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August 16, 2005
TO THE ADMINISTRATOR ADDRESSED:
Subject: 2005-2006 Preliminary Summary
of Finances (BASED ON THE CURRENT LAW)
A preliminary Summary of Finances (SOF)
and other related reports for the 2005-2006
school year have been posted to the TEA
school finance web site, and include important
information noted below:
- 2004 CPTD Value – The property
value being used in the Legislative
Planning Estimate (LPE) and District
Planning Estimate (DPE) columns of the
SOF is the Comptroller's Property Tax
Division (CPTD) value certified to the
Commissioner of Education for tax year
2004 (T2). At this time, it does not
appear that sufficient appropriation
authority exists to adopt T4 values for
state aid purposes.
- Student Counts – Al l student
counts (ADA, FTEs, and enrollment counts)
shown in the LPE and DPE columns of the
SOF are initially based on the March
2005 student projections adopted by the
Legislative Budget Board for 2005-06 .
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 are
adjusted by the Agency when the 2005
Fall PEIMS enrollment data are av ailable
in March 2006 and again in August 2006.
The August 2006 student counts in the
DPE column will be used to recalculate
funding for year-end settle-up, which
is paid in September 2006.
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 – 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.
- “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. Districts are held harmless
if their loss in local revenue resulting
from the additional $10,000 homestead
exemption is not entirely offset by
additional state aid. In such cases,
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.
Districts qualify for salary transition
entitlement funds if the district's cost
to maintain the $3,000 pay raise authorized
in 1999 is not entirely offset by 80
percent of the additional state aid generated
by the funding element increases made
in 1999. 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 used in this calculation
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 preliminary earned
allotment appears on the first page
of the SOF under the “Additional Aid” heading.
The IFA allotment has not yet been
adjusted for 2004-05 settle up purposes.
The EDA 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. 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. 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 2004-05 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 2004-05
is updated. If the district is currently
projected to be overpaid for the 2004-05
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 2004-05 school
year, the Adjustments-to-Date amount
will be zero, since the underpayment
will be paid in a lump sum.
For a district that has a credit balance
because of WADA sold, this settle-up
amount will be adjusted after the district
remits the refund to the state. For 2004-05,
this refund is due on or before August
16, 2005 . Please keep in mind that
the projected settle-up may change as
new data become available.
- Others – This SOF does not
include the New Instructional Facilities
Allotment (NIFA) 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. Beginning
with 2005-06, payments for the Pre-K
Expansion Grant will no longer be issued
through the Summary of Finances. School
districts and open-enrollment charter
schools will be required to use TEA's
online Expenditure Reporting System (ER)
to record expenditures and request payment.
The Pre-K Expansion Grant is administered
by the Division of Formula Funding. Contact
Karyn Gukeisen at 512-463-8525 for more
information.
- 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 available
through our web page, (www.tea.state.tx.us/school.finance).
- Additional Aid from HB 1
Rider 69 of the General Appropriations
Act authorized by the 79 th Texas Legislature,
First Called Session, 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 2004-05 biennium.
- For the “budget balanced” districts ,
the additional aid from HB 1 ($110
per WADA) 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 equalized wealth
level amount.
- 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 posted in
the TEA website attached to the district's
Summary of Finances, showing how the “reduction” amount,
if any, was derived.
- Per Capita Rate – A
rate of $242 multiplied by the prior-year
ADA is used to estimate the per capita
allotment. This estimated rate reflects
anticipated action to provide additional
appropriations for textbooks in fiscal
2006. Depending on the terms of either
new legislation or a budget execution
order, the rate is still subject to change.
- Technology Allotment
The technology
allotment is based on a rate of $27.42
multiplied by the district's 2005-06
Refined ADA, and accounted for in the
Special Revenue Fund 411. The rate is
based on the amount appropriated ($115
million for 2005-06) divided by the projected
statewide average daily attendance.
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 districts. 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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