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.
Tennessee
Funding Basics
Formula Type

Tennessee has a primarily resource-based formula. It determines the cost of delivering education in a district based on the cost of the resources, such as staff salaries and course materials, required to do so.  

Low-income students generate supplemental funding in Tennessee. The state does not provide supplemental funding to cover the additional cost of educating other specific categories of students, although specific grade levels, services for students with disabilities, and populations of English language learners and students enrolled in career and technical education programs are considered in the allocation of funding for staff costs.

References:
Tennessee Department of Education. (2016, March). Tennessee Basic Education Program 2.0. Retrieved June 1, 2016.
Base Amount

The state of Tennessee uses a resource-based funding formula and therefore does not use a base per-student amount as the basis for its funding.

Expected Local Share

Tennessee expects school districts to contribute revenue to their public schools. The amount each district is expected to raise is based on a combination of its property values and its residents’ income, with rates set to satisfy a statewide expected local contribution share.

Tennessee’s resource-based formula considers three categories of resources: instructional components, funded 70% by the state; classroom components, funded 75% by the state; and non-classroom components, funded 50% by the state. These contribution levels hold true on average across the state. However, each district is expected to contribute a different amount locally, depending on its ability to pay, as measured equally by two difference indices. The first index considers only the county’s ability to raise education funding through property and sales taxes. The second considers property values, taxable sales, student enrollment, and per capita income.

The combined measure of fiscal capacity is applied at the county level. Therefore, the state and local shares for a county-level school system would be the same as the state and local shares for a city-level school system system within the same county. In FY2016, districts’ measured fiscal capacity ranged from .04% to 14.74%. This figure is multiplied by the district’s resource costs in each category and then by the statewide average local share for that category (such as 70% for classroom components) to determine the dollar amount of the district’s expected local contribution. However, school districts in Tennessee that choose to do so may raise less or more money locally than the expected amount.

References:
Green, H.A., Roehrich-Patrick, L., & Gibson, T. (2005). A Users’ Guide to Fiscal Capacity in the Basic Education Program. Retrieved June 1, 2016.
Tennessee Department of Education. (2016, March). Tennessee Basic Education Program 2.0. Retrieved June 1, 2016.
Tennessee Department of Education (2014, August). Understanding the BEP. Presented at New Directors Workshop. Retrieved June 1, 2016.
Student Characteristics
Grade Level

Tennessee provides different levels of funding for students in different grade levels.  It does so through its resource-based formula by specifying different student-to-teacher ratios for four different grade spans, and providing funding for teacher positions accordingly.

The state assigns a student-to-teacher ratio of 20 to 1 for grades K-3; 25 to 1 for grades 4-6; 30 to 1 for grades 7-9; and 26.5 to 1 for grades 10-12. These ratios determine the number of teaching units to which a district is entitled.

Specialists, principals, assistant principals, and guidance counselors are also assigned to elementary schools in accordance with different student-to-staff ratios than they are to secondary schools.    Once all staff units are calculated for a district, with grade-level variation taken into account, the district receives a flat amount per unit that was $42,065 in FY2016.  These calculations form the basis of districts’ state education funding.

References:
Tennessee Department of Education. (2016, March). Tennessee Basic Education Program 2.0. Retrieved June 1, 2016.
English Language Learner

Tennessee provides increased funding for English language learners (ELLs).  It does so through its resource-based formula by specifying student-to-staff ratios for ELLs and providing funding for staff positions accordingly.

The state assigns a student-to-teacher ratio of 30 to 1 for ELLs. This ratio determines the number of English Language Learner teacher units to which a district is entitled.  The state also allocates funds for ELL translator units based on a student-to-translator ratio of 300 to 1.

Once all staff units are calculated for a district, the district receives a flat amount per unit that was $42,065 in FY2016.  These calculations form the basis of districts’ state education funding.

References:
Tennessee Department of Education. (2016, March). Tennessee Basic Education Program 2.0. Retrieved June 1, 2016.
Student Poverty

Tennessee provides increased funding for students from low-income households. It does so in the form of a flat allocation for each low-income student, which was $542.27 in FY2016. This figure is adjusted for inflation annually.

Students are eligible for this supplemental funding if they qualify for free or reduced-price lunch (FRL) under the National School Lunch Program. This funding is intended to allow for reduced class sizes.

References:
Tenn. Code Ann. § 49-3-307
Tennessee Department of Education. (2016, March). Tennessee Basic Education Program 2.0. Retrieved June 1, 2016.
Special Education

Tennessee funds special education using a resource-based system, determining the cost of delivering special education services in a district based on the cost of the resources, such as staff salaries and course materials, required to do so.

For staff costs, there are student-to-teacher ratios defined for various levels of special education service provision. The number of students receiving services at each level is converted into into teacher units, which are each funded at a standard level. There are also student-to-staff ratios specified for special education assistants. For classroom costs, the state provides funding for special education materials and supplies ($36.50 per special education student in FY2014), instructional equipment ($13.25 per special education student), and travel ($17.25 per special education student) based on average costs from the three most recent years.

References:
Tennessee Department of Education. (2016, July). Tennessee Basic Education Program. Retrieved June 1, 2016.
Gifted

Tennessee provides additional funding for gifted and talented students. It does so as part of districts’ special education funding; Tennessee includes gifted and talented students in the count of special-needs students for funding purposes.

Tennessee includes gifted and talented students in the count of special-needs students for funding purposes. This means that gifted students are counted along with disabled students for the purposes of allocating funds for special education teachers, assistants, materials and supplies, instructional equipment, and travel. (See “Special Education” for a description of this allocation.)

References:
Durski, Maryanne. Executive Director. Office of Local Finance. Tennessee Department of Education. Email message to EdBuild. April 12, 2016.
Career and Technical Education

Tennessee provides specific funding for career and technical education (CTE) programs.  It does so through its resource-based formula by specifying student-to-staff ratios for CTE programs and providing funding for staff positions accordingly.

The state assigns a ratio of 20 full-time-equivalent students for each teacher for CTE programs. This ratio determines the number of CTE teacher units to which a district is entitled.  The state also allocates funds for Vocational Education Supervisor units based on a student-to-supervisor ratio of 1000 to 1.

Once all staff units are calculated for a district, the district receives a flat amount per unit that was $42,065 in FY2016.  These calculations form the basis of districts’ state education funding.

References:
Tennessee Department of Education. (2016, March). Tennessee Basic Education Program 2.0. Retrieved June 1, 2016.
Community Characteristics
District Poverty

Tennessee does not provide increased funding based on the concentration of students from low-income households in a particular district.

Sparsity and/or Small Size

Tennessee does not provide increased funding for sparse districts or small schools.