| Funding Implications |
August 9, 2001
TO THE ADMINISTRATOR ADDRESSED:
SUBJECT: EDA and IFA Local Share Requirements
The 77th Legislative Session enacted a provision that allows the use of prior-year excess M&O and I&S tax collections for purposes of meeting the district’s local share requirements for the Existing Debt Allotment (EDA) and Instructional Facilities Allotment (IFA) programs (see HB 2879, sections 6 and 8, to be codified as Texas Education Code Sections 46.003(d) and 46.032(c)). Excess taxes are defined by the statute to be those taxes that exceed the local share requirements in the year of collection of either Tier II in the case of M&O taxes or the IFA and EDA in the case of I&S taxes.
In meeting the EDA and IFA local share requirements for the 2001-02 school year, districts may apply excess M&O and I&S tax collections from the 1999-00 and 2000-01 school years. Each district’s excess M&O and I&S tax collections for these two years have been computed and an Excel spreadsheet with the results has been posted to the Division of State Funding web page and can be found at the following address: ( www.tea.state.tx.us/school.finance/index.html#excoll ).
For the 1999-00 school year, excess M&O taxes were determined by comparing the district’s audited M&O tax collections to the district’s Tax Collection Limit for DTR that appears on page four of the district’s 1999-00 final Summary of Finances. Excess I&S taxes were determined comparing the district’s audited I&S tax collections to the district’s 1999-00 EDA and/or IFA local shares.
For the 2000-01 school year, excess M&O taxes were determined by comparing the district’s M&O tax collections as reported on the Tax Collection Certification survey to the district’s Tax Collection Limit for DTR that appears on page four of the district’s latest 2000-01 Summary of Finances. Excess I&S taxes were determined comparing the district’s I&S tax collections as reported on the Tax Collection Certification survey to the district’s latest 2000-01 EDA and/or IFA local shares. As the data being used are estimates at this time, the amount of 2000-01 excess M&O and I&S taxes available for meeting the district’s 2001-02 EDA and/or IFA local share requirements are subject to change.
If the district anticipates using any excess M&O or I&S tax collections available for meeting its 2001-02 EDA and/or IFA local share requirements, the district must complete the form that will be available at the web address above on August 13, 2001 and submit it to the Division of State Funding indicating the amount of the excess the district plans to use. The form should be completed and submitted prior to setting a tax rate to assure that agency computations agree with those of the district. The excess amount indicated plus the district’s 2001-02 I&S tax collections will be used in determining whether the district met its 2001-02 local share requirements.
The use of excess M&O or I&S tax collections in 2001-02 will not impact future years. However, each district should be aware of the possible implications of using excess M&O and/or I&S tax collections for purposes of meeting its EDA local share requirement in 2002-03. Because the EDA limit in 2003-04 and 2004-05 will be based on the district’s I&S tax collections in 2002-03, a district that uses excess M&O and/or I&S tax collections in 2002-03 will have a lower EDA limit, and thus a lower EDA state share, in 2003-04 and 2004-05 than it would otherwise have by collecting sufficient I&S taxes in 2002-03 to meet its entire EDA local share requirement.
If you have any questions concerning this matter, please contact the State Funding at 512-463-9238.
Sincerely,
Joe Wisnoski, Managing Director
School Finance & Fiscal Analysis
For further information on this topic, contact The Division of State Funding at 512-463-9238.