Annual Report 2001 - Alabama Department of Education

Local Education Agencies
PUBLIC EDUCATION
Public education in the State of Alabama is funded from three basic sources. One source of revenue is the state
Education Trust Fund (ETF), which is funded from tax revenues raised primarily from sales and income taxes. The
second source of public education funding is derived from local tax receipts which, as of FY 1998, must be equivalent to
10 mills of school tax based upon the most current assessed valuation of property. Under the current law, these two
sources of revenue create the Foundation Program Fund to cover the cost of the Foundation Program calculations. A
third revenue source, the Public School Fund is funded from 3 mills of the 6 1/2 mills of ad valorem tax. The Public
School Fund is used to fund the Hold Harmless program as well as Capital Projects.
PUBLIC EDUCATION IN ALABAMA
• Foundation Program
(1) Education Trust Fund (Sales and Income Tax)
(2) Local Tax Receipts (Equivalent to 10 mills)
• Hold Harmless and Capital Projects
(3) Public School Fund (3 mills Ad Valorem Tax)
The Foundation Program, enacted by the Alabama Legislature in 1995, is a funding mechanism to calculate the cost for
K-12 education. It is designed to give local school systems maximum control of expenditures by apportioning funds in a
“block grant” manner based on cost calculations using prior year data, such as average daily membership (ADM). The
Foundation Program, as codified in Code of Alabama 16-13-231(b), provides the following for the Foundation Program
Fund:
• Requirements for Participating in the Foundation Program Fund
• Determining Cost of Foundation Program
• Determining Funds Available to Provide Foundation Program
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