Tennessee Education Department outlines TISA funding formula, growth stipend rules and new funding floor

The Tennessee Department of Education on the Senate Education Committee’s agenda detailed how the state’s TISA school funding formula translates student characteristics into funding, and explained new and one-time supports designed to soften abrupt losses in district allocations.

Emily Cornute, the department’s director of legislative affairs, introduced the presentation and Mary Ann Dursky, identified in the record as the department’s chief financial officer, walked senators through the TISA "pyramid" of base funding, weights, direct funding and outcomes funding.

Dursky said the base funding amount used in calculations this year is $7,295. She described weights — multipliers applied to the base — that generate extra funding for students with particular needs. Small districts (1,000 or fewer students) and sparse districts (fewer than 25 students per square mile) each generate a 5% weight; 22 districts qualified as small and 83 qualified as sparse in the current year, the department said. Concentrated-poverty schools (Title I schoolwide designation, 40%+ poverty) generate an additional 5% of the base, while economically disadvantaged students (homeless, foster, unaccompanied youth, migrant, or directly certified via SNAP or TANF) generate a 25% weight.

On unique learning needs, Dursky said weights range from about 15% to 150% of the base depending on the services a student requires for success.

Direct funding — flat-dollar program allocations outside the percentage-based weights — includes $500 per ADM for K–3 and fourth-grade literacy supports; career and technical education allocations between $5,000 and $5,700 per CTE ADM; $43 per postsecondary assessment (two opportunities total $86); and a statewide $22,000,000 charter-supports pool, described as roughly $500 per charter student when divided across all charter enrollment.

Dursky also explained growth funding mechanics. Fast-growth stipends are available when a district’s recalculated TISA allocation (using current-year ADMs) exceeds the district’s current allocation by more than 1.25%. The department reruns the calculation five times during the year and performs a June true-up. Using a department example, a district whose allocation rose from $14,000,000 to $14,600,000 (about a 4% increase) would receive a state-share stipend on the portion of growth above 1.25%; the example yielded about $334,000 for the district. The FY appropriation for fast growth is $60,000,000, including up to $5,000,000 reserved for infrastructure stipends for districts that demonstrate sustained non-virtual enrollment growth of 2% or more for three consecutive years. Dursky said fast-growth stipends are paid first; infrastructure stipends are paid from any remaining funds and stipends would be prorated if aggregate growth exceeds the appropriation.

Dursky confirmed virtual students are included in basic TISA allocations but are excluded from fast-growth and infrastructure calculations because the statute historically targeted brick-and-mortar costs such as facilities and staffing.

The department described three supports outside the core formula: the BEP-transition payment (a stepped-down payment for districts that would have received less under TISA; a maximum of four years), a 5% safety net guaranteeing a district’s TISA allocation will not fall below 95% of the prior year’s allocation, and a new funding floor for FY27 to restore state funding for districts whose allocation declines and who have decreased non-virtual enrollment. Dursky said three districts qualify for BEP-transition funding this year and that the department will run FY27 projections in February to identify districts that may qualify for the funding floor.

Committee members pressed the department on the definition of "economically disadvantaged," noting Tennessee moved to direct certification (SNAP/TANF) around 2017 and that a USDA pilot has introduced Medicaid-based codes for nutrition eligibility; the department said those Medicaid codes have not yet been folded into the state’s definition for TISA funding or accountability. Senators also asked for a district-level accounting of the prior-year 75% hold-harmless appropriation and for analysis of how definitions and hold-harmless language affect local budgets.

The department attributed year-to-year differences in how many districts qualify for fast-growth stipends to multiple factors — migration to home-school/private options, lower birth rates and general attrition — and not to a single cause.

The presentation concluded after committee questions. The committee had earlier placed SB912 and SB1027 on the calendar as indicated by clerk announcements. The committee adjourned without recorded formal votes on the motion to adjourn.