The Basic Education Program 2.0 (BEP) includes the funding formula used to allocate state education dollars to Tennessee k-12 schools. The general purpose of the fiscal capacity formula is to provide a method for sharing the burden of the local component of the BEP between local governments across the state. Fiscal capacity is defined as the relative ability of local governments to generate revenue from own sources. Capacity for each local government is measured by applying uniform tax rates to the government's actual local sales and property tax bases. The average tax rates are calculated as the average use of each base by local governments for education. Each local government's capacity is defined as its percent of the sum of all local governments' capacity to raise revenues from own sources.
revised: March 13, 2013
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