TACIR reviews fiscal capacity model; staff proposes alternatives including handling virtual‑school enrollment

TACIR staff presented the fiscal capacity report for Fiscal Year 2023–24 and described potential model changes to better reflect local funding capacity.

Senior research analyst Presley Powers explained the regression‑based fiscal‑capacity model used to apportion local contributions under the Tennessee Investment and Student Achievement Act (TISA). For FY24 Powers said base funding was set at $6,860 per student and that the model draws on factors such as own‑source revenue per student, sales tax base per student, equalized property assessments, per capita income and average daily membership.

Staff proposed replacing long‑stale tax‑equivalent payment (TEP) data with industrial development board assessment data, monitoring the service responsibility factor, adjusting how virtual school students are counted, and considering a school‑system level model to reduce intra‑county disparities. Powers showed that including virtual‑school students in county calculations redistributed basin‑weight funding — noting an estimated $1.2 million increase in state funding for Union and Johnson Counties and a corresponding decrease for other counties in the FY23–24 calculations.

Members asked about whether the model considers local debt (it does not), how averages versus medians affect results in redlined cities, and whether virtual students could be counted by residence rather than by the school system. Staff said modeling those alternatives is feasible but would require changes to the calculation approach before Department of Education use. The discussion closed with acknowledgement the model may warrant future refinements.