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TEA Correspondence

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


September 1, 2005


Subject: 2004-05 “Near Final” Summary of Finances

The “Near Final” Summary of Finances (SOF) for the 2004-05 school year and other related reports have been updated and posted to the school finance website, and includes the following important information:

ADA and FTEs - The SOF reflects the updated July 2005 student attendance data submitted by districts through PEIMS for the 2004-05 school year. For Chapter 41 districts, the “near final” Chapter 42 WADA is found on page 4 of the SOF. For districts awarded the Pre-K Expansion Grant, the ADA and Bilingual ADA related to this program have been subtracted from the refined ADA and Bilingual ADA that was derived from the PEIMS attendance data. Therefore, the Total Refined ADA and Bilingual ADA that is 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 2004-05 is included in the SOF.

The New Instructional Facilities Allotment (NIFA) shown on page 1 of 5 has not been changed to reflect actual ADA related to this program, and the actual amount earned through the NIFA will not be determined for the 2004-05 school year until the final SOF is posted in March 2006.

ADA Decline Adjustment – H. B. 2879, 77 Regular Legislative Session, contains a provision that permits the use of up to 98 percent of a district’s actual 2003-04 ADA for funding in 2004-05 if the district’s 2004-05 ADA was at least two percent less than it was in 2003-04. Based on the $11 million appropriation available and the final ADA from PEIMS, a district’s adjusted 2004-05 ADA has been computed using 96.56 percent instead of 98 percent. A printout entitled Analysis of Pre-K Grant ADA and for ADA Declining is included in the SOF.

Total Tax Collections - For Tier II purposes, the M&O tax collections that were reported by a district on the Tax Collection Survey in June 2005 have been used to calculate the district’s actual tax collection limit for DTR. If a district was awarded an Instructional Facilities Allotment (IFA) for a lease-purchase agreement, the district’s share of the IFA allotment has been subtracted from the M&O tax collection amount.

Tier II Tax Collection Limit - A printout entitled Worksheet for Calculation of Tax Collection Limit for DTR is included in the SOF, and details the calculations involved in determining a district’s actual Tax Collection Limit for DTR, for Tier II purposes.

Transportation Allocation – A district’s 2004-05 transportation allotment is calculated from the data submitted on the 2004-05 Route Services Report.

Existing Debt Allotment - A report entitled Calculation of Existing Debt Allotment that indicates the “near final” state share of the Existing Debt Allotment has been recalculated to reflect the updated ADA and CPTD values. However, this allocation is likely to change for districts that refunded EDA eligible bonds during the 2004-05 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 updated information is received from the State Information Depository early this month.

Property Value Adjustments - No funds are available to cover the cost of recognizing property value declines between the tax years 2002 and 2003 that exceed four percent; therefore, no adjustment for declining property values has been made to this SOF. For districts that pay tuition to another school district
for students whose grades are not taught by that district, the SOF reflects an adjustment to the district’s CPTD value for the tuition cost.

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 to Partner Districts shows how this latest WADA charge is derived. The number of WADA being sold does not reflect the “near final” that the Chapter 41 district must purchase. A “near final” Cost of Options report will be sent to Chapter 41 districts in October 2005, and 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 additional $10,000 homestead exemption.

Salary Transition – An updated report entitled Calculation of Salary Transition Entitlement is included, and indicates the “near final” entitlement, if any, that compensates the district for the cost of the $3,000 salary increase that was not covered by 80 percent of the increase in state aid that resulted from the Tier I and Tier II funding changes in 1999. The number of FTEs of teachers and full-time librarians, nurses, and counselors indicated on page 1 of the SOF is derived from data reported in the Fall PEIMS submission.

Additional Aid for School Employee Benefits – An updated report entitled Additional Aid for School Employee Benefits is included, and is reflected on page 4 of the SOF. The final allocation will be determined and settle-up will be made in the future when the “2004-05 Covered TRS Member” data becomes available.

Pre-K Grant and Public Education Grant Allotment - The Pre-K Expansion Grant on page 4 of 5 and the Public Education Grant allocation on page 1 of 5 are included in this SOF. The PK grant amount reflects the net of the amount earned by the district during 2004-05 and any adjustments for prior years.

Reduction in Additional Aid from HB 1 - In accordance with Rider 82(c) of the Appropriations Act, 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 of its gain from the Available School Fund and its increase in recapture 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 on the TEA school finance website, and attached to the district’s SOF, showing how the “reduction” amount, if any, was derived.

For Chapter 41 districts below the $305,000 equalized wealth level as determined by the final PEIMS and final 2003 CPTD values, 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 September 2005. If the district has been overpaid, recovery of the amount overpaid will start in September 2005 and will be made by reducing the district’s 2005-2006 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 made in accordance with the district’s 2005-2006 payment class. Districts can review their 2004-05 Foundation School Program Payment Ledgers, which are also available on the school finance website.

State Funding Summary of Finances and related reports web page is located at:

If you have any questions about this SOF, please contact the Division of State Funding at (512) 463-9238.


Robert N Jocius, Senior Director
Division of State Funding


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