TISA Explained: A Deep Dive into Tennessee's Student-Based Funding Formula

In 2022, Tennessee enacted a significant overhaul of its K-12 education funding system with the passage of the Tennessee Investment in Student Achievement (TISA) Act.[1, 2] Effective July 1, 2023, TISA replaced the Basic Education Program (BEP), which had been the state's resource-based funding formula for over three decades.[1, 2] TISA introduces a student-based funding model, designed to direct educational resources more precisely according to the individual needs of Tennessee's nearly one million students.[2] This deep dive explores the core components, goals, and mechanics of the TISA funding formula.

For a broader overview of how schools are funded in the state, please see our comprehensive guide: Understanding Tennessee School Funding.

Why TISA? The Shift to a Student-Centered Approach

The transition from the BEP to TISA was driven by a recognized need for a more adequate, equitable, and transparent funding system.[2] The BEP, a complex resource-based formula, was often criticized for not sufficiently addressing the varying needs of diverse student populations and for lacking clarity.[2, 3] TISA aims to rectify these shortcomings by allocating greater funding to school districts serving larger numbers of students who traditionally require more support, such as those from low-income backgrounds, English Learners (ELs), and students with disabilities.[2] The fundamental principle of TISA is that funding should follow the student, with adjustments made to reflect the actual costs associated with educating every child to their full potential.[4]

Core Goals of the TISA Act

The TISA Act is built upon several key objectives for Tennessee's education system [1]:

• To support and improve third-grade reading proficiency across the state.
• To prepare high school graduates to successfully transition into a postsecondary program or a career of their choice.
• To provide all students, irrespective of their circumstances or location, with the necessary resources to achieve academic success.

How TISA Works: The Mechanics of Student-Based Funding

TISA's student-based model calculates funding for school districts through several key components:

1. The Base Funding Amount

At the heart of TISA, every public school student in Tennessee generates a foundational **base funding amount**.[4, 1] For the 2023-2024 school year, this base amount was set at **$6,860 per student**.[2] This per-pupil allocation forms the starting point for determining a district's overall funding.

2. Weighted Allocations: Tailoring Funds to Specific Student Needs

Recognizing that different students require different levels of support, TISA incorporates "weights" that provide additional funding on top of the base amount for students with specific characteristics or needs.[1, 2] These weights are percentages applied to the base amount, and a student can generate funding from multiple weights if they meet the criteria for more than one category (they are not mutually exclusive).[1, 2]

TISA includes five primary weighted categories [1, 2]:

• Economically Disadvantaged Students: A 25% weight is applied for students from low-income backgrounds.
• Students Living in Areas of Concentrated Poverty: An additional 5% weight for students residing in areas with high concentrations of poverty.
• Students in Sparsely Populated Communities (Sparse Districts): A 5% weight to support students in districts with low population density.
• Students in Smaller Districts: A 5% weight for students attending schools in smaller districts.
• Students with Unique Learning Needs: This category provides weights ranging from 15% to 150%. It encompasses students with disabilities (funded across ten different categories of disability or student need [2]), English Learners (ELs), and students exhibiting characteristics of dyslexia. For English Learners specifically, TISA funds at three different levels: 20%, 50%, and 70% of the per-student base, depending on their proficiency level.[2]

This weighted system is designed to direct more resources to districts serving students who may require more intensive educational services and support.[2]

3. State and Local Contributions

Under TISA, the state is responsible for funding **70% of the combined base and weighted allocations** for each district.[1] The remaining 30% is the local share, which is determined by the school district's "fiscal capacity"—its ability to raise local revenue, typically through property and sales taxes.[4] This mechanism aims to ensure a degree of equity, requiring wealthier districts to contribute a larger local share.

4. Direct Allocations

In addition to the student-based formula, TISA includes **direct allocations**.[1] These are funds provided by the state at 100% for specific statewide programs or educational priorities, such as literacy initiatives, career and technical education programs, or other targeted investments.[4, 1] The State Board of Education is required to review and issue a recommendation (positive, neutral, or negative) for proposed direct allocation amounts before they are finalized.[1]

5. Outcomes-Based Funding

TISA also introduces the potential for **outcomes-based funding**.[4] This allows for additional funding to be awarded to school districts that demonstrate significant improvements in student achievement, such as gains in graduation rates, postsecondary readiness, or proficiency on state assessments like the TCAP. For example, one of the TISA goals is for 70% of an LEA's third-grade students to achieve "on track" or "mastered" on the English Language Arts (ELA) portion of the TCAP tests.[1]

Key Operational Features and Provisions of TISA

Several operational aspects define how TISA funding is administered:

• Funding Based on Prior Year Data: TISA allocations are generally based on student enrollment and demographic data collected for a Local Education Agency (LEA) during the immediately preceding school year.[1]
• Early Graduation Funding: For students who graduate early, their funding is extended to their expected graduation date, ensuring districts do not lose funding for these students prematurely.[1]
• Fast-Growth Stipend: LEAs experiencing growth in their total student-generated allocation (for non-virtual schools) exceeding 1.25% compared to the prior year are eligible for a fast-growth stipend to help manage this increase.[1]
• Infrastructure Stipend: A per-student flat dollar amount is available for LEAs with Average Daily Membership (ADM) growth in non-virtual schools exceeding 2% from the prior year, intended to help with infrastructure needs.[1]
• Hold Harmless Provision (Transition Period): To ensure a smooth transition from the BEP, TISA includes a "hold harmless" provision. If, during the initial years of TISA, a district's allocated TISA funds are less than what it would have received under its BEP baseline, the state provides additional funds to cover a declining percentage of that difference over four years [1]:
  • Year 1 (2023-2024): 100% of the difference
  • Year 2 (2024-2025): 75% of the difference
  • Year 3 (2025-2026): 50% of the difference
  • Year 4 (2026-2027): 25% of the difference

Transparency and TISA

A key goal of TISA is to create a more transparent school funding system than its predecessor, the BEP.[2] The state education department maintains a webpage and an accompanying guide that explains the TISA funding formula in clear, plain language, making it easier for the public, educators, and policymakers to understand how education dollars are allocated.[2]

TISA vs. BEP: A Fundamental Shift

The move to TISA marks a fundamental shift from the BEP's resource-based model, which funded schools based on expected costs for staff and resources and was often criticized for its complexity and lack of focus on individual student needs.[4, 2, 3] TISA, by contrast, is student-based, directly tying funding to students and their specific needs through a system of base amounts and weights, with the stated aims of improving adequacy, equity, and transparency in how Tennessee funds its public schools.[2]

Conclusion: The Evolving Landscape of Tennessee School Funding

The Tennessee Investment in Student Achievement (TISA) Act represents a new era for school funding in the state. By focusing on individual student needs and aiming for greater transparency and equity, TISA seeks to provide a more robust foundation for educational success across Tennessee. The implementation and impact of this formula will continue to be a critical area of focus for students, families, educators, and policymakers.

The Tennessee Firefly is committed to ongoing coverage of TISA's rollout, its effects on school districts, and any future developments in state education funding. For a broader understanding of how school funding works in Tennessee, including historical context and other funding sources, please visit our main pillar page: Understanding Tennessee School Funding.