• 2005 CPTD Value - In accordance with Section 42.253(b) of the Texas Education Code (Rider 3 of the 2005 General Appropriation Act), the Comptroller’s Property Tax Division (CPTD) value being used in the LPE column of this SOF is the greater of (1) the district’s 2004 CPTD value (the “T2” value used in 2005-06 school year) increased by 5.03 percent, or (2) the district’s final 2005 CPTD (“T2” value) recently certified by the Comptroller’s office. In the DPE column, the CPTD value being used is the district’s final 2005 CPTD value (“T2” value).

• Student Counts - All student counts (ADA, FTEs, and enrollment counts) shown in the LPE and DPE columns for the Foundation School Program estimates are based on the March 2005 student projections that were submitted and approved during the Legislative appropriation process. Please note that payments distributed to districts during the year are based on the estimated student counts shown in the LPE column. Student counts in the DPE column will be adjusted by the Agency when the 2007 Fall PEIMS enrollment data are available in March 2007 and again in August 2007 when actual student counts become available. The August 2007 student counts in the DPE column will be used to recalculate funding for year-end settle-up.

School district budgets should be based on the student enrollment and program participation that is expected to actually occur during the year. Districts and open-enrollment charter schools should carefully monitor their state aid payments during the year, which may differ from actual operations at year end, creating an overpayment or underpayment condition that must be recorded properly in the accounting records of the districts and charter schools.

• Tax Collections

a) For the first level of Tier II with GL at $31.95 – The M&O tax collection amount used for Tier II purposes on both the LPE and DPE column was calculated by increasing the 2005 CPTD value shown by 5.00 percent and multiplying that increased value by the district’s 2006-07 compressed rate (2005-06 M&O tax rate derived from the Comptroller’s Self-Report multiplied by 88.67 percent).

b) For the second level of Tier II with GL at $41.21 – For this preliminary SOF, it is assumed that the district will adopt an M&O tax rate that is $0.04 above its compressed rate. When the actual M&O rate is adopted and reported to the Agency, a revised SOF will be generated. The M&O tax collections for the $0.04 on both the LPE and DPE columns were calculated by multiplying the same increased value calculated for the first level by .0004.

These tax collections will be updated when the 2006 local property value (including the frozen levy and tax increment financing amounts) and the 2005-06 and 2006-07 adopted M&O tax rates are reported by districts later this summer.

• Additional State Aid for Tax Reduction and State Aid Reduction for Excess Revenue (are included in the Foundation School Program funds, for payment purposes) - The Additional State Aid for Tax Reduction and State Aid Reduction for Excess Revenue are calculated based on the scenario that produces the greatest amount of revenue per student in weighted average daily attendance (WADA). The scenarios are calculated as follows:

o Scenario 1 (S1) - the district’s 2005-06 total state and local revenue per WADA in accordance with Section 42.2516 (b)(1)(A) of HB 1, which is based on the law prior to the passage of HB 1.
o Scenario 2 (S2) - the district’s 2006-07 total state and local revenue in accordance with Section 42.2516 (b)(1)(B) of HB 1, which is based on the law prior to the passage of HB 1.
o Scenario 3 (S3) - the district’s 2005-06 total state and local revenue in accordance with Section 42.2516 (b)(1)(C) of HB 1, which is based on the law prior to the passage of HB 1 except that it uses the tax rates as prescribed by HB 1.
o Scenario 4 (S4) – the district’s 2006-07 total state and local revenue based on HB 1.

Please see the 2006-07 Hold Harmless Determination report that is a part of the 2006-07 SOF report for details on these calculations. The maximum (MAX) of S1, S2, or S3 is compared to S4. This amount does not include the salary allotment under Section 42.2516(b)(2) or the high school allotment under Section 42.2516(b)(3) of HB 1. These allotments are treated separately on the SOF.

Additional State Aid for Tax Reduction (ASATR) – If the S4 revenue is less than the maximum (MAX) of S1 or S2 or S3, the difference is the Additional State Aid for Tax Reduction (ASATR). See Line 12 on S4.

State Aid Reduction for Excess Revenue (SARER) – If the S4 revenue exceeds the maximum (MAX) of S1 or S2 or S3, the district is subject to the State Aid Reduction for Excess Revenue (SARER). The “excess” revenue will be subtracted from the district’s total state funds (Line 13 on S4).

• “Hold Harmless” – Additional State Aid (under old law) – If the district qualifies for “hold harmless” additional state aid, the amount is shown on page 4 of the SOF under the Additional Aid category. If the district’s loss in local revenue resulting from the additional $10,000 homestead exemption is not entirely offset from additional state aid, the difference is made up with additional “hold harmless” state aid (this report is located below the SOF report posted to the web).

• Salary Transition Entitlement – If the district qualifies for salary transition, the amount is shown on page 4 of the SOF under the “Additional Aid” category. If the district’s cost of the $3,000 raise authorized in 1999 is not entirely offset with 80 percent of the additional state aid resulting from the funding element increases made in 1999, the difference is made up with salary transition (this report is included with the SOF report posted to the web). The number of FTEs for teachers and full-time librarians, nurses, and counselors used in this calculation will be updated when these data become available for 2006-07.

• Existing Debt Allotment (EDA) and Instructional Facilities Allotment (IFA) – If the district qualifies for EDA or IFA, the preliminary earned allotments appear on the first page of the SOF under the “Additional Aid” heading. The IFA allotment has not yet been adjusted for 2005-06 settle up purposes. The agency is in the process of updating the information on EDA eligible debt from the State Information Depository, and the amount of the EDA allocation may change as a result of that update later this summer. Payment reports and instructions for updating debt information can be found on the IFA website http://www.tea.state.tx.us/school.finance/facilities/ifa.html and the EDA website http://www.tea.state.tx.us/school.finance/facilities/eda.html.

• Transportation Allocation – The allocation is based on the district’s 2004-05 transportation allotment as calculated from data submitted on the 2004-05 Route Services Report. This allotment will be updated when the allotments for 2005-06 are determined.

• Projected Settle-up - The preliminary projected 2005-06 settle-up amount is indicated on page 5 of the SOF in the DPE column. This amount is an estimate only, and will be adjusted when PEIMS data for the year-ending 2005-06 is updated. If the district is currently projected to be overpaid for the 2005-06 school year, that projected overpayment (signified by a “credit” balance) is shown as the Adjustments-to-Date amount. If the district is currently projected to be underpaid for the 2005-06 school year, the Adjustments-to-Date amount will be zero, since the underpayment will be paid in a lump sum in September 2006. Please keep in mind that the projected settle-up will change as new data become available.

For a district that has a credit balance because of WADA sold, this settle-up amount is not shown in the SOFs. For 2005-06, this refund is due on or before August 16, 2006.

• Other – This SOF does not include the New Instructional Facilities Allotment (NIFA) funds. The SOF will be updated when these allocations are determined. The 2006-07 Hold Harmless for State Aid Gains related to the public school employee health insurance requirements is used from 2005-06 allocation.

• Additional Aid from HB 1 (78th Legislature, 2003) – In accordance with the Rider 82(c) of the General Appropriations Act, the additional aid from HB 1 ($110 per WADA) for “budget balanced” districts is reduced by the gain in the increase in the Available School Fund. For the Hold Harmless Chapter 41 districts, the additional aid from HB 1 is reduced by the net gain from the Available School Fund and the increase in the recapture.

For those districts that do not receive Tier I state aid from the Foundation School Fund, a report entitled Worksheet for Determining the Reduction in Additional Aid from HB 1 is also included with the district’s SOF posted to the web. This report shows how the “reduction” amount, if any, was derived.

• Per Capita Rate – A rate of $317 multiplied by the prior-year ADA is used to estimate the per capita allotment. This rate is subject to change.

• Technology Allotment – The technology allotment is based on a rate of $30 multiplied by the district’s 2005-06 Refined ADA, and accounted for in the Special Revenue Fund 411. This rate is subject to change.

• Teacher Allotment - This allotment is based on a rate of $2,500 multiplied by the district’s number of classroom teachers, full-time librarians, full-time counselors, and full-time nurses employed by the district and entitled to a minimum salary under Section 21.402 (see page 4 of SOF). The allotment on this preliminary summary is based on the staff data submitted to PEIMS in the 2005-06 fall snapshot. These data will be updated to reflect the 2006-07 staff reported by the district when these data are available.

• High School Allotment: This allotment is based on a rate of $275 multiplied by the number of students in average daily attendance (ADA) in grades nine through 12 in the district (see page 4 of SOF). This preliminary SOF reflects a projection of high school ADA based on the district’s 2005-06 high school enrollment. Districts will have an opportunity to report their 2006-07 high school enrollment to the State Funding Division later this summer.

• Staff Allotment: This allotment is based on a rate of $500 for full-time professional staff FTEs and a rate of $250 for part-time professional staff employed by the district (see page 4 of SOF). Districts will continue to report eligible employees in the same way they reported employees who were eligible to receive supplemental compensation. Eligibility for the wage increase funded by this allotment is the same as the eligibility for the supplemental compensation, except that employees subject to the minimum salary schedule will no longer be eligible. (The $2,500 raise includes $500 to replace the supplemental compensation.)

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