Learn – How Schools Are Funded

The Quickest Way to Describe How Schools Get Money to Spend

[The long version is here.]

fiscal year runs from October 1 to September 30 of the following year, e.g., FY04 ran from October 1, 2003, to September 30, 2004.

Schools get money from federal, state, and local sources.

Federal money is tied to special populations of children: typically children with special needs and children in poverty. The feds support the Child Nutrition Program (CNP) as well.

State money is based (mostly) on how many students are enrolled in the school based on the enrollment from the year before. The state uses the Foundation Program to distribute monies to school districts throughout the state.

Here’s a good look at how the ALSDE allocates money through the Foundation Program.

The state gives the district money for other things, too. Click this link to look at reports of what the ALSDE allocated through the Foundation Program for FY13 and will allocate for FY14.

The state pays teachers’ salaries based on the state-approved salary schedule. Here’s a look at the FY13 state-approved salary schedule. Teachers did get a 2% raise, but I haven’t found the FY14 state-approved salary schedule yet.  Hoover City Schools pays teachers higher than the state-approved schedule. Here’s Hoover’s FY13 salary schedule.

How does Hoover pay the difference? With local money, the third source of money for a school district.

Hoover’s local money comes from city property taxes, a Shelby County sales tax, and a county property tax. The City Council appropriates $2 million a year to the school system. (You can see the amounts for yourself in the “Actual” financial reports below. Look under “Local Revenue” on the reports.

The local money is where all the fun, fluffy, and extra stuff gets funded. This includes those amounts over and above the minimum state-approved salary schedule per teacher, PLUS the salaries for teachers that are hired over and above what the state funds. Hoover consistently has a large number of “locally-funded teacher units”.

To recap, districts have three sources of income: federal, state, and local. Local money is the only money that a school board has complete discretion over how to spend. Local money is used to fund the “extras”. Federal and state money should be viewed as a minimum bar for spending.