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IRN: 044636
District: PARMA CITY S.D.
County: CUYAHOGA
Provisions of Section 265.220 of Am. Sub. H. B. 49 provide for limiting the foundation funding that is generated through
the foundation formula to a limitation base above which the district cannot be paid. The legislation provides that some
of the funding components of the foundation formula in FY19 be subject to the limitation while other components are kept
outside of the cap. For the calculation of the funding cap reduction, we distinguish Eligible power plant school districts
from other districts to establish a different approach to calculating their funding limitation. Eligible power plant
school districts are those that have an electric power plant and also simultaneously satisfy the following 3 conditions
in terms of the value of their properties:
1) Public utility tangible property value in TY16 must be at least equal to 10% of total valuation in TY16
2) Public utility tangible property value in TY17 is less than 90% of the public utility tangible property value in TY16
3) Total power plant value in TY17 is less than 90% of total power plant value in TY16
The following funding components are subject to the cap although special education funding (C) and all the transportation
funding components (I through L) are exempted unless the overall cap limitation cannot be achieved without reducing them.
Very seldom will there be a need to reduce these funding amounts and almost always they escape the effect of the cap.
* For a capped district the cap ratio should exactly equal (AF/N), however since some funding components are held harmless
from the cap, the actual reduction ratio needs to be adjusted downward to a ratio lower than what AF divided by N generates
so that the resulting cap ratio, once applied to the cap-subjected funding components, will yield a total funding amount
that does not exceed the cap limit.