The New TISA Funding Formula Explained

Tennessee’s school funding model has shifted in a meaningful way. With the move from BEP to the Tennessee Investment in Student Achievement (TISA), districts are now operating under a formula that is more student-centered, more flexible, and more closely tied to outcomes.

For K-12 educators and school and district leaders, this goes beyond budgeting. It influences how student needs are identified, how support is planned, and how instructional priorities align with funding.

TISA is not just a change in how schools are funded. It is a shift in how funding connects to student outcomes.

From BEP to TISA: Why the Change?

For years, Tennessee relied on the Basic Education Program (BEP) to fund schools. While it served as the state’s primary funding system for decades, it also presented several ongoing challenges:

• It was complex and difficult to fully understand
• Funding was tied to resource “buckets” rather than individual students
• It did not fully reflect key priorities like early literacy and college and career readiness
• Concerns around underfunding led to legal challenges and increased scrutiny

TISA was introduced to address these gaps by shifting to a student-centered funding model that aligns dollars more closely to individual student needs and outcomes.

According to the Tennessee Department of Education, TISA is designed to help ensure students read proficiently by third grade, are prepared for postsecondary success, and receive the resources needed to support their learning.

The Big Shift: From Programs to Pupils

The most important thing to understand about TISA is this: funding follows students more directly than it did under BEP.

Under TISA, districts generate funding based on Average Daily Membership (ADM), along with additional funding tied to student characteristics and outcomes. ADM is a foundational part of the formula and reflects student enrollment and schedules across multiple reporting periods throughout the year, not just a simple headcount.

This shift brings several important changes for districts:

• Student enrollment patterns have a greater impact on funding
• Accurate student classification data is more critical than before
• Funding is tied less to preset categories and more to the students a district serves
• Flexibility increases, along with expectations for accountability

In practice, districts have more discretion in how funds are used. At the same time, they need strong systems in place to identify student needs, monitor progress, and respond effectively throughout the year.

The Four Parts of the TISA Formula

TISA is made up of four core components: base funding, weighted funding, direct funding, and outcomes funding. Together, these determine how much funding a district generates.

1. Base Funding

Every public school student generates a flat base amount.

• 2025–26 base funding: $7,295 per ADM
• Up from $7,075 in 2024–25, an increase of about 3 percent

Base funding is designed to cover the core components of a K-12 education, including staffing, instruction, and day-to-day operations.

It is also important to note that TISA relies on prior-year ADM for many calculations. That means enrollment trends and accurate reporting do not just impact current funding. They influence future allocations as well.

2. Weighted Funding

Weighted funding adds additional dollars based on student characteristics and needs. These weights are cumulative, meaning a single student can generate funding across multiple categories.

Key weights for 2025–26 include:

• Economically disadvantaged: 25%
• Concentrated poverty: 5%
• Small district: 5%
• Sparse district: 5%
• Unique learning needs: 15% to 150%, depending on service level

At the current base amount, this translates to:

• Economically disadvantaged students generate an additional $1,823.75
• Concentrated poverty adds $364.75 per student
• Students with unique learning needs may generate significantly more depending on classification

This structure reflects a central goal of TISA: funding should account for the varying levels of support students need.

It also increases the importance of accurate student identification. Eligibility for these weights is tied to specific classifications and service timelines within district data systems, which directly impact funding.

3. Direct Funding

Direct funding provides state-funded support for key priority areas.

For 2025–26, this includes:

• K-3 literacy: $500 per student
• 4th grade supports: $500 per qualifying student
• Career and technical education (CTE)
• ACT testing: $43 per test
• Charter school funding: $500.47 per student

Two areas are especially important for many districts:

• K-3 literacy funding reinforces the focus on early reading success
• 4th grade support funding targets students who were not proficient in English language arts on TCAP

These funds are fully state-funded, with no local match required. Districts have flexibility in how they use them, but the intent is clear: strengthen literacy outcomes and provide targeted support where it is most needed.

4. Outcomes Funding

Outcomes funding represents one of the most significant changes under TISA. Districts can earn additional funding based on student performance benchmarks. These benchmarks vary by grade band and include measures such as proficiency and growth.

For the 2025–26 school year, the statewide outcomes funding pool is $80 million. Student performance can generate up to 20% of the base amount in additional funding depending on performance and student classification.

The key takeaway is straightforward. Student performance now plays a direct role in funding. Outcomes are not just tied to accountability. They also influence future resources available to districts.

What About Local Matching Funds?

Not every part of TISA is funded the same way, and that distinction is important for district planning.

Base funding and weighted funding include both state and local dollars. In general, the state covers about 70% of these funds, while local governments contribute the remaining 30%, based on each area’s fiscal capacity. This reinforces that TISA is still a shared funding model between the state and local communities.

Direct funding and outcomes funding work differently. These components are fully state-funded, with no required local match.

For districts, this creates a clear difference in how funds can be used and planned for:

• Base and weighted funding require local contribution
• Direct and outcomes funding do not

Understanding this structure helps districts make more informed decisions. While TISA provides greater flexibility overall, each funding stream comes with its own considerations around sustainability and local responsibility.

Does TISA Mean More or Less Funding Overall?

The short answer is more overall, but with less predictability than before.

TISA was introduced alongside a significant increase in statewide education funding. According to the Tennessee Department of Education, the formula includes more than $9 billion in total education funding, along with an additional $1 billion in recurring annual investment since the 2023–24 school year.

At the same time, funding at the district level can vary more from year to year. That is because:

• Funding follows students more directly
• Enrollment changes can impact total funding
• Student characteristics and weights influence allocations
• Outcomes funding introduces a performance-based component
• Transition supports from BEP to TISA are temporary

There is also a built-in safeguard during the transition period – year over year district funding declines are capped to ensure these changes don’t cause undue friction between school years.

So while TISA has increased overall investment, it has also changed how funding is distributed. Districts may see more funding opportunities, but those dollars are now more closely tied to student population, student needs, and academic outcomes.

What TISA Means for Districts Day to Day

TISA is straightforward in theory. In practice, it changes how districts operate throughout the year.

Accurate Student Data Becomes More Important

Because weighted funding depends on student classifications, districts need reliable processes for:

• Identifying economically disadvantaged students
• Tracking students with unique learning needs
• Maintaining accurate enrollment and scheduling data
• Regularly reviewing student information systems

Enrollment and Mobility Matter More

TISA is driven by Average Daily Membership across multiple reporting periods, which means student mobility plays a role in funding.

• Funding is calculated across multiple reporting periods, not a single count
• Mid-period student transfers split funding between districts
• Real-time data accuracy becomes more important than static reporting

Literacy Planning Has Direct Funding Implications

TISA places a strong emphasis on early literacy, supported by dedicated funding streams.

• K-3 literacy funding is allocated per student
• Rising 4th grade students who were not proficient on TCAP generate additional support
• Funds can be used for tutoring, staffing, materials, or intervention

Outcomes Funding Increases the Need for Ongoing Monitoring

Because funding is tied in part to student performance, districts need visibility into progress throughout the year.

• Identify students on track for TCAP proficiency
• Monitor students close to moving up a performance level
• Analyze which standards need additional support
• Evaluate which interventions are driving improvement

How Schools and Districts Can Prepare

A funding formula alone does not improve outcomes. What matters is how districts respond to it. For many schools, preparation under TISA includes:

• Building strong processes for student identification and data validation
• Using Tennessee Academic Standards-aligned assessments and practice throughout the year
• Monitoring progress frequently so instructional decisions can be made before TCAP, not after
• Identifying students who are close to proficiency or close to moving up a performance level
• Implementing intervention early, especially in literacy and during key grade transitions

This becomes especially important when considering how direct funding and outcomes funding work together. For example, a 4th grade student who struggled on 3rd grade TCAP may generate direct funding for additional support. If that support helps the student improve performance, the district may also benefit from outcomes funding tied to that growth.

Targeted intervention supports both student progress and long-term funding opportunities 

Where the Right Instructional Support Fits In

TISA increases the importance of tools and strategies that help districts turn data into action.

Districts need ways to:

• Prepare students for TCAP using standards aligned content
• Identify unfinished learning early
• Assign targeted remediation based on specific skill gaps
• Monitor progress consistently throughout the year
• Support students who need intervention across grade levels

This is why many districts are taking a closer look at their assessment, reporting, and intervention systems. When funding is tied to student needs and outcomes, the ability to respond with clarity and precision becomes more important.

Progress Learning supports this work by providing Tennessee Academic Standards-aligned assessments, targeted remediation, adaptive intervention through Liftoff, and reporting that helps districts monitor progress and identify where support is needed most. Research studies and district implementations have shown positive impacts on student achievement and highlight the role of consistent practice, intervention, and progress monitoring in improving outcomes.

How to Think About TISA Going Forward

TISA is more than a new formula. It introduces a different way of thinking about how schools are funded in Tennessee.

The shift from funding systems to funding students creates more flexibility, but it also places greater importance on:

• Accurate and timely student data
• Intentional planning around literacy and intervention
• Ongoing progress monitoring
• Measurable academic growth

For district leaders, the conversation is shifting. It is no longer just about how much funding is available, but how effectively it is being generated and used.

Key questions to consider:

• Are we identifying students accurately?
• Are we using literacy and intervention funding strategically?
• Are we monitoring progress closely enough to adjust instruction in time?
• Are we building the kind of academic growth that supports both students and long-term funding stability?

TISA brings these questions into sharper focus and makes them part of both academic and financial planning.

See It in Action

If your district is looking for ways to better connect data, instruction, and outcomes under TISA, it may be helpful to see what that looks like in practice. Request a demo to explore how Progress Learning supports Tennessee Academic Standards-aligned assessment, targeted remediation, and progress monitoring throughout the year.