A revised preliminary Summary of Finances (SOF) and other related reports for the 2006-2007 school year have been updated on the TEA school finance web site. Please note the following information pertaining to these reports:
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 multiplying the district’s yield per penny (Total M & O Tax Collected divided by 06-07 adopted rate reported on the Tax Data Screen) by the district’s 2006-07 compressed rate (2005-06 M&O tax rate times 88.67 percent).
b) For the second level of Tier II with GL at $41.21 – For a district that adopted an M&O tax rate above its compressed rate (limited to $.04 above the compressed rate). The M&O tax collections for this level on both the LPE and DPE columns were calculated by multiplying the same yield per penny as calculated above by the number of pennies the district adopted above its compressed rate, limited to four pennies.
c) For the third level of Tier II with GL at $31.95 – For a district that had a successful rollback election and adopted an M&O tax rate beyond its compressed rate plus $.04. The M&O tax collections for this rate on both the LPE and DPE columns were calculated by multiplying the same yield per penny by the number of pennies above the district’s rate in (b).
These tax collections will be updated again when the district’s budgeted tax collections become available at the end of March 07.
Additional State Aid for Tax Reduction; State Aid Reduction for Excess Revenue; Penalty for Setting Tax Rate Below Compressed Rate - The Additional State Aid for Tax Reduction, State Aid Reduction for Excess Revenue, and Penalty for Setting Tax rate Below Compressed Rate are recalculated using the data reported on the district’s Tax Data Screen. Using this data, the following are determined: (1) the district’s Near Final data for 2005-06 total state and local revenue (S1) in accordance with Section 42.2516 (b)(1)(A) of HB 1; (2) the district’s 2006-07 total state and local revenue (S2) in accordance with Section 42.2516 (b)(1)(B) of HB 1; and (3) the district’s 2006-07 total state and local revenue (S3) in accordance with Section 42.2516 (b)(1)(c) of HB 1 (please see the 2006-07 Additional State Aid for Tax Reduction per T. E. C. Section 42.2516 report located below the 2006-07 SOF report). The maximum (MAX) of these three scenarios (S1, S2, or S3) plus the Salary Allotment under Section 42.2516(b)(2) and the High School Allotment under Section 42.2516(b)(3) of HB 1 establish a revenue target, which is then compared to the district’s 2006-07 total state and local revenue (S4) under HB 1.
Additional State Aid for Tax Reduction (ASATR): If the S4 revenue is less than the revenue target, the difference is the ASATR, and the ASATR is added to the district’s total Foundation School Program funds.
State Aid Reduction for Excess Revenue (SARER): If the S4 revenue exceeds the revenue target, the district is subjected to the SARER, and the amount of the excess is subtracted from the district’s total Foundation School Program funds.
Penalty for Tax Rate Below Compressed Rate (PTR): If the district adopted an M&O tax rate
below its compressed rate, the ASATR, if any, is reduced proportional to the amount by which the adopted rate is less than the compressed rate.
“Hold Harmless” Additional State Aid, Salary Transition Entitlement, Existing Debt Allotment (EDA), Instructional Facilities Allotment (IFA), Transportation Allotment, and the New Instructional Facilities Allotment (NIFA): These revised allocations are also updated on this SOF.
Additional Aid from HB 1 (78 Legislative session) - In accordance with the Rider 82(c) of the General Appropriations Act, the additional aid from HB 1, 78th Legislative Session (the $110 per WADA allotment) for “budget balanced” districts is reduced by the gain in the Available School Fund. For Chapter 41 Hold Harmless districts, the $110 per WADA allotment 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 located below the district’s SOF posted to the web, showing how the “reduction” amount, if any, was derived.
Per Capita Rate – A rate of $385 multiplied by the prior-year ADA is used to estimate the per capita allotment in this SOF. This rate is subject to change.
Technology Allotment - The technology allotment is based on a rate of $26.904 multiplied by the district’s 2006-07 Refined ADA, and accounted for in the Special Revenue Fund 411.
High School Allotment: This allotment is based on a rate of $275 multiplied by the district’s ADA in grades 9 thru 12 (this ADA is still estimated based on the number of students in average daily attendance in grades 9 thru 12 reported on the district’s Tax Data Screen).
As always, school districts are strongly advised to project state aid based on the best available information. Each district should complete the 2006-2007 state aid template or an equivalent state aid estimation tool. The greatest value of the SOF is in explaining the basis of cash distributions to districts. Estimation of state aid earned can be significantly impacted by factors not known to State Funding. If you have any questions concerning these reports, please contact Leonardo Lopez at (512) 463-9238.
