Basic support payments (section 7003(b))

What this funds

An LEA is eligible for Basic Support Payments only if the total number of eligible federally connected students described above is at least 400 in average daily attendance, or 3 percent of total average daily attendance. In order to receive payments on behalf of students in categories (F) and (G), an LEA must have at least 1,000 such students in average daily attendance, or the number of such students must equal or exceed 10 percent of the total average daily attendance in To determine the maximum payment an LEA may receive, the statute specifies weights for each category of federally connected students. The weighted student count is multiplied by the greatest of four local contribution rates (LCRs), which are intended to represent the local share of the cost of educating these students, to determine the LEA's maximum payment. The four LCR ' one-half of the U.S. average per-pupil expenditure for education; ' one-half of the State per-pupil expenditure (SPPE); ' the LCR of comparable LEAs in the State; and ' the product of the SPPE and the local contribution percentage (the percentage of education expenditures that comes from the local level) in the State. If appropriations are insufficient to make maximum payments in full, the formula reduces maximum payments by multiplying them by a percentage, called the Learning Opportunity Threshold (LOT) percentage, which is the sum of: ' the percentage of the LEA's students in average daily attendance who are federally ' the LEA's maximum payment under the Basic Support Payments formula as a percentage The sum of these 2 percentages may not exceed 100 percent. In addition to this maximum LOT, LEAs with an enrollment of fewer than 1,000 students and per-pupil expenditure below the State or national average receive a minimum LOT of 40 percent. The LOT percentage, when multiplied by a maximum payment, results in a LOT payment. If the appropriation is insufficient to provide LOT payments in full, the formula ratably reduces these payments. If the level of funding exceeds the level needed to fund LOT payments but is insufficient to provide maximum payments to all LEAs, the formula ratably increases these payments above the LOT. However, The Every Student Succeeds Act (ESSA), which amends the ESEA, and NDAA made multiple changes to eligibility criteria and payment formulas for Basic Support Payments for Heavily Impacted LEAs, including eliminating the distinction between new and continuing LEAs. Under the amended ESEA, there are 23 Heavily Impacted LEAs (out of more than 1,000 total LEAs receiving Impact Aid payments) that meet requirements generally reflecting greater impact on education revenues from the Federal presence than experienced by regular Impact Aid LEAs, including such factors as geographic boundaries contiguous or wholly within a Federal installation, high tax rates for general fund purposes, high enrollment of federally connected students, per-pupil expenditures, LEA poverty rates, and total enrollment. An LEA that loses eligibility for heavily impacted payments will continue to receive such a payment in the first year it falls out of eligibility. An LEA that loses eligibility due to falling below 95 percent of the average tax rate for general fund purposes for two consecutive years will continue to receive a heavily impacted payment in the first two years of ineligibility. An LEA must be eligible for two consecutive years before returning to Heavily Impacted status. The Heavily Impacted maximum payments are based on a formula that is similar to the regular Basic Support Payments but that produces much larger payments for the eligible LEAs. The average per-pupil payment for Heavily Impacted LEAs is roughly $6,500, compared to $1,700 per-pupil for regular Impact Aid districts. Under the formula for heavily impacted LEAs, LEAs receive funds on behalf of students in categories (F) and (G), even if the number of those students falls below the Basic Support Payment thresholds of 1,000 students or 10 percent. Moreover, many recipients' payments are based on substantially higher weights for federally connected students than apply to regular payments for the same types of students. Heavily impacted LEAs receive higher weights for their federally connected students based on the number of students in the LEA, the composition of the students within the LEA, or a combination of the two. For instance, federally connected students receive weights ranging from .05 to 1.35 per student under the regular Basic Support Payments formula, but they receive a weight of 1.75 per student under the Basic Support Payments for Heavily Impacted LEAs formula, provided that the LEA has 100 or fewer federally connected students. The local contribution rates (LCRs) are also much higher under the heavily impacted formula. ' 80 percent of the U.S. average per-pupil expenditure for education; or ' 80 percent of the SPPE. is sufficient to cover the maximum payments for these LEAs and funds are sufficient to fully fund LOT payments for regular LEAs under section 7003(b)(1). If the appropriation is insufficient to provide LOT payments in full for regular LEAs under section 7003(b)(1), Basic Support Payments to heavily impacted LEAs are ratably reduced by the same percentage as The Basic Support Payments program also includes hold-harmless language that applies to all eligible LEAs (regular and Heavily Impacted). An LEA with a payment that decreases by 20 percent or more from the previous year will receive 90 percent of the previous year's payment. In the following year, the LEA will receive no less than 85 percent of the previous year's payment. And in the third year following the determination of a 20 percent decrease in payment, the LEA will receive no less than 80 percent of the previous year's payment. Funding levels for the past 5 fiscal years were: For fiscal year 2027, the Administration requests $1.5 billion for Basic Support Payments, $3 million more than the fiscal year 2025 level. The request retains appropriations language enacted in 2024 and requested in 2027 that provides continued eligibility for students affected by the deployment or death of their military parents, helping to ensure that the LEAs serving these children are not adversely affected by ongoing military action overseas. The request recognizes that students counted under categories (A), (B) and (C)--primarily students who reside on Indian lands or who reside on and whose parents work on Federal property--represent a major financial expense for LEAs that educate them. Because federally owned land and Indian lands are exempt from local taxes, such LEAs lack the ability to raise funds to educate these students using property taxes, which are the primary source of local Although the impact of students counted under categories (D), (E), (F), and (G)--primarily students who reside in low-rent housing and students who reside, or whose parents work, on private property--does not create the same financial burden for LEAs, it is still significant. sales tax and, because of the Soldiers and Sailors Relief Act, often do not pay income taxes to their State or locality of residence. While all types of "off-base" students either reside, or have parents who work, on property that the district cannot tax, the education of children and youth who reside in low-rent housing is costly to districts because of the need for additional academic assistance and other supports often required for students

Extracted from Impact Aid, p. 34. Verbatim; nothing here is paraphrased.

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