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Tennessee Fact Sheet

Background

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The Tennessee costing-out process undertaken in 1992 was not a typical cost study, as are almost all of the other studies summarized in this section’s Fact Sheets. While the initial cost analysis attempted to calculate the funding needed to satisfy the state constitutional mandate for an adequate and equitable educational opportunity, the system, adapted and adjusted each year, functions as the foundation of the state’s education finance system. Annual adjustments are not based on costing-out studies.

State Funding Context

From NCES statistics (most current available):
Number of Pre-K to 12 Students, 2001-02: 924,899
Total Public School Expenditures, 2001-02: $5.5 billion
Percent Eligible for Free/Reduced Lunch, 2001-02: Not Reported
Percent in limited-English-proficiency programs, 2001-02: Not Reported

Title: "Basic Education Program"
Date Completed: 1992 and annual adjustments
Calculated Base Costs: The Basic Education Program (BEP) defined 42 components necessary for appropriate school funding. The cost of these components is re-evaluated each year by the state board of education. The state share of these costs ranges from 50 to 75 percent.
Special Features of the Study: The BEP is the result of the 1992 Educational Improvement Act, passed by the legislature while awaiting a school funding decision by the state Supreme Court in Tennessee Small School Systems v. McWherter (Small Schools I). The BEP includes funding for components of school budgets such as personnel, classroom supplies, technology, and special education programs. It also includes non-classroom related items such as pupil transportation and capital outlay. It fails to include teacher salaries as a component, a fact that led to a follow up compliance proceeding, in Tennessee Small School Systems v. McWherter (Small Schools II). As a result of this decision, the legislature passed the Teacher's Salary Equity Plan in 1995, which was later declared insufficient in Tennessee Small School Systems v. McWherter (Small Schools III). The Supreme Court declared teacher salaries as important, if not more, as the other components contained in the BEP, and demanded a superior effort towards equalizing pay scales for teachers across Tennessee. As a result, teacher salaries now appear as part of the BEP, and the legislature recently appropriated funds for better salary equalization.
Methodology: Not an actual costing-out study. The annual analysis of the Basic Education Program does not use any of the common costing-out methodologies. Instead, it uses census data and current component costs to assign funding to schools.
Implementation: In use.
Public Input: None.
Prepared by: Tennessee Board of Education
Prepared for: Tennessee Legislature, Tennessee Department of Education