October 16, 2007
TO THE ADMINISTRATOR ADDRESSED:
Subject: 2006–07 “Near-Final” Summary of Finances
The “near-final” Summary of Finances (SOF) for the 2006–07 school year and other related reports have been updated and posted to the School Finance Web site. The reports reflect the following important updates and information:
- ADA and FTEs – The SOF reflects the updated student attendance data submitted by districts through the Public Education Information Management System (PEIMS) in July for the 2006–07 school year. The near‑final calculation of students in weighted average daily attendance (WADA) can be found on page 4 of the SOF. For districts that receive the Pre-K Expansion 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. A printout entitled Analysis of Pre-K Grant ADA and Bilingual Pre-K Grant ADA for School Year 2006–07 is attached to the SOF.
- New Instructional Facility Allotment (NIFA) – The NIFA allotment shown on page 1 of the SOF has not been changed to reflect actual ADA related to this program. The actual NIFA amount earned in 2006–07 will not be reflected on the SOF until the final version is posted in April 2008.
- ADA Decline Adjustment – Section 42.005 of the Texas Education Code states that school districts that experience declines in ADA from one year to the next may be eligible to have 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 2005 General Appropriations Act provided $11 million for the purpose of ADA adjustments in districts with declining enrollments. This level of funding will allow districts with declining enrollments to be funded at 96.15 percent of their prior-year ADA. A printout entitled Analysis of Pre-K Grant ADA and ADA for Declining Enrollment is attached to the SOF.
- Total Tax Collections – The M&O tax collections your district reported on the Tax Collection Survey in June 2007 have been used on this SOF. If your district receives an Instructional Facilities Allotment (IFA) for a lease-purchase agreement, your district’s local share of the IFA allotment has been subtracted from the M&O tax collection amount.
- Transportation Allotment – A district’s 2006–07 transportation allotment is calculated from the data submitted on the 2006–07 Route Services Report.
- Existing Debt Allotment – A report entitled Calculation of Existing Debt Allotment indicates that the “near- final” state share of the Existing Debt Allotment has not yet been recalculated to reflect the updated ADA and CPTD values. This allocation is likely to change for districts that refunded EDA eligible bonds during the 2006–07 school year. A preliminary review of bond activity indicates that eligible debt amounts are likely to change for most districts that refunded EDA eligible bonds when the information on eligible debt is updated in November.
- Instructional Facilities Allotment – The state and local shares of Instructional Facilities Allotments (IFA) have not yet been recalculated to reflect updated ADA and CPTD values. Settle-up amounts for 2006–07 will be incorporated into the 2007–08 IFA fall payments, which we expect to process in late October. If your district has refinanced eligible debt during 2006–07, 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 has been updated with high school ADA from the July 2007 PEIMS submission. See page 1 of the SOF for your district’s 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 eligible teachers, librarians, nurses, and counselors by $2,500 or $1,250, depending on their full-time or part-time status. The allotment was updated with 2006–07 average counts submitted via the Web-based Foundation School Program (FSP) Application’s Staff Salary Module. If any corrections are necessary, the allotment will be updated at the 2006–07 final settle-up in the spring of 2008.
- Staff Allotment – Your district’s staff allotment is calculated by multiplying the district’s eligible staff by $500 or $250, depending on their full-time or part-time status. The allotment was updated with 2006–07 average counts submitted via the Web-based Foundation School Program (FSP) Application’s Staff Salary Module. If any corrections are necessary, the allotment will be updated at the 2006–07 final settle-up in the spring of 2008.
- 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 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. A “near-final” Cost of Options report will be sent to Chapter 41 districts in November 2007. At that time, the number of WADA bought/sold may need to be adjusted.
- Additional Hold Harmless State Aid – An updated report entitled Calculation of Hold Harmless State Aid is included in this SOF and indicates the “near-final” hold harmless state aid that results from the $15,000 homestead exemption.
- Salary Transition – An updated report entitled Calculation of Salary Transition Entitlement is included. 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 page 1 of the SOF is derived from 2006–07 average counts submitted via the Web-based Foundation School Program (FSP) Application’s Staff Salary Module.
- Additional Aid for School Employee Benefits – These funds are intended to help pay for health care coverage that was mandated in 2001. The final allocation will be determined when the “2006–07 Covered TRS Member” data become available. The updated information will be incorporated at the final settle-up in the spring of 2008.
- Public Education Grant Allotment – The Public Education Grant allotment on page 1 is not included in this SOF. It will be updated when the final SOF is posted in April 2008.
- Reduction in Additional Aid from HB 1 (Per-Pupil Allotment) – For any district that does 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 attached to the district’s SOF. This report shows how the “reduction” amount, if any, was derived. The reduction in the per-pupil allotment is based on the increase in the Available School Fund per capita rate from $352 to $394 and increases in current-year recapture amounts.
- Revenue Targets – For those districts new to Chapter 41 in 2006–07, the WADA used for calculating the Additional State Aid for Tax Reduction (ASATR) revenue targets will incorporate the mid-sized district adjustment authorized in Section 42.104, Education Code. 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. At this time, this adjustment has not been incorporated into the calculations. We hope to have this adjustment reflected in the next version of the SOF, which is currently scheduled for publication in November.
- Chapter 41 Districts below the $319,500 Equalized Wealth Level – For those districts with wealth per WADA lower than the $319,500 equalized wealth level as determined by the PEIMS data and property values used on this report, the Hold Harmless State Aid, the Salary Transition Entitlement, and the Additional Aid for School Employee Benefits are calculated according to Chapter 42 formulas.
Page 5 of the SOF shows the amount of each district’s “near-final” settle-up. If the district has been underpaid, the amount owed the district will be paid in November 2007. If the district has been overpaid, recovery of the amount overpaid will start in November 2007 and will be made by reducing the district’s 2007–08 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 the district’s 2007–08 payment class. Districts can review their 2006–07 Foundation School Program Payment Ledgers, which are also available on the School Finance Web site.
The State Funding Summary of Finances and related reports Web page is located at
http://www.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 Division of State Funding at (512) 463-9238.
Sincerely,
Lisa Dawn-Fisher, Ph.D.
Director of School Finance
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