11/13/1996 BOARD OF SELECTMEN Executive Session (4)

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SANDWICH SCHOOL FINANCE A Report for the Sandwich Public Schools and those required to achieve foundation budgets is l.-nown as the standard of effort gap. Under certain circumstances, towns needing to Fill such a gap receive state help in the form of overburden aid. If tares at this standard are insufficient to bring budgets to foun- dation levels, the state males up the difference. This shortfall is known as the foundation gap; state aid provided for this purpose is foundation aid. Proposition..'? 1/2, Stability of Funding, and Inflation Because it provides substantial new funding For education (over$200 million in Fiscal Year 1995), the reform law also spells out local maintenance of effort requirements. In general, the rule is quite simple: each community must increase its local property tar support for the schools in proportion to the overall increase in available local funds. If a community's total funds increase by 3%, it is expected to increase its local support of the schools by 3%. Notice that this does notmean that schools receive the entire increase in local funds each year. In this simple example, there will also be 3% more for police, fire, pads, roads, and other local purposes. The required increase in each town's local contribution is Down as the municipal revenue growth factor. It is calculated from the allowable increase in property tar levies under Proposition 2 1/2 (not counting over-rides), the increase (if any) in general purpose state aid, and the increase in other general purpose local revenues (such as the auto excise). There are exceptions to the simple general rule. Low-tax towns which have not supported their schools at foundation levels may be required to increase local support for schools by more than the growth Factor; high-tax towns are allowed to do less. Tax Fairness and Equity Aid Towns taring themselves above the standard of effort are exempt from the provision that they increase their local support of the schools—at least until such time as a rising standard of effort(it is adjusted to reflect increases in local revenue capacity) catches up with a level funded local school contribution. In addition, such towns will receive equity aid,which can be used to reduce local tar rates. SANDWICH'S FO UNDA TION B UDGET Sandwich's foundation budget for the current school year(1994-1995) is shown in the ta- ble on the following page. s Page 3