Funded: State Policy Analysis

A Detailed Look at Each State's Funding Policies

Below, see summaries of the state’s education funding policy in each issue area. Click the Expand icon next to any summary to see more detail, if available, about that state’s policy regarding that issue area. Click the Citation icon
next to any summary to see the sources of the information regarding that issue area.
Arkansas
Funding Basics
Formula Type

Arkansas has a primarily student-based funding formula. It assigns a cost to the education of a student with no special needs or services, called a base amount. It then accounts for the additional cost of educating specific categories of students both by adding supplemental dollar amounts to the base amount for each student in those categories and through program-specific allocations.

The categories of students generating supplemental funding in Arkansas are low-income students, English language learners, students enrolled in career and technical education programs, and students enrolled in alternative learning environments. Services for students identified as gifted, students in sparsely populated districts, and highly disabled students are funded through program-specific allocations.

References:
Arkansas Code Ann. §6-20-2303
Arkansas Code Ann. §6-20-2305
Arkansas Department of Education. Division of Fiscal and Administrative Services. Arkansas School Finance Manual, 2015-2016. Little Rock, AR: Arkansas Department of Education, 2015.
Arkansas Department of Education. Division of Fiscal and Administrative Services. Final State Aid Notice
2015-16. Little Rock, AR: Arkansas Department of Education Division of Fiscal and Administrative Services, August 2016.
Rogers, Greg. Assistant Commissioner for Fiscal and Administrative Services. Arkansas Department of Education. Email message to EdBuild. November 6, 2015.
Base Amount

Arkansas has a fixed base funding amount per student. For FY2016, the per-student base amount was $6,584.

This means that an average student with no special needs or disadvantages would be funded at that level.

References:
Arkansas Department of Education. Division of Fiscal and Administrative Services. Arkansas School Finance Manual, 2015-2016. Little Rock, AR: Arkansas Department of Education, 2015.
Expected Local Share

Arkansas expects localities to contribute revenue to the funding of public schools. The amount each locality is expected to raise for its education costs is based primarily on its property values: each one is expected to contribute $25.00 for every thousand dollars of assessed local property wealth for the purpose of funding its school district, along with revenue from a variety of smaller funds.

Once the state calculates the total amount of funding necessary to educate students within a district, it estimates the value of 98% of the expected local contribution, subtracts that amount, and provides the difference in the form of state education aid. However, school districts in Arkansas that choose to do so may impose taxes that raise more, though not less, money locally than the expected amount.

If a district’s net revenues are less than the estimated value of 98% of the expected local contribution due to nonpayment or under-collection, the state will provide the district with the difference between the last calendar year's net revenues as reported to the state treasurer and 98% of the amount that should have been generated by the expected tax rate of $25.00 per thousand dollars of assessed property wealth. Further, if a district's net revenues exceed the entire amount of funds calculated by the state through the funding formula to be necessary to educate its students, that district receives no state funds.

References:
Ark. Code Ann. § 26-80-101
Ark. Code Ann. § 6-20-2305
Hollowell, Cindy. Coordinator, Division of Fiscal and Administrative Services. Arkansas Department of Education. Personal Communication with EdBuild. June 1, 2016.
Student Characteristics
Grade Level

Arkansas does not differentiate funding based on students’ grade levels. However, while funding is not actually apportioned to districts according to the cost of resources, assumptions about student-to-teacher ratios, salary costs, and other resource costs are the foundation for the base per-student amount, which is set annually.  This includes assumptions about the student-to-teacher ratio in classrooms at different grade levels and about the proportion of students expected to be in each grade level.

For the purposes of setting its base per-student funding amount, Arkansas assumes that 8% of students will be in kindergarten, 23% of students will be in grades 1 to 3, and 69% of students will be in grades 4-12.  It sets the expected student-to-teacher ratios at 20 to 1 in kindergarten, 23 to 1 in grades 1-3, and 25 to 1 in grades 4-12.  

References:
Arkansas Department of Education. Division of Fiscal and Administrative Services. Arkansas School Finance Manual, 2015-2016. Little Rock, AR: Arkansas Department of Education, 2015.
English Language Learner

Arkansas provides increased funding for English language learners. It does so in the form of a flat allocation for each English language learner. This allocation equalled $324 in FY2016.

Students are identified as English language learners based on their performance on a state-approved English proficiency assessment.

References:
Arkansas Department of Education. Division of Fiscal and Administrative Services. Final State Aid Notice 2015-16. Little Rock, AR: Arkansas Department of Education, August 2016.
Student Poverty

Arkansas does not provide a standard, higher level of funding for individual students from low-income households. However, increased funding is provided on a sliding scale based on the concentration of low-income students in the district.  See “District Poverty” for a description of this allocation.

Special Education

Arkansas does not provide funding for special education in most cases, and state funds are set aside only for extremely high-cost or atypical special-needs students.

Special education personnel needs are included in the set of cost assumptions that are factored in when setting the regular, per-student base amount (districts are expected to require 2.9 special education teachers for every 500 students), and funding is not separated out for special education except in extreme cases. The state reimburses districts for the costs associated with students in approved residential facilities within their borders, and also provides reimbursement when the costs of educating a particular student with disabilities are equal to or greater than $15,000. The state also provides some funding for extended-school-year services for special education students.

References:
Arkansas Department of Education. Division of Fiscal and Administrative Services. Arkansas School Finance Manual, 2015-2016. Little Rock, AR: Arkansas Department of Education, 2015.
Arkansas Department of Education. Special Education and Related Services. 19.00 Extended School Year.
Little Rock, AR: Arkansas Department of Education, July 2008.
Gifted

Arkansas provides additional resources for gifted and talented students. It does so in the form of a grant.

The state budget sets aside money to support gifted and talented students throughout the state. The state uses this money to provide grants to school districts with outstanding gifted and talented programs. Some of the money is also used to fund a summer program for gifted and talented youth. In FY2016, approximately $1.3 million was appropriated for these purposes.

References:
Arkansas Governor's School. "Overview." Hendrix College.
Rogers, Greg. Assistant Commissioner for Fiscal and Administrative Services. Arkansas Department of Education. Email message to EdBuild. November 6, 2015.
Career and Technical Education

Arkansas provides specific funding for career and technical education programs. It does so through a flat allocation for each student enrolled in these programs.

In FY2016, the state provided $3250 for every student enrolled in a secondary vocational area center.

References:
Arkansas Code § 6-20-2305
Community Characteristics
District Poverty

Arkansas provides increased funding to districts based on the concentrations of students from low- income households that they serve. It does so by providing an amount for every student eligible for free or reduced-price lunch (FRL) under the National School Lunch Program, with the precise award based on the concentration of such students in the district . Per-student awards ranged from $522 to $1,562 per student in FY2016.

For FY2016, eligible students in school districts whose populations were less than 70% FRL-eligible were funded at $522 apiece; eligible students in school districts whose populations were between 70% and 90% FRL-eligible were funded at $1,042 apiece; and eligible students in school districts whose populations are at least 90% eligible are funded at $1,562 apiece.

FRL eligibility information is based on student counts from the previous school year. School districts moving from one funding level to another are transitioned to the new level over a three-year period. The state also provides a small amount of additional funding for districts experiencing at least 1% year-on-year growth in their FRL-eligible population.

References:
AK Gen. Ass. HB 1663 § Act 1248. Reg. Sess. 2015 (2015)
Arkansas Department of Education. Division of Fiscal and Administrative Services. Arkansas School Finance Manual, 2015-2016. Little Rock, AR: Arkansas Department of Education, 2015.
Arkansas Department of Education. Rules Governing the Distribution of Student Special Needs Funding
and the Determination of Allowable Expenditures of Those Funds. Little Rock, AR: Arkansas Department of Education, May 2016.
Sparsity and/or Small Size

Arkansas provides increased funding for school districts with one or more isolated school areas. It does so in three ways: by applying a multiplier to the base per-pupil for students in these districts that varies depending on the characteristics of the district; by providing a per-pupil amount for each student in these districts; and by dividing certain transportation funding among these districts.

The multipliers applied to the base per-pupil amount for this purpose range from 1.05 for small school districts that are not classified as isolated to 1.2 for the most sparsely populated isolated school areas within a school district. Per-pupil amounts for students in isolated districts are specified in statute for each district and ranged from $1 to $2,219 per pupil in FY2016. Any transportation funding remaining from the state appropriation after other transportation costs are covered is divided evenly among school districts that receive certain categories of isolated funding.

Arkansas defines an "isolated school district" as one that meets any four of the following five criteria: (1) There is a distance of twelve miles or more by hard-surfaced highway from the high school of the district to the nearest adjacent high school in an adjoining district; (2) The density ratio of transported students is less than three students per square mile of area; (3) The total area of the district is ninety-five square miles or greater; (4) Less than fifty percent of bus route miles is on hard-surfaced roads; and (5) there are geographic barriers such as lakes, rivers, and mountain ranges that would impede travel to schools that otherwise would be appropriate for consolidation, cooperative programs, and shared services.

References:
Arkansas Department of Education. Division of Fiscal and Administrative Services. Arkansas School Finance Manual, 2015-2016. Little Rock, AR: Arkansas Department of Education, 2015.