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TEA Correspondence

A Microsoft Word Version of this letter is available for download and PRINTING.

As a result of the veto of the appropriations for the Texas Education Agency for the 2006-2007 state fiscal biennium, the Agency has temporarily withdrawn the 2005-06 school year Summary of Finances and the 2005-06 Minimum Salary Schedule. We anticipate posting new information once the Legislature adopts appropriations and any related statutory changes.

June 13, 2005

TO THE ADMINISTRATOR ADDRESSED:

Subject: 2005-2006 Preliminary Summary of Finances

A preliminary Summary of Finances (SOF) and other related reports for the 2005-2006 school year have been placed on the TEA school finance web site. (http://www.tea.state.tx.us/school.finance/funding/sofweb3.html) Paper copies of these preliminary reports will not be mailed. Please note the following information pertaining to these reports:

  • 2004 CPTD Value – The CPTD value being used in the LPE and DPE columns of the SOF is the district's January 2005 preliminary values for tax year 2004 (T2). These values will be updated in July based on the Comptroller's final certification, and state aid will be recalculated based on any changes in property values.
  • Student Counts – All student counts ( ADA , FTEs, and enrollment counts) used 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 appropriations process. Please note that the student counts in the DPE column will be adjusted by the agency when PEIMS fall enrollment data for 2005-06 becomes available in March 2006. Student counts in the LPE column serves as the basis (along with the estimated CPTD value and tax collections) to determine a district's cash flow during the year; however, school district budgets should be based on the student enrollment and program participation that is expected to actually occur. Each school district or open-enrollment charter school must critically evaluate the state aid shown in the SOF, and budget state revenues only for state aid that will actually be earned under the formulas.
  • Tax Collections – For Tier II purposes, the M&O tax collection amount on both the LPE and DPE columns has been set to the tax collection limit for DTR (found on page 4 of the SOF). Both LPE and DPE limits use actual 2003 CPTD and data from the 2004-05 Budgeted Tax Collections from PEIMS to compute the DTR for Tier 2 purposes. Statute and the appropriations act require that cash be distributed on this tax rate, although the district's actual limit for earning Tier II funding may be different. A report entitled Worksheet for Calculating of Tax Collection Limit for DTR is also available on our web page. When the summer tax collection survey is completed and final 2004 property values are certified by the Comptroller, a new limit will be calculated for the DPE column.
  • “Hold Harmless” - Additional State Aid – 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 with additional state aid, the difference is made up with additional “hold harmless” state aid. A report is available on our web page showing how the “hold harmless” amount, if any, was derived.
  • Salary Transition Entitlement – If the district qualifies for salary transition, the amount is show on page 4 of the SOF under the “Additional Aid” category. If the district's cost of the $3,000 raise 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. A report is available on our web site showing how the “hold harmless” amount, if any, was derived. The number of FTEs for teachers and full-time librarians, nurses, and counselors will be updated when the PEIMS Fall staff data become available.
  • Existing Debt Allotment (EDA) and Instructional Facilities Allotment (IFA) – If the district qualifies for EDA or IFA, the amount of each allotment appears on the first page of the SOF under the “Additional Aid” heading. Note, the allotment shown does not yet include bonds issued on or after September 1, 2003, but does include the estimated FY 05-06 payments on bonds paid on as of August 31, 2003. A report detailing the EDA calculations is available on the TEA school finance web site. Note that the agency is in the process of updating the information used to calculate the allocation for EDA-eligible debt from the State Information Depository, and the amount of this allocation may change as a result of that update later this summer. A report detailing the IFA calculations will be available later this summer. NOTE: State aid payments on IFA or EDA debt that has been refunded will be withheld until all updates have been received. 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 2003-04 transportation allotment as calculated from data submitted on the 2003-04 Route Services Report.
  • Projected Settle-up - The preliminary projected settle-up amount is indicated on page 5 of the SOF in the DPE column. If the district is currently projected to be overpaid for the 2004-05 school year that projected overpayment is shown as the Adjustments-to-Date amount. If the district is currently projected to be underpaid for the 2004-05 school year, the Adjustments-to-Date amount will be zero, since the underpayment will be paid in a lump sum. For districts that have a credit balance due to WADA sold, this settle-up amount will be adjusted after the state received districts' refunds . Please keep in mind that the projected settle-up will change as new data become available.
  • Others – This SOF does not include the New Instructional Facilities Allotment (NIFA) or the Pre-K Expansion Grant Program funds. The SOF will be updated when these allocations are determined. Also, the SOF does not include any amounts that would be paid for the Hold Harmless for State Aid Gains related to the public school employee health insurance requirements.
  • 2005-2006 State Aid Template and Rollback and Notice Worksheet – The 2005-06 SOF Template, the Worksheet to Assist Districts in Calculating Rollback Rate, and Worksheet to Assist Districts in Completing the Notice of Public Meeting to Discuss Budget and Proposed Tax Rate are also av ailable through our web page, (www.tea.state.tx.us/school.finance).
  • CHANGES TO STATE AID FOR THE 2005-2006 SCHOOL YEAR:
    Rider 69 of the General Appropriations Act authorized by the 79 th Texas Legislature provides for the maintenance of revenue created by Rider 82 (c) of the General Appropriations Act, 2003, which delivered $110 per weighted student during the current biennium.

    • For districts that receive Tier II funds, the guaranteed yield per weighted student is increased from $27.14 to $29.12 for FY 2006. If the state aid produced by the new guaranteed yield amount does not generate revenue per student equal to the amount of revenue that would be generated by providing $110 per weighted student, additional aid will be provided in order to achieve the previous revenue levels.
    • For districts that do not receive Tier II aid, those districts are entitled to receive an allocation to maintain funding levels provided by the $110 per WADA allocation. The gain from this revenue is offset by the increases in the per capita rate for the Available School Fund created by the adoption of the constitutional amendments approved by voters in September 2003.

A report entitled “ Worksheet for Determining Hold Harmless for $110 per WADA Versus the Gain in Tier II Aid Based on the Change in GYL from $27.14 to $29.12” is also posted on the TEA website as an attachment to the district's SOF showing how the “reduction” amount, if any, was derived.

Per Capita Rate – An estimated rate of $315 multiplied by the prior-year ADA is used to estimate the per capita allotment. This rate is subject to change.

As always, school districts are strongly advised to project state aid based on the best av ailable information. Each district should complete the 2005-2006 state aid template or an equivalent state aid estimation process. The greatest value of the SOF is in explaining the basis of cash distributions to district. Estimation of state aid earned can be significantly impacted by factors not known to State Funding. If you h av e any questions concerning these reports, please contact State Funding at (512) 463-9238.

Sincerely,

Robert N. Jocius, Senior Director
Division of State Funding

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