SUMMARY OF CHANGES TO THE BEP
Change 1: Change the way we measure a county's ability to contribute toward the cost of education (Fiscal Capacity)
Currently
- Determined by a complex statistical regression equation that attempts to
calculate a county's revenues that can be raised and applied to education
- No longer provides the best representation of local capacity to raise revenue
for schools
- Has begun to produce questionable results on how education dollars are
allocated
Proposed change
- Move to a simpler method that is based on measuring two factors - property
and sales tax
- These two factors represent more than 90% of the amount of local revenue
available for education
Change 2: Eliminate the CDF
Currently
- The "Cost Differential Factor" is a mechanism that inflates salary dollars for certain systems
- CDF attempts to calculate wage competitiveness in a local work force
- Calculation is based on an analysis of 90+ industry subgroupings
- Purpose is to evaluate the wage levels in other industries that could compete with teacher salaries in a county; has moved away from original intent
- Only 17 systems benefit from the CDF currently
Proposed change
- CDF is eliminated
- Redirect funds that have gone into the CDF to funding cost of increasing state share of teacher salaries
- Increasing state share of teacher salaries to 75% from 65%
Change 3: Increase state's share of instructional funding to 75%
Currently
- State currently provides 65% of the funds needed to pay teachers in Tennessee. The remaining 35% is provided by local governments
- Funding for teacher salaries represents the largest share of all BEP dollars
Proposed change
- Adjust formula to place a greater portion of the responsibility for funding teacher salaries on the state
- State will assume a greater share of funding for salaries - increasing from 65/35 state-local share to 75/25
- "Maintenance of Effort" statute still applies: local systems must maintain current level of funding
Change 4: Increase unit cost for teacher pay
Currently
- Current unit cost figure for teacher salaries is not yet reflective of "real world cost"
- Increases financial burden on local governments to fund teacher salaries for positions outside the BEP
- Allows for greater disparity in teacher pay among school systems
Proposed change
- Move the unit cost for teacher pay toward a higher target that more accurately reflects "real world cost"
- Teacher pay is reviewed annually, just as other education costs, i.e.textbooks
- Migrate unit cost from approximately 36,700 to a target of $40,000
