The Governor’s Fiscal Year (FY) 16-17 proposed school funding formula included a reduction in the transitional aid guarantee. Over time, the Guarantee has served to stabilize funding from one year to the next by ensuring that districts funding does not fall below a prior year funding level. In the current budget, districts are assured that FY14 and FY15 funding amounts are not less than the formula aid received in FY13.
While the Governor’s office has persistently asserted that the primary reason school districts end up on the Guarantee is ADM loss, the design of the formula is often the primary reason why the number of districts and amount of money directed to the guarantee varies from year to year. Table one provides a comparison of the Guarantee in FY15 to the FY16 and FY17 Governor and House proposed funding plans. Even though the Formula ADM under each of these funding formulas is the same, the number of districts and amount of the guarantee vary significantly.
Table 1: FY15-FY17 Guarantee Comparison
| FY15 | FY16 Governor | FY16 House | FY17 Governor | FY17 House | |
| $ Amount of Guarantee | $195.3 Million | $153.3 Million | $122.9 Million | $138.4 Million | $127.0 Million |
| # of Districts on Guarantee | N=198 | N=226 | N=118 | N=184 | N=122 |
Source: Data based on LSC simulations of the Governor and House funding formulas
Tables two and three show additionally a comparison of the number of districts on the Guarantee in FY10 vs. FY15 as well as the cost of the Guarantee by district typology group.
Table 2: FY10, FY15, and House FY17 Districts on Guarantee by Typology Group
| Typology Group | # of Districts | FY10 # of Districts on Guarantee | FY10 % of Total Guarantee $ Amount | FY15 # of Districts on Guarantee | FY15 % of Total Guarantee $ Amount | FY17 House # of Districts on Guarantee | FY17 House % of Total Guarantee $ Amount |
| Poor Rural Districts | 123 | 59 | 5.0% | 40 | 15.3% | 17 | 12.2% |
| Rural Districts | 107 | 76 | 5.4% | 69 | 24.4% | 25 | 14.5% |
| Rural Small Towns | 111 | 104 | 16.8% | 47 | 16.6% | 33 | 22.2% |
| Poor Small Towns | 89 | 40 | 4.4% | 14 | 5.8% | 7 | 4.1% |
| Suburban Districts | 77 | 74 | 32.7% | 14 | 5.9% | 16 | 14.4% |
| Wealthy Suburban | 46 | 46 | 27.1% | 10 | 3.8% | 22 | 26.3% |
| Urban Districts | 47 | 21 | 5.5% | 2 | 7.2% | 2 | 6.4% |
| Major Urban Districts | 8 | 2 | 3.1% | 1 | 20.8% | 0 | 0.0% |
| Total | 610 | 423 | 100% | 198 | 100% | 122 | 100.0% |
Table two shows that in FY10 rural and poor rural districts comprised 10.4% of the total guarantee amount while suburban districts comprised 59.8% of the total guarantee amount. In FY15 this pattern was reversed with rural and poor rural districts comprising 39.7% of the total guarantee amount while suburban districts comprised 9.7%. The House-proposed FY17 formula would reduce the percentage of the total guarantee amount going to rural districts to 26.7% while increasing the share comprised by suburban districts to 40.7%.
Table three shows the guarantee amounts in total and per pupil for FY10, FY15, and FY17 under the House proposal by typology group.
Table 3: FY10, FY15, and House FY17 Guarantee Amounts by Typology Group
| Typology Group | FY10 Guarantee Amount | FY10 Guarantee Amount Per Pupil | FY15 Guarantee Amount | FY15 Guarantee Amount Per Pupil | FY17 House Guarantee Amount | FY17 House Guarantee Amount Per Pupil |
| Poor Rural Districts | $44,340,002 | $260 | $29,881,254 | $190 | $15,438,299 | $98 |
| Rural Districts | $48,524,557 | $441 | $47,635,351 | $478 | $18,416,633 | $185 |
| Rural Small Towns | $149,437,299 | $811 | $32,478,341 | $192 | $28,172,670 | $166 |
| Poor Small Towns | $38,973,315 | $190 | $11,412,600 | $59 | $5,219,698 | $27 |
| Suburban Districts | $291,462,951 | $878 | $11,548,803 | $37 | $18,231,434 | $58 |
| Wealthy Suburban | $241,508,073 | $981 | $7,438,095 | $31 | $33,393,090 | $140 |
| Urban Districts | $49,392,885 | $209 | $14,106,371 | $61 | $8,144,781 | $35 |
| Major Urban Districts | $27,230,752 | $98 | $40,578,726 | $150 | $0 | $0 |
| Islands & Other | $17,046 | $91 | $196,233 | $1,295 | $0 | $0 |
| Total | $890,886,881 | $505 | $195,275,774 | $117 | $127,016,605 | $76 |
The main findings of the analysis shown in Tables two and three are as follows:
1) In FY10 there were 423 districts on the guarantee at a cost of $890.9 million.
2) In FY15 there are 198 districts on the guarantee at a cost of $195.3 million.
3) Major urban districts receive more guarantee dollars in FY15 than in FY10. All other types of districts receive less on average. Only two urban districts would be on the guarantee in FY17 under the House proposed funding plan.
4) Rural and poor rural districts comprised 10% of all guarantee dollars in FY10. They comprise 40% of the guarantee dollars in FY15. Under the House proposal in FY17, rural and poor rural districts comprise 27% of the guarantee dollars.
5) Suburban & wealthy suburban districts comprised 60% of all guarantee dollars in FY09 and comprise 10% of the guarantee dollars in FY15. Under the House proposal in FY17 suburban & wealthy suburban districts comprise 41% of the guarantee dollars.