Recent Developments in Education Fiscal Capacity

A new prototype system-level fiscal capacity model was developed at the request of the Governor’s Task Force on Teacher Pay and the Basic Education Program Review Committee (BEPRC) in response to the third decision by the Tennessee Supreme Court striking down the state’s method of funding public schools. A staff group was formed by members of the Governor's Task Force to review alternatives to the current county-level fiscal capacity model, which was regarded by members of the Task Force as contributing to inequities in funding Tennessee's public schools. A Prototype Model for System-Level-Fiscal Capacity in Tennessee: Why and How, presents an overview of events leading to the appointment of the Governor’s Task Force in 2003 and subsequent attempts to improve the state’s method of equalizing funding for public schools with emphasis on the equalization model developed by TACIR staff working with staff of the Comptroller's Offices of Research and Education Accountability in consultation with outside experts.

In 2004, the BEPRC was specifically requested by the legislature to “give special consideration to development and implementation of a system level fiscal capacity model.” (Public Chapter 670, Acts of 2004.) It released its second annual November report to the Governor, the State Board of Education and the General Assembly in 2005, and recommended in it adopting a system-level fiscal capacity model along with several significant enhancements in the BEP formula.

The county-level fiscal capacity model used since the inception of the Basic Education Program funding formula in 1992 and described in A User’s Guide to Fiscal Capacity in the Basic Education Program Formula remains in place. Adoption of any new model must be approved by the State Board of Education, the Commissioner of Education and the Commissioner of Finance and Administration. (Tennessee Code Annotated §49-3-356.)

A compendium of publications on fiscal capacity and related topics is maintained on the TACIR web site. Click on the Fiscal Capacity button below to access the compendium and additional information about the county and prototype models.