Toolkit · Education

The Funding Formula Model, Adequacy Evidence, and Bond and Levy Toolkit

20 U.S.C. § 6311

Type
Toolkit
Jurisdiction
National
Date
2024-08-21
Topic
Education

This toolkit contains the working documents for school finance analysis and litigation. It includes a formula model specification, an aid run reconciliation worksheet, a weighted pupil calculator, a levy equalization comparison, a capital finance worksheet, an adequacy evidence inventory, a costing methodology comparison, a discovery request set, a remedy design outline, a levy and bond calendar, a choice program fiscal model, and a paired district comparison exhibit format. Each is annotated with the question it answers or the failure it prevents. The tools serve plaintiffs, states, districts, and legislative staff, because all four work from the same public documents.

The Funding Formula Model, Adequacy Evidence, and Bond and Levy Toolkit

Education > School Finance, Funding Formulas, and Adequacy Litigation | Published 21 August 2024 - Updated 22 July 2026 | UpLaw - uplaw.us

Tool 1: Formula model specification

ONE ROW PER DISTRICT

 IDENTITY      name, code, county, enrollment

 PUPIL COUNTS  raw count (formula method)
               low-income count      x weight ____
               English learner count x weight ____
               disability count      x weight ____
               other categories      x weight ____
               = TOTAL WEIGHTED PUPILS

 ENTITLEMENT   base amount x weighted pupils
               + categoricals inside the formula
               = TOTAL ENTITLEMENT

 LOCAL         assessed valuation, total and per pupil
               equalization ratio applied
               required local effort (uniform rate)
               excess over entitlement
               recapture, if any

 STATE         computed state share
               hold-harmless adjustment
               minimum aid adjustment
               = ACTUAL STATE AID  ← reconcile to aid runs

 MARGIN        add-on levy rate actually levied
               add-on yield, total and per pupil

 OUTSIDE       categoricals outside the formula
               federal revenue

 CAPITAL       debt outstanding / limit / capacity
               debt service levy rate and yield
               state capital aid, if any

 TOTALS        total per-pupil revenue, all sources
               operating per-pupil revenue
               effective total tax rate

The reconciliation test. Sort by property wealth per pupil and confirm that ACTUAL STATE AID matches the published aid runs, district by district. Until it does, nothing drawn from the model is reliable — and the discrepancy is nearly always a hold-harmless or minimum aid provision the analyst had not found.

Tool 2: Aid run reconciliation worksheet

RECONCILIATION — [state], [fiscal year]

  District    Model state aid   Published aid   Difference
  __________  _______________   _____________   __________
  __________  _______________   _____________   __________

  IF DIFFERENCES EXIST, CHECK IN ORDER
   [ ] Hold-harmless provision not modeled
   [ ] Minimum aid guarantee not modeled
   [ ] Wrong pupil count method or count date
   [ ] Wrong valuation year or equalization ratio
   [ ] Categorical program inside vs. outside the formula
   [ ] Recapture applied or not applied
   [ ] Prorating factor applied to the appropriation
   [ ] Small district or sparsity adjustment
   [ ] Transportation or other add-on inside the base
   [ ] Charter or choice deduction from the district count

  RECONCILED:  [ ] yes   Date: ______

The most common cause of failure to reconcile. A prorating factor applied when the appropriation falls short of the computed entitlement statewide. Many formulas compute a full entitlement and then scale every district proportionally, and that factor appears only in the appropriations act.

Tool 3: Weighted pupil calculator

WEIGHTED PUPIL COMPUTATION — [district]

  Raw pupil count (method: ______)              ______
  + Low-income     count ______ x weight ____ = ______
  + English learner count ______ x weight ____ = ______
  + Disability     count ______ x weight ____ = ______
  + Gifted         count ______ x weight ____ = ______
  + CTE            count ______ x weight ____ = ______
  + Sparsity/small district adjustment          ______
  = TOTAL WEIGHTED PUPILS                       ______

  ENTITLEMENT = weighted pupils x base $______ = ______

  WEIGHT ADEQUACY TEST
   Category          Weight   Est. excess cost   Gap
   ______________    _____    ______________     _____
   ______________    _____    ______________     _____

The test that matters. Compare each weight to the estimated excess cost of serving that population. A weight substantially below actual excess cost transfers the shortfall to the district's general resources, which means high-need districts subsidize their own weighted programs from the base — the opposite of what the weight is meant to accomplish.

Tool 4: Levy equalization comparison

UNEQUALIZED MARGIN — per-pupil yield at a uniform rate

  District   Valuation/pupil   Rate levied   Yield/pupil
  _________  _______________   ___________   ___________
  _________  _______________   ___________   ___________

  YIELD AT A UNIFORM 10 MILLS
  District   Valuation/pupil   Yield/pupil at 10 mills
  _________  _______________   _______________________
  _________  _______________   _______________________

  RATIO, highest to lowest yield: ______ to 1

  EQUALIZATION OPTIONS MODELED
   [ ] Guaranteed yield: state supplements to $____ per
       pupil per mill
       Cost to the state: $______
   [ ] Guaranteed valuation: state treats each district as
       having at least $____ per pupil in valuation
       Cost to the state: $______
   [ ] Recapture above $____ per pupil in valuation
       Revenue generated: $______
   [ ] Cap on add-on levy at ____ mills
       Revenue foregone by high-wealth districts: $______

Why this is the highest-value single worksheet. The unequalized margin generates most of the disparity in most states, and it is the component that formula descriptions and adequacy studies routinely omit. The ratio line — highest to lowest per-pupil yield at the same rate — is the most persuasive single number available in this field.

Tool 5: Capital finance worksheet

CAPITAL — [district]

  Assessed valuation                            ______
  Statutory debt limit (____% of valuation)     ______
  Debt outstanding                              ______
  REMAINING CAPACITY, total and per pupil       ______

  Debt service levy rate                        ______
  Debt service yield                            ______

  Facility inventory
   Buildings ______  Average age ______
   Condition assessments on file: [ ]
   Deferred maintenance backlog: $______

  Referendum history
   Date   Amount   Result   Margin
   _____  _______  _______  ______
   _____  _______  _______  ______

  Bond rating: ______   Recent interest rate: ______

  State capital aid received: ______

  STATEWIDE COMPARISON
   Remaining capacity per pupil, this district:  ______
   Statewide median:                             ______
   Ratio, highest to lowest capacity per pupil:  ______

Why capital is analyzed separately. In most states it sits entirely outside the operating formula, is financed by local debt against local valuation, and is subject to debt limits expressed as a percentage of that valuation — so the districts with the oldest buildings have the least capacity to replace them. Where a state provides no capital equalization, this worksheet documents the largest disparity in the system.

Tool 6: Adequacy evidence inventory

ADEQUACY RECORD — [state]

 THE STANDARD (what the state itself adopted)
  [ ] Content standards by subject and grade
  [ ] Graduation requirements
  [ ] Accountability framework and performance targets
  [ ] Any statutory statement of what an adequate
      education includes
  [ ] State-commissioned costing or adequacy studies
  [ ] Actual funding level relative to those studies

 OUTCOMES
  [ ] Assessment results by district and subgroup
  [ ] Graduation and completion rates
  [ ] Postsecondary readiness indicators

 INPUTS
  [ ] Teacher qualifications, experience, turnover
  [ ] Class size and staffing ratios
  [ ] Course offerings, especially courses required for
      graduation and for postsecondary admission
  [ ] Counselors, librarians, nurses, support staff
  [ ] Instructional materials and technology
  [ ] Facility condition and capacity

 COMPARISONS
  [ ] Paired districts, high and low wealth
  [ ] Same standards, different resources — documented
  [ ] Photographs and condition reports

 THE STATE'S OWN ADMISSIONS
  [ ] Agency reports acknowledging shortfalls
  [ ] Internal modeling of proposed changes
  [ ] Fiscal notes on formula amendments

The two highest-value rows. The state's own costing study and the funding level relative to it. A state that studied what adequacy costs and then funded below it has produced the central exhibit, and it should be the first discovery request served.

Tool 7: Costing methodology comparison

  Method                Strength              Known weakness
  --------------------------------------------------------
  Professional          Grounded in           Reflects
   judgment panel        practitioner          participant
                         experience            preferences
  Successful schools    Uses actual           Selects on the
                         districts meeting     dependent
                         the standard          variable
  Cost function         Statistically         Specification
   (econometric)         rigorous; controls    contested;
                         for need              sensitive to
                                               assumptions
  Evidence-based        Builds a resource     Assumes research
   resource model        model from research   consensus that
                                               may not exist

  METHOD SELECTED: ______  WHY: ______________________
  ANTICIPATED CROSS-EXAMINATION: ____________________
  CORROBORATION FROM A SECOND METHOD: _______________

The practical instruction. Cases in this field are frequently decided on methodological cross-examination rather than on the constitutional question. Select deliberately, know the weakness before the defense states it, and corroborate with a second method where resources permit.

Tool 8: Discovery request set

REQUESTS TO THE STATE

 1. All aid run computations for the past ten years, in
    native format with formulas intact.
 2. All modeling performed by the agency for any proposed
    formula change, whether or not enacted.
 3. All costing, adequacy, or resource studies commissioned,
    received, or reviewed by the state, and all drafts.
 4. All fiscal notes on formula amendments.
 5. All internal communications concerning the sufficiency
    of the base amount or the weights.
 6. All facility condition assessments and inventories.
 7. All correspondence with the federal government
    concerning compliance with *[20 U.S.C. § 6311](/documents/statute/united-states-code-sect-20-usc-sect-6311)*, *[20 U.S.C. § 6312](/documents/statute/united-states-code-sect-20-usc-sect-6312)*,
    *[20 U.S.C. § 6313](/documents/statute/united-states-code-sect-20-usc-sect-6313)*, *[20 U.S.C. § 6314](/documents/statute/united-states-code-sect-20-usc-sect-6314)*, *[20 U.S.C. § 6315](/documents/statute/united-states-code-sect-20-usc-sect-6315)*, and *[20 U.S.C. § 6320](/documents/statute/united-states-code-sect-20-usc-sect-6320)*, and the
    standards at *[34 C.F.R. Part 200](/documents/regulation/34-cfr-part-200)*; and concerning *[20 U.S.C. § 1400](/documents/statute/united-states-code-sect-20-usc-sect-1400)*,
    *[20 U.S.C. § 1411](/documents/statute/united-states-code-sect-20-usc-sect-1411)*, and *[20 U.S.C. § 1412](/documents/statute/united-states-code-sect-20-usc-sect-1412)* with *[34 C.F.R. Part 300](/documents/regulation/34-cfr-part-300)*.
 8. All maintenance of effort, comparability, and
    supplement-not-supplant documentation and any waivers
    sought or granted.
 9. All documents concerning obligations under *[20 U.S.C. § 1701](/documents/statute/united-states-code-sect-20-usc-sect-1701)* and
    *[20 U.S.C. § 1703](/documents/statute/united-states-code-sect-20-usc-sect-1703)*, and under *[42 U.S.C. § 2000d](/documents/statute/united-states-code-sect-42-usc-sect-2000d)* and *[20 U.S.C. § 1681](/documents/statute/united-states-code-sect-20-usc-sect-1681)* with the
    standards at *[34 C.F.R. Part 106](/documents/regulation/34-cfr-part-106)*.
10. All assessed valuation and equalization ratio data.
11. All documents concerning any hold-harmless, minimum aid,
    proration, or recapture provision, including its cost.
12. Purpose and definitional materials under *[20 U.S.C. § 6301](/documents/statute/united-states-code-sect-20-usc-sect-6301)* and
    *[20 U.S.C. § 7801](/documents/statute/united-states-code-sect-20-usc-sect-7801)* as applied by the agency.

Tool 9: Remedy design outline

REMEDY

 I.   RELIEF SOUGHT
      Prospective declaratory and injunctive relief against
      named state officials in their official capacities.
      *[Ex Parte Young](/documents/opinion/209-us-123)* permits it.

 II.  WHAT IS NOT SOUGHT
      Retroactive monetary relief payable from the state
      treasury. *[Edelman v. Jordan](/documents/opinion/415-us-651)*; *[Papasan v. Allain](/documents/opinion/478-us-265)*.

 III. THE COMPLIANCE STANDARD
      Measured against: ______________________________
      Reported: [frequency] by [official]
      Assessed by the court on: ______________________

 IV.  TIMETABLE
      Legislative response due: ______
      First compliance report: ______
      Court review: ______

 V.   MODIFICATION
      The state may seek modification on changed
      circumstances. *[Horne v. Flores](/documents/opinion/557-us-433)*. A consent decree, if
      entered, is enforceable notwithstanding sovereign
      immunity. *[Frew v. Hawkins](/documents/opinion/540-us-431)*.

 VI.  FEDERAL COMPLIANCE CHECK
      Supplement not supplant, comparability, and
      maintenance of effort tested against the remedy.

 VII. PARALLEL LEGISLATIVE PROPOSAL
      Modeled, with the district-by-district table attached.

Why the parallel proposal. A judgment without an implementable reform frequently produces years of partial legislative responses. A judgment accompanied by a modeled proposal gives the legislature something to enact.

Tool 10: Levy and bond calendar

ANNUAL LEVY CYCLE
  Certified valuation received:            ______
  Budget adopted:                          ______
  Public hearing (notice requirements):    ______
  Levy certified to the county:            ______
  STATUTORY CERTIFICATION DEADLINE:        ______
  Tax bills issued:                        ______
  Distributions received:                  ______ / ______

BOND REFERENDUM CYCLE
  Needs assessment completed:              ______
  Debt capacity computed:                  ______
  Board resolution calling the election:   ______
  STATUTORY DEADLINE TO CALL:              ______
  Ballot language filed and reviewed:      ______
  Notice publication completed:            ______
  Election date:                           ______
  Bond counsel opinion:                    ______
  Bonds issued:                            ______
  Debt service levy added:                 ______

Two deadlines that are effectively jurisdictional. Levy certification, where late certification loses the levy for the year with no cure; and the deadline to call a bond election, which forfeits a full cycle. Ballot language defects are the third recurring problem, and they can invalidate an approved issue after the fact.

Tool 11: Choice program fiscal model

PROGRAM: [voucher / tax credit / ESA / charter]

  Amount per participating student:            ______
  Source: [state only / state plus local levy]  ______
  Formula count adjustment: [immediate / lag]   ______

  SENDING DISTRICT EFFECT
   Revenue lost per departing student:         ______
   Fixed costs retained (building, admin,
     transportation, staffing):                ______
   NET COST PER DEPARTING STUDENT:             ______
   Students departing (projected):             ______
   TOTAL DISTRICT IMPACT:                      ______

  STATE EFFECT
   Participants previously in public school:   ____%
   Participants previously in private school:  ____%
   NET STATE COST OR SAVING:                   ______

  SPECIAL EDUCATION RESPONSIBILITY
   Who provides services under *[20 U.S.C. § 1412](/documents/statute/united-states-code-sect-20-usc-sect-1412)* and
   *[34 C.F.R. Part 300](/documents/regulation/34-cfr-part-300)*?                                   ______

  PRIVATE SCHOOL SERVICES under *[20 U.S.C. § 6320](/documents/statute/united-states-code-sect-20-usc-sect-6320)*:     ______

The constitutional posture to note alongside the fiscal analysis. Zelman v. Simmons-Harris, Mueller v. Allen, and Committee for Public Education & Religious Liberty v. Nyquist frame the establishment question; Trinity Lutheran Church of Columbia, Inc. v. Comer, Espinoza v. Montana Dept. of Revenue, and Carson v. Makin generally prohibit excluding religious schools; Agostini v. Felton and Mitchell v. Helms permit services and materials; and Arizona Christian School Tuition Organization v. Winn limits standing to challenge credit-based programs. The constitutional questions are largely settled; the fiscal ones on this worksheet are not.

Tool 12: Paired district comparison exhibit

[HIGH-WEALTH DISTRICT]        [LOW-WEALTH DISTRICT]

Valuation per pupil    ____   ____
Total tax rate         ____   ____
Per-pupil revenue      ____   ____
Teachers per 100
  students             ____   ____
Average teacher
  experience           ____   ____
Teacher turnover       ____   ____
Advanced courses
  offered              ____   ____
Courses required for
  graduation offered   ____   ____
Counselors per 500
  students             ____   ____
Average building age   ____   ____
Deferred maintenance
  per pupil            ____   ____
Assessment results     ____   ____
Graduation rate        ____   ____

SAME STATE. SAME STANDARDS. SAME GRADUATION REQUIREMENTS.

Why this exhibit does the work. San Antonio Independent School District v. Rodriguez moved this litigation to state courts, where the question is whether the state has provided what its own constitution requires. Aggregate statistics establish the pattern; this table makes it comprehensible, and the last line is the entire argument. Brown v. Board of Education and Plyler v. Doe supply the background principle that education cannot be distributed on constitutionally forbidden grounds; state education clauses supply the affirmative obligation this exhibit measures.

How the twelve tools fit together

First, always: Tool 1 and Tool 2. Nothing else is reliable until the model reconciles.

Then the diagnostics: Tool 3 (weights), Tool 4 (the margin), Tool 5 (capital). These three identify where the disparity actually lives.

If litigation follows: Tool 6 (evidence inventory), Tool 7 (methodology), Tool 8 (discovery), Tool 9 (remedy), and Tool 12 (the exhibit).

For district practice: Tool 10, continuously.

When a choice program is proposed: Tool 11, before the policy debate concludes.

The observation worth ending on. Ten of these twelve tools are arithmetic. That is not a limitation of the field; it is the field. The constitutional questions in school finance were substantially settled decades ago, and what remains is a set of statutes that distribute money according to rules anyone can model and almost nobody does.

Appendix: building the model in practice

A few operational notes that shorten the work considerably.

Start from the aid runs, not from the statute. Load the published district-level computation into the model first, then build the formula around it. Working forward from the statute and hoping to match the runs takes far longer than working backward from the runs and identifying which provision explains each column.

Keep the formulas live. A model with hard-coded values cannot answer the question that will actually be asked, which is always "what if the base were X" or "what if this weight were Y." Every parameter should be a single cell that every dependent computation references.

Separate parameters from data. One sheet holds the base amount, the weights, the uniform rate, the hold-harmless rule, and the caps. Another holds district-level data. A third computes. Changing a policy parameter should require editing exactly one cell.

Build the district-by-district difference table as a standing output. Two scenarios, current and proposed, with the per-district and per-pupil difference and a sort by property wealth. This is the artifact everyone will ask for, and having it generate automatically is worth the setup.

Version the scenarios. Label each with the parameter set that produced it and the date. Legislative discussions generate many variants, and an unlabeled spreadsheet becomes useless within weeks.

Document the sources. Every data column should carry a note identifying the source file, the year, and the retrieval date. Opposing experts will ask, and reconstructing provenance later is painful.

Check the extremes. After any change, look at the five districts with the highest and lowest property wealth per pupil and confirm the results are explicable. Formula errors show up at the tails first.

Keep a reconciliation tab. After every modification, re-run the reconciliation against the published aid runs for the base scenario. A model that reconciled last month may not reconcile after an edit, and discovering that during testimony is the worst available outcome.

Share the model. In legislative work, a model that others can inspect and run is far more persuasive than results presented as conclusions. In litigation, expect to produce it, and build it so that production is not embarrassing.

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