TO THE ADMINISTRATOR ADDRESSED:
Re: Existing Debt Allotment
Over the past several weeks, there has been much discussion of the possibility of increasing the 12-cent limit on the Existing Debt Allotment (EDA). Texas Education Code (TEC) §46.034(d) authorizes the commissioner to increase the 12 cent limit if funds are available from appropriations for either Chapter 42 state aid or Chapter 46 allotments. The amount of funds available for fiscal year 2000-01 from settle-up for the 1999-00 school year or from early adjustment for rapid property value growth as described in TEC §42.2522(b) will make it possible to increase the 12-cent limit to 29 cents for the 2000-01 school year.
Under
TEC §46.032(b), school districts must set its debt service tax rate after
considering the state assistance for the EDA.
TEC §46.035 also directs, by reference to §46.009, that a
district must deposit the state assistance into the interest and sinking
fund and must adopt a tax rate that takes the balance created by the
deposit of state aid into account.
A
new printout of the EDA has been generated for each eligible district
using the 29-cent limit. The
printout and revised worksheets/templates that allow for local computation
are available from the TEA web site at www.tea.state.tx.us/school.finance/funding/index.html.
Each district must consider the additional state aid that will
result from this higher limit and adjust the local tax rate for debt
service accordingly. As a
result, it is expected that debt service tax rates will be lower when
compared to the tax rate that would have been needed without the
additional assistance. TEA
will survey affected districts this fall and districts will be expected to
report the actual impact of this additional debt assistance on adopted tax
rates.
This
adjustment should be viewed as a "one-time only" change to the
amount of funding to the district. The
increase in coverage of debt taxes above 12 cents is not a permanent
change. There
is no certainty that funding will be available in future years.
If you have any additional questions, please contact the State Funding Division at (512) 463-9238.
Sincerely,
Jim Nelson
Commissioner of Education
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For further information on this topic, contact the State Funding Division at (512) 463-9238.