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2020 Op. Tenn. Att'y Gen. 1 (2020)

handle is hein.sag/sagtn0181 and id is 1 raw text is: STATE OF TENNESSEE OFFICE OF THE ATTORNEY GENERAL January 10, 2020 Opinion No. 20-01 Approval Needed to Change Data Sources in TACIR Fiscal-Capacity Model for BEP Funding Formula Ouestion Whose approval is required for changing the data sources in the Tennessee Advisory Commission on Intergovernmental Relations fiscal-capacity model used to equalize funding through the Basic Education Program funding formula? Opinion Changes to the data sources in the Tennessee Advisory Commission on Intergovernmental Relations fiscal-capacity model must be adopted by the State Board of Education and approved by the Commissioners of Education and Finance and Administration. Legislative approval is not required for such changes, nor is approval of the BEP Review Committee. ANALYSIS The Basic Education Program (BEP) is the funding formula through which state education dollars for the K-12 public school system are generated and distributed to Tennessee schools. The BEP formula has 45 separate components related to the basic needs of students, teachers, and administrators within a school system and reflective of the various costs of providing a basic education. The formula generates funding through these components. The funds generated under the BEP formula are distributed to the local school districts that operate Tennessee's public schools. A portion of these funds is provided by the State at the percentages set in Tenn. Code Ann. § 49-3-307(a)(2)(B).1 The remaining funds are provided by local governments. Id. The percentages in Tenn. Code Ann. § 49-3-307(a)(2)(B) represent the average percentages of state funding across all Tennessee's districts. But under the formula, districts do not all receive the same percentage of state funding. That is because the BEP formula takes into consideration the fiscal capacity of the various local governments, see Tenn. Code Ann. § 49-3- 307(a)(10), and allocates to each district a different percentage of state funding based on the unique fiscal capacity of its local government. If a local government cannot generate significant tax revenue, the State pays a greater percentage of that district's BEP funds as compared to the state ' The formula components are divided into four major categories: benefits, instructional, classroom, and non- classroom. The State provides 70% of funding for instructional salaries and benefits, 75% of funding for classroom components, and 50% of funding for non-classroom components. Tenn. Code Ann. § 49-3-307(a)(2)(B).