The Rhode Island Department of Education provides financial aid to school districts ("Local Education Agencies" - LEAs) through two mechanisms:

- A funding formula called the Primary Aid Formula that is the same for every LEA
- Categorical funds that cover costs beyond those covered by the Primary Aid Formula including:
- High-cost special education
- Career and technical education (CTE)
- Transportation
- English Learners
- Early Childhood
- Regional Bonus (to encourage regionalization)
- Density Aid (provides additional funding if 5% of student population is enrolled in Public Schools of Choice)
- Stabilization (provides additional funds to LEAs experiencing bankruptcy or funding crises)

Each type of Categorical funding has its own criteria for determing need, and LEAs are assessed individually every year to determine need.

Most of the controversy centers around the Primary Aid Formula, specifically the fairness of it.

The Primary Aid Formula is designed to supplement local tax revenue when one or both of two conditions are present:

- The community has elevated costs per student due to poverty.
- The community lacks the tax base or income to adequate the support the schools through property taxes.

- The poverty level indicator %PK6POVERTY is defined as the number of students in grades Pre-K through six eligible for meal subsidies.
- The State Share Ratio for each Community (SSRC) is a composite of property valuation and income used to indicate the community's capacity to generate revenue through property taxes.

The %PK6POVERTY value is computed from the total number of students and the number eligible for lunch subsidy.

Barrington (5.6%) and East Greenwich (9.0%) are the only districts in the state below 10% on this measure.

While %PK6POVERTY is largely self-explanatory, SSRC is more complicated:

The Resident Average Daily Membership (RADM) represents the number of students in the district.

The Equalized Weighted Assessed Valuation (EWAV) is a composite of total assessed property value and median income, and is a measure of the district's capacity to raise revenue through property taxes.

The EWAV is computed by multiplying the total assessed property value by the ratio of the median income in the community to the state median income.

For the statewide number, the median income *is* the statewide median, so the statewide EWAV is just the total assessed property value in the state.

In the formula for the SSRC, the town and state EWAV values get divided by RADM, the number of students. So the denominator is just the average property value per student in the state. The district EWAV divided by the district RADM is just the average property value per student, multiplied by the ratio of the median income in the district to the statewide average.

You can find the computations of the SSRC in the FY2019 State Share Ratio document on the RIDE website.

Aside from the EWAV and RADM values, the rest of the formula for the SSRC is just there to correctly scale the result to a number between 0 and 1 and make it an inverse measure. The greater the community's ability to pay taxes, the lower the SSRC value.

The fact that the SSRC value for Barrington is 22.15% and that for East Greenwich is 14.92% indicates that by this measure, East Greenwich is better able to afford to support its schools through property taxes than Barrington.

This is the reason Barrington receives more state aid per student than East Greenwich.

There is an excellent reference guide for the funding formula on the RIDE website.