)Closing Nonlapsing
No Description
Statute

The following statutes govern charter schools and the Local Replacement Funding Program. Statutes pertaining to the regulation of charter schools may be found in UCA 53A-1a-501 through UCA 53A-1a-515. Some highlighted statutes are provided below.

  • UCA 53A-1a-502.5 -- provides authority to the State Charter School Board to authorize new charter schools.
  • UCA 53A-1a-503 -- establishes the purpose of charter schools through identifying seven statutory principles.
  • UCA 53A-1a-503.5 - clarifies the status of charter schools within the public education system.
  • UCA 53A-1a-513 -- details general funding provisions for charter schools including the Local Replacement Formula Program, distribution of other Minimum School Program funds, and WPU weighting mechanism used to distribute funds to charter schools based on the grade-levels taught in the school. Statute also excludes charter schools from receiving allocations for pupil transportation.

Administrative Rule R277-470, passed by the State Board of Education, provides for administrative procedures, governance of funds, and the calculation of state funding for charter schools.

Intent Language

HB0002: Item 2

The Legislature intends that the State Board of Education review the Pupil Transportation Allocation Formula and recommend ways to improve the formula to increase efficiency, simplify allocation methodology to school districts, and provide incentives for alternative transportation methods. The Legislature further intends that the State Board of Education report its recommendations to the Education Interim Committee and the Public Education Appropriations Subcommittee by October 31, 2015.

HB0002: Item 2

The Legislature intends that the State Board of Education and State Board of Regents provide joint recommendations on how to ensure that each concurrent enrollment course is taught by a qualified instructor, that credits earned by students count towards major and minor degree requirements at state colleges and universities, and that students are advised on the transferability of credits to private and out of state institutions. The Legislature also intends that these recommendations be reported to the Education Interim Committee and the Public Education Appropriations Committee by October 31, 2015.

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COBI contains unaudited data as presented to the Legislature by state agencies at the time of publication. For audited financial data see the State of Utah's Comprehensive Annual Financial Reports.