EXAMINING INDIVIDUAL
SCHOOL DISTRICTS
DISTRICT WEALTH
School districts operate in an
environment where a variety of economic pressures, some in conflict with others,
are operating simultaneously.
·
School districts, supported by public funds, are
expected to operate efficiently and collect only the local tax revenue they
really need.
·
They are expected to anticipate the future and
establish reserve funds to protect against hard times.
·
They are expected to expend the necessary funds to
maintain an educational program that meets academic standards.
·
They are expected to expend the necessary amounts
to maintain a multi-million dollar investment in buildings and grounds.
·
They are expected to accomplish all this despite
uncertain economic conditions, changes in the student population and higher
standards.
Under any circumstances,
determining the overall fiscal health of a school district is a complex task. At
this time no single, generally accepted financial indicator exists. Indeed,
examining financial information alone is probably an inadequate approach.
Factors such as changing property values, student demographics, plans for major
capital expenditures and other non-fiscal circumstances may affect a district's
financial health. However, an analysis can begin with an examination of trends
over time.
This section contains
calculated data over a five-year period for two items: Pupil Wealth Ratio Index
and the Alternate Pupil Wealth Ratio Index. The Pupil Wealth Ratio and the
Alternate Pupil Wealth Ratio are the components of the Combined Wealth Ratio (CWR)
used in many aid formulas. The CWR and the baseline data for these items can be
found in the Masterfiles. The data presented here show these items as a
percentage of the statewide average for each year. These two items are only two
of the many factors which need to be considered when assessing a school
district's financial condition.
PUPIL
WEALTH RATIO (PWR) INDEX
Calculation: (Actual Valuation
of taxable real property / Total Wealth Pupil Units) / State Average
This is the Property wealth
component of the Combined Wealth Ratio used in State Aid formulas. The property
tax is the dominant source of local funding for most districts. The higher the
pupil wealth ratio, the greater the property wealth behind each pupil, thus the
greater the potential to generate funds locally.
ALTERNATE
PUPIL WEALTH RATIO INDEX
Calculation: (Adjusted Gross
Income / Total Wealth Pupil Units) / State Average
This is the Personal Income component of the Combined Wealth Ratio used in State Aid formulas. In standard economic theory, the greater the income behind each pupil, the greater the marginal ability to pay school taxes.