September 24, 2009
Subject: 2008–09 Near-Final Summary of Finances
TO THE ADMINISTRATOR ADDRESSED:
The “near-final” Summary of Finances (SOF) for the 2008–09 school year and other related reports have been updated and are available at the School Finance website at http://ritter.tea.state.tx.us/school.finance/funding/sofweb7.html. You may use these reports to prepare your district’s annual financial audit. The reports reflect the following important updates and information:
- Average Daily Attendance (ADA) and Full-Time Equivalents (FTEs) – The SOF reflects the updated student attendance data submitted by districts through the Public Education Information Management System (PEIMS) in July for the 2008–09 school year. The near‑final calculation of students in weighted average daily attendance (WADA) can be found on line 9 of the SOF. For districts that receive the Pre-K Early Start Grant, adjustments to the ADA and bilingual ADA related to this program have been subtracted from the refined ADA and bilingual ADA that were derived from the PEIMS attendance data. Therefore, the total refined ADA and bilingual ADA that are indicated in the SOF will not match districts’ PEIMS submissions. The Adjusted ADA Detail Report, available soon,provides the details of this calculation.
- New Instructional Facility Allotment (NIFA) – The NIFA allotment shown on the SOF has not been changed to reflect actual ADA related to this program. The actual NIFA amount earned in 2008–09 will be reflected on the final version of the SOF in April 2010.
- ADA Decline Adjustment – The Texas Education Code (TEC), §42.005, provides school districts that experience declines in ADA from one year to the next with an adjustment to their current-year ADA. The ADA of a district may be adjusted to reflect up to 98 percent of the district’s prior-year ADA, depending on the availability of funding. The 2009 General Appropriations Act provided $11 million for the purpose of ADA adjustments in districts with declining enrollments. The $11 million ADA decline adjustment will be made after declines due to disasters are known and compensated for under the provisions of House Bill 4102, 81st Texas Legislature, 2009.
- Total Tax Collections – The maintenance and operations (M&O) and interest and sinking fund (I&S) tax collections your district reported on the Tax Information Survey in summer 2009 have been used in this SOF. If your district did not complete the survey, then budgeted tax collections for the 2008–09 school year as reported through the PEIMS will continue to be used until audited tax collections are incorporated in the final version of the SOF in April 2010. If your district receives an Instructional Facilities Allotment (IFA) for a lease-purchase agreement, your district’s local share of the IFA has been subtracted from the M&O tax collection amount.
- Transportation Allotment – Your district’s 2008–09 near-final transportation allotment is based on the 2008–09 route services data submitted via the Transportation module of the web-based Foundation School Program (FSP) Payment System.
- Existing Debt Allotment (EDA) – A report entitled EDA State Aid Calculation, available by clicking the "EDA Detail Report" link, reflects the near-final state and local shares of EDA based on the updated ADA and district property values. Settle-up amounts for 2008–09 will be incorporated into the 2009–10 EDA payments, which we expect to make in late October. If your district refinanced eligible debt during the 2008–09 school year, an amendment is required.
- Instructional Facilities Allotment (IFA) – The state and local shares of IFA have been recalculated to reflect updated ADA and district property values. Settle-up amounts for 2008–09 will be incorporated into the 2009–10 IFA fall payments, which we expect to make in late October. If your district has refinanced eligible debt during 2008–09, an amendment is required, and adjustments may be necessary.
- High School Allotment – Your district’s high school allotment is calculated by multiplying your district’s high school (grades 9–12) ADA by $275. Your district’s allotment will be updated with high school ADA from the July 2009 PEIMS submission in the next SOF released. See the Other Programs section of the SOF for your district’s updated allotment amount. This allotment is part of your district’s FSP funds, and it makes up a part of each FSP payment.
- Teacher Salary Allotment – Your district’s teacher salary allotment is calculated by multiplying the district’s total number of eligible teachers, librarians, nurses, and counselors by $2,500 or $1,250, depending on their full-time or part-time status. See the Other Programs section of the SOF for your district’s updated allotment amount. The allotment was updated with 2009–10 average counts submitted via the Staff Salary module of the FSP Payment System. If your district has part-time teachers, your average number of teachers, librarians, nurses, and counselors was overstated by the total number of part-time counts for every month that data were submitted via the FSP Payment System. The correction to this allotment will occur in the next version of the SOF.
- Staff Salary Allotment – Your district’s staff salary allotment is calculated by multiplying the district’s number of eligible staff by $500 or $250, depending on their full-time or part-time status. See the Other Programs section of the SOF for your district’s updated allotment amount. The allotment was updated with 2008–09 average counts submitted via the Staff Salary module of the FSP Payment System. Any necessary corrections to the allotment will be made in the next version of the SOF.
- State Aid Reduction for WADA Sold – If a Chapter 42 district entered into an Option 4 agreement with a Chapter 41 district, the reduction in state aid for selling WADA has been recalculated using the district’s near-final revenue per WADA. An updated report entitled State Aid Reduction for WADA Sold, available by clicking the "WADA Sold Detail Report" link, shows how this latest WADA charge is derived. The number of WADA being sold does not reflect the near-final WADA that the Chapter 41 district must purchase. The number of WADA bought/sold may need to be adjusted depending on the near-final Chapter 41 Cost of Recapture report.
- Homestead Exemption Hold Harmless – An updated allotment is included in this SOF and reflects the near-final homestead exemption hold harmless state aid related to the $15,000 homestead exemption. See the Other Programs section of the SOF for your district’s allotment amount.
- Salary Transition Hold Harmless – See the Other Programs section of the SOF for your district’s updated allotment amount. These funds are related to a $3,000 salary increase for teachers and others subject to the minimum salary schedule that was mandated in 1999. The funds are intended to compensate districts for expenses related to delivering that pay raise that are not covered by increases in state aid that resulted from changes in funding components in 1999. The number of teachers and full-time librarians, nurses, and counselors indicated on the SOF is derived from 2008–09 average counts submitted via the Staff Salary module of the FSP Payment System.
- Additional Aid for School Employee Benefits – These funds are intended to help pay for health care coverage that was mandated in 2001. Any necessary corrections to the allotment will be made on the final version of the SOF in April 2010.
- Additional State Aid for Frozen Levy Reduction – This allotment reflects hold harmless state aid resulting from the passage of House Bill 5 in 2007, which extended the benefits of the M&O tax rate reductions authorized by House Bill 1 in 2006 to the elderly and disabled, whose taxes were already frozen.
- Public Education Grant Allotment – The Public Education Grant allotment is not included in this SOF. It will be incorporated in the final version of the SOF in April 2010.
- Reduction in Additional Aid for Per Pupil Allotment – Districts that do not receive Tier I state aid from the Foundation School Fund are subject to a reduction of the per pupil allotment. The reduction in the per pupil allotment is based on the increase in the Available School Fund per capita rate from $238 to $280 and increases in current-year recapture amounts. This allotment has been updated on the districts' SOFs.
- Revenue Targets – For those districts new to Chapter 41 in 2006–07 or later, the WADA used for calculating the additional state aid for tax reduction (ASATR) revenue targets will incorporate the mid-sized district adjustment authorized in the TEC, §42.104. The application of this adjustment will apply only to the calculations related to the state funding and recapture costs associated with a district’s compressed 2005 tax rate.
- Other Adjustment to Tax Collection – Revenue targets have been adjusted for changes to local option homestead exemptions, tax increment finance (TIF) agreements, and abatements under the Texas Tax Code, Chapter 312, if we are aware of them. If your district has had a change in any of these three taxable value adjustments since 2005, please contact us.
- Chapter 313 Tax Credit Amount – Revenue targets have been adjusted for districts eligible for reimbursement for tax credits under the Texas Tax Code, Chapter 313 (Texas Economic Development Act).
- Chapter 41 Districts Below the $319,500 Equalized Wealth Level – Several allotments have been revised for districts that received notification of their Chapter 41 status in July 2008 based on preliminary estimates of property value and WADA but now have wealth per WADA lower than the $319,500 equalized wealth level based on the PEIMS data and property values used in this SOF. The homestead exemption hold harmless, the salary transition hold harmless, and the additional aid for school employee benefits amounts have been recalculated according to Chapter 42 formulas.
The section of the SOF entitled FSP Allocations and Adjustments shows the amount of your district’s near-final settle-up. If your district has been underpaid, the amount owed the district will be paid in September 2009. If your district has been overpaid, recovery of the amount overpaid will start in September 2009 and will be made by reducing the district’s 2009–10 monthly payments from the Foundation School Fund. The rate of recovery will be based on the same percentage that Foundation School Fund monthly payments are based on in accordance with your district’s 2009–10 payment class. Your district's 2008–09 Foundation School Program Payment Ledger is also available on the School Finance website at http://ritter.tea.state.tx.us/school.finance/funding/sofweb7.html.
If you have any questions about this SOF, please contact a state funding consultant in the State Funding Division at (512) 463-9238.
State Funding Director
For general questions about the SOF:
Leo Lopez – Chapter 42
Al Johnson – Chapter 42
Kim Rife – State compensatory education
Leo Lopez – Chapter 41
For questions about facilities funding:
Lawrence Crockett – IFA
Sam Lester – EDA
Cynthia Hegemier-Boggs – IFA, NIFA
Gary Marek – IFA
Cassie Huggins – NIFA, IFA
For questions about transportation: