Basic Aid vs. Revenue Limit

If you're at all like me, the first time you heard the terms "Basic Aid" and "Revenue Limit" used in a discussion of our school district's budget, you had no idea what they meant. In somewhat classic bureaucratic style, the terms are not at all intuitive.

Each school district's Revenue Limit ($ per student) is re-calculated each year based on a multi-variable model (variables include school type, enrollment size, historical spending patterns, etc.). Most simply, a Basic Aid district generates an amount of money per student in property taxes (not including school-oriented parcel taxes) that is equal to or greater than its calculated Basic Aid amount, while a Revenue Limit district needs supplemental funding from the state to reach this amount. So, that's still sounds a bit complicated, I think. Thankfully, I came across a wonderful graphic that illustrates the concept in an easily digestible way:

"The Bucket Analogy

If the bucket is completely filled by local property tax revenues, the state has no need to "top off" the bucket. If the bucket overflows with local property taxes, the district gets to keep the overage. Districts whose buckets are filled by local property taxes are called "basic aid" or "excess revenue" districts." (Thank you, Edsource.org)

According to a projection made by the state Department of Education in early August, and statements by school district Business Manager Becky White at the 8/25 Board meeting, we will be a Basic Aid district for FY10-11. Although, according to Becky, her projections of our property tax revenues have us just exceeding the Basic Aid amount (i.e. our little bucket above will contain just a few drops.) Even so, according to data also from EdSource.com, that puts us in the company of only about 60 school districts out of over 1,000 in the state.

Also in the 8/25 meeting, Valerie noted to the Board that our (projected) status as a Basic Aid district for FY101-11 will make us significantly less susceptible to last-minute budget shenanigans by the state, because the state is more likely to withhold/adjust supplemental Revenue Limit funding from schools than it is to attempt to withhold Basic Aid money that originated from local property taxes.

Once again, we can all be thankful for southern Marin's (relatively) stable property values. I hope you all enjoyed a nice holiday weekend!

-Rob

*Correction - This is an updated version of this post. The original said that parcel taxes are included in the Basic Aid calculation. Parcel taxes are in fact not included.