Appendix C: MOE Waiver Request, Georgia (FY 2023 Elementary and Secondary Education)
Summary
Appendix C: MOE Waiver Request form for Georgia, on which the State requests a waiver of the FY 2023 maintenance of effort requirement for elementary and secondary education under section 2004(a) of the ARP Act. The form's data table lists Georgia's state support for elementary and secondary education as a proportion of overall State spending of 37.16% on average for FYs 2017-2019 and 36.26% for FY 2023, with FY 2023 elementary and secondary support of $11,126,570,218.00 and overall State spending of $30,681,297,595.86. It asks the State to attach a description of its fiscal burdens in responding to the coronavirus and documentation such as revenue data. These are the State's submitted figures.
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Cite this document
“Appendix C: MOE Waiver Request, Georgia (FY 2023 Elementary and Secondary Education).”
Original at www.ed.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/department-of-education-pdf-www-ed-gov-dca7381836/
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Appendix C: MOE Waiver Request
This form must be used for the submission of a request for a waiver of the requirements noted below. For assistance,
please contact your State mailbox, which is [State].oese@ed.gov .
State _Georgia_________________________________
On behalf of my State, I request a waiver of the following State maintenance of effort (MOE) requirements for the
following fiscal years:
Please check all that apply:
FY 2020 MOE requirement for elementary and secondary education under section 18008 of the CARES Act.
FY 2020 MOE requirement for higher education under section 18008 of the CARES Act.
FY 2021 MOE requirement for elementary and secondary education under section 18008 of the CARES Act.
FY 2021 MOE requirement for higher education under section 18008 of the CARES Act.
FY 2022 MOE requirement for elementary and secondary education under section 317(a) of the CRRSA Act and
section 2004(a) of the ARP Act.
FY 2022 MOE requirement for higher education under section 317(a) of the CRRSA Act and section 2004(a) of
the ARP Act.
X FY 2023 MOE requirement for elementary and secondary education under section 2004(a) of the ARP Act.
FY 2023 MOE requirement for higher education under section 2004(a) of the ARP Act.
Data for State support and overall State spending
A State must resubmit the baseline data for FYs 2017, 2018, and 2019 (baseline years) as part of this MOE waiver
request. If these baseline data differ from a State’s previously submitted data, please provide a description of the reason
for the change. Additionally, a State must submit MOE data for the years in which it is requesting this waiver.
State support for State support for Overall State State support for State support for
elementary and higher education spending * elementary and higher education
secondary secondary education as a proportion
education as a proportion of of overall State
overall State spending
spending
FY 2017 $8,738,903,875.00 $2,894,743,605.00 $23,742,275,012.03 36.81% 12.19%
FY 2018 $9,239,215,138.00 $3,108,600,168.00 $24,874,166,284.31 37.14% 12.50%
FY 2019 $9,827,396,095.00 $3,280,011,740 .00 $26,177,641,115.97 37.54% 12.53%
Average 37.16% 12.41%
FYs 2017-2019
FY 2020 $10,461,149,490.00 $3,438,498,521.00 $26,615,638,245.45 Not Required Not Required
FY 2021 $9,949,530,552.00 $3,313,833,534.00 $25,545,819,437.95 Not Required Not Required
FY 2022 $10,879,590,509.00 $3,659,718,365.00 $29,034,304,094.89 37.47% 12.60%
FY 2023 $11,126,570,218.00 $4,162,804,617.00 $30,681,297,595.86 36.26% %13.57%
*For overall State spending, a State may request a waiver based on final allocations or appropriations. For more
information, see FAQ 10.
Additional submission requirements
In an attachment, please provide:
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1. A description of the extent to which the State experienced fiscal burdens in preventing, preparing for, and
responding to the coronavirus and an explanation of how those fiscal burdens affected the State’s ability to
maintain fiscal effort (e.g., the status of and any changes to the State’s rainy day fund, whether the State
experienced a decline in revenues, or an increase in other emergency expenses resulting from the
pandemic, such as expenses related to health care, unemployment insurance, or support for small
businesses); and
2. Documentation and data supporting the description of the State’s fiscal burdens (e.g., revenue data, appropriation
tables, unemployment statistics, etc.) including any State action that impacted State revenue (e.g., tax increases or
decreases).
3. In addition, in its waiver request, a State should submit information on the relevant factors listed below to support
its request. The Secretary may ask States for additional information after States submit the MOE waiver request
form.
In determining whether to grant a State an MOE waiver, the Secretary may consider factors such as:
Has the State increased support for education?
The Department understands that it is possible that a State has maintained or increased overall funding for education and the
proportion of the State budget for education has still declined because of increases in other areas of the budget (e.g., public health). In
these cases, the Secretary may consider:
• Has total State funding for K-12 education and for higher education (calculated separately) increased from the prior fiscal year?
• Has total State funding for K-12 education and for higher education (calculated separately) increased over time (e.g., since
baseline years)?
• Has per-pupil State funding for K-12 education and for higher education (calculated separately) increased from the prior fiscal
year?
• Has per-pupil State funding for K-12 education and for higher education (calculated separately) increased over time (e.g., since
baseline years)?
• Has the State appropriated an increase in State funding for K-12 education and for higher education for future fiscal years?
Are there exceptional circumstances that caused the State to be unable to maintain support for education?
If a State’s support for education declined, the Secretary may consider:
• Are there specific severe effects of the COVID-19 pandemic on the State’s economy that necessitated reductions in support for
elementary and secondary education and for higher education?
• What steps did the State take to avoid and/or minimize such reductions?
• Did the State use Coronavirus State and Local Fiscal Recovery Funds awarded by the U.S. Department of the Treasury under
section 9901 of the ARP Act to support elementary and secondary education and higher education?
• How did reductions in support for elementary and secondary education and for higher education compare to other budget
categories?
• Did the State take steps that reduced or will it take steps to proactively reduce its financial resources in a way that impacted or
will impact its ability to meet MOE requirements (e.g., tax changes (and in what context), additional contributions to rainy day
funds)? If so, what was the impact of the reduction (e.g., to what extent were its resources reduced or will its resources be
reduced)?
Has the State used or will it use ESSER, GEER, or Higher Education Emergency Relief (HEER) funding to replace State
funding for education?
It is important for the Department to understand the State’s use of pandemic-related Federal funds when reviewing a request for a
waiver. The Secretary may therefore consider:
• Will all unallocated ESSER or GEER funds relevant to the waiver be used to provide net new resources to K-12 schools and to
higher education and not be used to replace existing State commitments to K-12 education and to higher education?
• Will all unallocated HEER funds be used to provide net new resources to higher education and not be used to replace existing
State commitments to higher education?
• Has the State previously used any ESSER, GEER, or HEER funds to replace State funding for education?
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To the best of my knowledge and belief, all of the information in this MOE data submission are true and correct and the
failure to submit accurate data may result in liability under the False Claims Act, 31 U.S.C. § 3729 et seq.; OMB
Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) in 2 CFR part 180, as adopted
and amended as regulations of the Department in 2 CFR part 3485; and 18 USC § 1001, as appropriate, and other
enforcement actions.
_State School Superintendent Richard Woods______________________________________________404-657-1175___
Governor or Chief State School Officer or Authorized Representative (Typed or Printed Name) Telephone
_______________
(b) (6) ________________________________________________3/14/2024_
Signature of Governor or Chief State School Officer or Authorized Representative Date
Public Burden Statement
According to the Paperwork Reduction Act of 1995, no persons are required to respond to a collection of information unless such collection displays
a valid OMB control number. The valid OMB control number for this information collection is 1810-0745. Public reporting burden for this
collection of information is estimated to average 2 hours per response, including time for reviewing instructions, searching existing data sources,
gathering and maintaining the data needed, and completing and reviewing the collection of information. The obligation to respond to this collection
is required to obtain or retain benefit under section 18008 of the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act, Division M,
Section 317 of the Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSA) Act, and Section 2004(a) of the American
Rescue Plan Act of 2021 (ARP Act) If you have any comments concerning the accuracy of the time estimate, suggestions for improving this
individual collection, or if you have comments or concerns regarding the status of your individual form, application or survey, please contact Britt
Jung, Office of State and Grantee Relations, Office of Elementary and Secondary Education, U.S. Department of Education, 400 Maryland Avenue,
SW, Washington, DC 20202-6450, email: SGR@ed.gov directly.
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State of Georgia 2023 Section 2004(a) Maintenance of Effort Waiver Request
To: Office of Elementary and Secondary Education, United States Department of Education
From: State of Georgia
Date: 3/14/2024
Re: Waiver Request for 2023 Maintenance of Effort Requirement of Section 2004(a) of the
American Rescue Plan Act of 2021 for Elementary and Secondary Education Spending
I. Impact of COVID-19 Public Health Emergency on Georgia Revenue and Budget
Georgia, like other states over the last four years, has experienced a large degree of fiscal
uncertainty as it has navigated the impact of the pandemic and subsequent economic recovery. The
state had a consistent trendline of revenue growth in the ten-year period emerging from the Great
Recession1. The national public health emergency in the spring of FY 2020 introduced tremendous
uncertainty into the outyear revenue forecast for many states, including Georgia.
In the original FY 2021 budget, Georgia, along with other states, projected substantial revenue
declines due to the pandemic and public health emergency as unemployment soared to near record
levels and certain economic sectors faced business failures as a result of stay-at-home orders.
Federal spending provided support to businesses and households to mitigate layoffs and assist in
economic stimulus as consumers shifted purchases from the service sector to physical goods.
Additionally, Georgia was early to lift shelter in place orders to mitigate economic impact of the
pandemic on businesses and households while maintaining other public health measures to prevent
the spread of COVID-19. As a result, while FY 2020 revenues were below prior year levels, FY
2021 revenues were closer to being “on trend” with the preceding ten-year period.2
However, even with stronger than anticipated revenues in FY 2021, uncertainty in the
longevity of federal economic support coupled with inflationary pressures and federal economic
policy in addressing inflation left tremendous outyear uncertainty in revenue performance, with
increasing numbers of economists in 2022 and into 2023 warning of a looming recession. As a
result, in both FY 2022 and FY 2023, the state maintained conservative revenue estimates in the
original budgets, revising those estimates up to be “on trend” with the preceding decade only when
additional revenue information was available for the current fiscal year for consideration in the
Amended budget.3 Because Amended budget funding is not automatically carried forward into
subsequent fiscal years, the state looked for opportunities to address one-time extraordinary needs
1
See Section II. Data Supporting State Spending During the COVID-19 Public Health Emergency Figure 1, State
General Fund Revenues
2
See Section II. Data Supporting State Spending During the COVID-19 Public Health Emergency Figure 1, State
General Fund Revenues
3
See Section II. Data Supporting State Spending During the COVID-19 Public Health Emergency Figure 1, State
General Fund Revenues
Page 1 of 9
State of Georgia 2023 Section 2004(a) Maintenance of Effort Waiver Request
that would not create outyear financial obligations in the event of a national recessionary economic
climate.
In both the Amended FY 2022 and Amended FY 2023 budgets, the state prioritized
spending stronger than anticipated revenues on K-12 education. In Amended FY 2022, the state
increased its revenue estimate by $2.8 billion from the original estimate based on stronger than
anticipated revenues. Of that, the state invested more than $1.2 billion, or 44 percent, of the
additional funding directly in K-12 education. This included fully funding its Quality Basic
Education (QBE) funding formula, providing $404 million to local education agencies (LEAs) for
a $2,000 salary supplement for certificated employees and support staff, providing $230 million
to the State Health Benefit Fund to address financial needs in the School Fund supporting K-12
LEA staff and teachers due to the pandemic, and making an unprecedented $188 million
investment in school bus replacement and safety upgrades for LEAs.
In the original FY 2023 budget, the state provided more than $453 million to fully fund the
state’s QBE funding formula and $287 million to annualize the $2,000 salary supplement for K-
12 certificated personnel included in the Amended FY 2022 budget. In the Amended FY 2023
budget, again as a result of greater than anticipated revenues through the first half of fiscal year
2023, the state increased the general fund revenue estimate for the Amended budget by $2.0 billion.
More than $756 million of that increase went directly to continue to expand the state’s K-12
education support in the Amended FY 2023 budget. This included $156 million to fully fund the
state’s share of enrollment growth as calculated for the midyear adjustment for QBE formula
growth along with an additional $420 million for the QBE formula to directly support 100 percent
of an employer contribution increase for School Fund of the State Health Benefit Plan. This nearly
half billion-dollar investment in the state’s teacher and school employee health plan addressed
financial needs of the plan post-pandemic and mitigated the need to increase employee
contributions for educators to maintain plan fiscal health. The state also provided $115.7 million
to fund school security grants at an amount of $50,000 per school, $5 million to support
paraprofessionals with bachelor’s degrees seeking teaching certificates, and $2.5 million in
matching funds to support character education programming. In total, the state invested almost
38% of all additional dollars added in the Amended budget in K-12 education.
Throughout the post-pandemic period, despite national economic uncertainty, Georgia has
continually prioritized investing in K-12 education over and above the amounts specified in its
statutory funding formulas.4 The state has substantially increased state support of K-12 education
on both an aggregate nominal and per-pupil basis annually through the post-pandemic period,
4
See Section III. Additional Relevant Information on Georgia’s Educational Funding Formulas for further
explanation on how the state’s Local Education Authority funding formulas are calculated.
Page 2 of 9
State of Georgia 2023 Section 2004(a) Maintenance of Effort Waiver Request
through increased teacher and support staff pay, additional ongoing state support for pupil
transportation, and establishing permanent state funding for school security.5
However, as other states have experienced, local school systems in Georgia saw substantial
disruptions in pupil enrollment across the 2020 and 2021 school years as parents made enrollment
decisions in part based on in-person, hybrid, and virtual school options and their family’s needs.
While overall enrollment began increasing once again after a fall off early in the pandemic,6
enrollment trends were highly variable between school districts. At the same time, Georgia, along
with the rest of the nation, saw an unprecedented rise in home values beginning in summer of
2020, particularly in the metro Atlanta area.7 As a result, Georgia saw significant impacts to both
its QBE funding formula and QBE Equalization formula during this period.
Georgia does not have a poverty weight included as a direct component of its Quality Basic
Education funding formula, but instead addresses system wealth inequities through the Quality
Basic Education Equalization formula established under O.C.G.A. 20-2-165. The Equalization
formula provides additional funding assistance to local school systems that rank below the
statewide average of per pupil tax wealth. Because the formula is based on an individual LEA’s
per pupil tax wealth relative to other school systems, this formula can be variable from year-to-
year. Additionally, Equalization is only calculated in the original budget for the fiscal year and is
not adjusted in the midterm-adjustment like the QBE and Local Five Mill Share calculations.
At the time that the Equalization formula was calculated for the Fiscal Year 2023 budget,
it utilized the full-time equivalent (FTE) pupil counts for Fall 2020, Spring 2021, and Fall 2021 as
those were the most recent available, the three periods experiencing the largest enrollment
disruption as a result of the pandemic. In comparison, the Equalization formula calculation for the
preceding year, FY 2022, would have utilized Fall 2019, Spring 2020, and Fall 2020 FTE counts,
capturing in part pre-pandemic enrollment trends. Furthermore, the subsequent FY 2024
Equalization budget utilized FTE counts for Fall 2021, Spring 2022, and Fall 2022, when many
schools began to see a stronger return of pupil counts following peak pandemic disruptions.
Because of the timing of the FY 2023 Equalization calculation, there was a net loss of 47,709 FTEs
from the preceding FY 2022 Equalization count, an approximate two percent total decline;
however, relative wealth based on tax digest per pupil increased almost nine percent during the
same period. Metropolitan area school systems, particularly in the Atlanta area, were resultantly
hit with simultaneous opposing factor changes in their Equalization formula calculation as their
enrollments dropped while home prices, and thus tax digests, jumped, increasing their relative
wealth to other systems and reducing their overall Equalization earnings.
5
See Section II. Data Supporting State Spending During the COVID-19 Public Health Emergency, Figure 2,
Spending by Policy Area Pre- and Post- Pandemic
6
See Section II. Data Supporting State Spending During the COVID-19 Public Health Emergency Figure 4, K-12
Enrollment Trends Pre- and Post-Pandemic
7
See Section II. Data Supporting State Spending During the COVID-19 Public Health Emergency Figure 5, S&P
CoreLogic Case-Shiller GA Atlanta Home Price Index
Page 3 of 9
State of Georgia 2023 Section 2004(a) Maintenance of Effort Waiver Request
As a result, in the FY 2023 Equalization calculation, the net funding requirement generated
by the formula statewide for systems declined by $164,188,077. 103 out of 180 school systems
had a calculated decline in Equalization earnings for the 2023 fiscal year while an additional 7
were removed from Equalization eligibility altogether under their formula earnings. 8 of the 10
largest formula reductions occurred in large metro Atlanta school systems.8 Only 21 school
systems experienced a relative increase in formula earnings for FY 2023. This was the only year
in which local school systems in the aggregate experienced a decline in formula earnings for
Equalization for the period between FY 2017 through FY 2025. For both FY 2024 and FY 2025,
earnings in turn increased sharply, by $122.3 million and $266.8 million respectively, as students
returned to school systems and housing prices began to stabilize.9
Had school systems not experienced this unprecedented reduction in their Equalization
formula earnings as calculated under O.C.G.A. 20-2-165, the state would have met the Section
317(a) of Division M Maintenance of Effort proportionality requirement within the .5% flexibility
parameter for Fiscal Year 2023. This was a one-time reduction in earnings that was directly
attributable to changes in student enrollment and property tax digest wealth stemming from the
hardest hit years of the pandemic. Despite the one-time reduction in Equalization earnings, overall
per capita student funding and nominal statewide spending on K-12 increased during FY 2023,10
and Equalization earnings bounced back in subsequent years with a “return to normal” on in-
person student instruction and stabilization of home prices, with those earnings fully funded by
the state.
Through the proposed FY 2025 budget, Georgia will have added $3 billion to the budget
for direct K-12 investment since 2021, a nearly 30% increase in four years. Georgia has not used
any other federal support received during this period to supplant state funding for education but
has utilized this support to further supplement state funded investments by addressing learning
loss, providing for afterschool and summer learning support, increasing supports for students with
special needs, addressing teacher classroom material needs, and establishing school-based health
centers. Georgia has been and remains steadfast in its commitment to ensuring local school
systems receive the full financial state support they are entitled to under the law and that funding
continues to increase to meet the needs of both a growing population and growing economy.
8
See Section II. Data Supporting State Spending During the COVID-19 Public Health Emergency, Figure 7 Top 10
Equalization Formula Earnings Reductions by School System
9
See Section II. Data Supporting State Spending During the COVID-19 Public Health Emergency, Figure 6 Quality
Basic Education Formula Earnings
10
See Section II. Data Supporting State Spending During the COVID-19 Public Health Emergency, Figure 8 Per-
Pupil State Funding for K-12 and Higher Education
Page 4 of 9
State of Georgia 2023 Section 2004(a) Maintenance of Effort Waiver Request
II. Data Supporting State Spending During the COVID-19 Public Health Emergency
Figure 1.
State General Fund Revenue*
(in millions)
$33,000
$30,647
$31,000
$28,592 $28,574
$29,000
$28,634
$27,000
$24,846
$25,000 $25,783
$23,000 $24,147
$21,000
$19,000
$17,000
$15,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
*Note: Red dots indicate original state general fund revenue estimate, green dots represent Amended budget general fund
estimate, and blue dots reflect actual year end revenue collections.
Figure 2.
Spending by Policy Area Pre- and Post- Pandemic
(in millions)
$20,000
$18,000
$16,000
$14,000
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$0
FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024
Educated Georgia Healthy Georgia Safe Georgia
Responsible and Efficient Government Growing Georgia Mobile Georgia
Debt Management
Page 5 of 9
State of Georgia 2023 Section 2004(a) Maintenance of Effort Waiver Request
Figure 3.
Final FY 2022 Final FY 2023 Total FY 2023 % of FY 2023
Budget Budget YOY Growth YOY Growth
K-12 Education 10,879,590,509 11,126,570,218 246,979,709 2.27%
Higher Education 3,659,718,365 4,162,804,617 503,086,252 13.75%
Total 14,539,308,874 15,123,674,835 584,365,961 4.02%
Figure 4.
K-12 Enrollment Trends Pre- and Post- Pandemic
1,760,000
1,750,000
1,740,000
1,730,000
1,720,000
1,710,000
1,700,000
FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023
Figure 5.
S&P CoreLogic Case-Shiller GA Atlanta Home Price Index
Page 6 of 9
State of Georgia 2023 Section 2004(a) Maintenance of Effort Waiver Request
Figure 6.
Quality Basic Education Equalization Formula Earnings
(in millions)
1,100
1,000
900
800
700
600
500
400
FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025
(Rec.)
QBE Equalization Formula Earnings by Year
(millions)
FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025
(Rec.)
$498.73 $584.56 $615.32 $693.62 $725.22 $797.97 $633.78 $756.06 $1,022.85
Figure 7.
Top 10 Equalization Formula Earnings Reductions by School System
School FY 2022 FY 2023 FY 2023 FTE Change % Change
System Equalization Equalization Change from Prior from Prior
Year Year
Gwinnett $84,620,080 $34,719,877 ($49,900,203) (2,553) -59.0%
Henry $14,338,960 $3,518,768 ($10,820,192) (1,240) -75.5%
Clayton $65,773,021 $56,260,786 ($9,512,235) (2,035) -14.5%
Douglas $13,388,751 $6,123,079 ($7,265,672) (1,234) -54.3%
Richmond $20,625,865 $14,116,143 ($6,509,722) 299 -31.6%
Rockdale $12,174,722 $6,221,047 ($5,953,675) (1,091) -48.9%
Page 7 of 9
State of Georgia 2023 Section 2004(a) Maintenance of Effort Waiver Request
Hall $5,679,351 - ($5,679,351) (56) -100.0%
Newton $20,350,306 $14,691,661 ($5,658,646) (938) -27.8%
Columbia $14,036,441 $9,352,347 ($4,684,094) (190) -33.4%
Paulding $31,196,325 $27,309,670 ($3,886,654) 137 -12.5%
Figure 8.
Per-Pupil State Funding for K-12 and Higher Education
10,000
8,847
9,000
7,757
8,000 7,205
6,985 6,982
6,723
Per-Pupil State Funds
7,000 6,346
6,000
6,286 6,385
5,000 5,961 5,788
5,605
5,276
5,009
4,000
3,000
2,000
1,000
0
FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023
K-12 Funding Higher Ed Funding
Figure 9.
Appendix B MOE K-12 and Higher Education Spending
(in millions)
FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023
K-12 $8,738.9 $9,239.2 $9,758.4 $10,461.1 $9,949.5 $10,879.6 $10,960.9
Higher Ed $2,894.7 $3,108.6 $3,280.0 $3,438.5 $3,313.8 $3,659.7 $4,162.8
Page 8 of 9
State of Georgia 2023 Section 2004(a) Maintenance of Effort Waiver Request
III. Additional Relevant Information on Georgia’s Educational Funding Formulas
The Quality Basic Education (QBE) funding formula and its associated components, as
outlined in state law, are designed to calculate the state’s cost for elementary and secondary
education. A brief overview is provided below:
QBE Formula Purpose
Quality Basic Education The purpose of this appropriation is to provide formula funds to
(QBE) school systems based on full time equivalent students for the
instruction of students in grades K-12.
QBE Equalization The purpose of this appropriation is to provide additional
financial assistance to local school systems ranking below the
statewide average of per pupil tax wealth.
QBE Local Five Mill The purpose of this program is to recognize the required local
Share portion of the Quality Basic Education program.
QBE is the core formula that funds instructional costs based on weighted student FTE’s. It
is calculated in the original budget based on the current fall and preceding spring and fall
enrollment. The state then also provides midyear adjustments to the QBE formula based on
updated enrollment in the subsequent year; growing districts typically receive additional funds for
new or higher cost FTEs and are held harmless for formula losses. Local Five Mill Share is
designed to calculate the expected local cost for K-12 education based on tax digests. Equalization
is intended to narrow the gap in property tax wealth per pupil across the state. It provides additional
state funds to school districts that are below the statewide average of local funds per pupil at the
statewide average. Equalization funding requirements generally increases year over year, but the
degree to which additional funds are required can vary as it is a formula based on a system’s per
FTE wealth relative to other systems, which can fluctuate based on population and economic
growth of an individual system. The relationship between changes in local property wealth,
changes in the statewide average of local property wealth, and the number of students in those
districts drives the total state cost of equalization. Unlike the Quality Basic Education formula,
Equalization is only calculated in the “base” or original budget and then updated in the subsequent
year’s budget. There is no mid-term adjustment for Equalization.
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