2014–2015 Preliminary Summary of Finances

Word Version

June 12, 2014


Subject: 2014–2015 Preliminary Summary of Finances

TO THE ADMINISTRATOR ADDRESSED:

A preliminary Summary of Finances (SOF) report for the 2014–2015 school year is available at the Texas Education Agency (TEA) School District State Aid Reports web page. This letter explains the changes to funding formulas authorized with the passage of Senate Bill 1 and House Bill 1025, 83rd Texas Legislature, 2013, and provides information on the data we used in this SOF.

Formula elements that have been revised include:

•    an increased basic allotment (from $4,950 in 2013–2014 to $5,040 in 2014–2015),
•    an increased equalized wealth level in Tier I (from $495,500 in 2013–2014 to $504,000 in 2014–2015),
•    an increased guaranteed yield for the first level of Tier II from $59.97 to $61.86, and
a new allotment for rider 71 of $67.41 per average daily attendance (ADA) for increased TRS costs (this can be found on line 6 of the other programs detail report).

The following paragraphs provide information about the data we used in the 2014–2015 SOF report, including planned updates.

•        LPE vs. DPE – The SOF report contains two columns. The legislative payment estimate is in the column labeled “LPE.” This column includes the property values and student counts that the legislature used during the appropriations process, and these figures form the basis of the Foundation School Program (FSP) payments your school district receives throughout the state fiscal year. The other column is the district planning estimate, which is labeled "DPE." This column is updated periodically throughout the fiscal year as data are reported to us. This column is intended to provide your district with a more accurate indication of its actual FSP earnings for the fiscal year. After the close of the fiscal year, the DPE column will be updated to reflect actual data, and we will determine final earnings for the fiscal year. There will be a “settle-up” process to correct any over- or underpayments that occurred during the fiscal year. We urge your district to monitor the differences between its FSP payments and actual earnings by using the state aid template available from the Region XIII Education Service Center. A link to this state aid template and other worksheets is provided on the TEA FSP web page.

Charter Schools: Because charter school attendance is less stable than school district attendance, charter school attendance information is updated in both the LPE and DPE columns of the SOF report throughout the school year. These updates are based on information submitted through the FSP System. Your charter school's current-year FSP payments are adjusted accordingly throughout the year.

•        Student Counts – All student counts (ADA, full-time equivalents [FTEs], and enrollment counts) shown in the LPE and DPE columns are based on the March 2013 student projections that were submitted and approved during the appropriations process. Please note that the payments made to your school district during the year are based on the estimated student counts shown in the LPE column. We adjust the student counts in the DPE column when the fall 2014 Public Education Information Management System (PEIMS) enrollment data become available in March 2015. These are adjusted again in September 2015. We will use the September 2015 student counts in the DPE column to recalculate funding for year-end settle-up. Your district's budget should be based on the student enrollment and program participation that are expected to actually occur during the year. Your district should carefully monitor its state aid payments during the year, which may differ from actual earnings at year end, creating an overpayment or underpayment.

Charter Schools: Because charter school attendance is less stable than school district attendance, charter school attendance information is updated in both the LPE and DPE columns of the SOF report throughout the school year. These updates are based on information submitted through the FSP System. Your charter school's current-year FSP payments are adjusted accordingly throughout the year.

•        2013 State-Certified Property Value – The state-certified property value used in the LPE column of this SOF is the greater of the preliminary 2013 property value assigned by the Texas Comptroller’s Property Tax Assistance Division (PTAD) or the final 2012 property PTAD value inflated by 4.03 percent. We will update the SOF later this summer with the greater of the final 2013 value or the final 2012 value inflated by 4.03 percent. Final 2013 values will be used for all districts in September 2015 for Near Final Settle-Up.

•        Estimated M&O Tax Collections
•        School Districts: To estimate the maintenance and operations (M&O) tax collection amounts that appear in both the LPE and DPE columns, we used the greater of the current 2013–2014 DPE or 2013–2014 LPE tax collections increased by 4.03 percent. This was the growth factor used in the appropriations process for the current biennium. Unless your school district has successfully completed a tax rollback election (TRE) and changed its M&O tax rate, the LPE column will not be updated until the year-end    settle-up for the 2014–2015 school year occurs. As a result, payments to your school district will not reflect updates in tax collections. If your district had a successful TRE, we will adjust your district's LPE collections once data from the Texas Comptroller’s PTAD are available in late January 2015.

•        Charter Schools: The estimated M&O tax collections used for school districts have been used to determine the statewide average variables for charter schools.

•        Instructional Facilities Allotment (IFA) and Estimated M&O Tax Collections – If your district was awarded an IFA for a lease-purchase agreement, the district’s 2013 local share of the IFA allotment has been subtracted from the estimate of M&O tax collections.

•        Estimated I&S Tax Collections – For this preliminary SOF, the 2014–2015 interest and sinking fund (I&S) tax collections figure is based on your district’s 2013–2014 budgeted I&S collections submitted to the PEIMS. These collections will be updated in the fall of 2014.

•        Existing Debt Allotment (EDA) and IFA – The preliminary SOF does not yet include data regarding district debt for 2014–2015 school year, but carries 2013–2014 IFA and EDA allotments forward.  These allotments will be updated later this summer with data from the Municipal Advisory Council (MAC) on bond payments for the 2014–2015 school year. Program information regarding the calculations of allotments can be found on the EDA web page and the IFA web page.

•        New Instructional Facility Allotment (NIFA) – The TEC, §42.158, provides for NIFA funding for eligible school districts and charter schools to pay for operational expenses associated with opening new instructional facilities. This funding is contingent on appropriations for the allotment. However, the 2013 General Appropriations Act (Senate Bill 1) did not provide appropriations for NIFA awards. Therefore, no awards will be made.

•        Transportation Allotment – The transportation allotment is based on your school district’s current estimated 2013–2014 transportation allotment.

•        Per Capita Rate – A rate of $258 multiplied by the prior-year ADA is used to estimate the per capita allotment. The rate is subject to change during the fiscal year.

•        2014–2015 State Aid Template
•        School Districts: A link to the 2014–2015 state aid template and other worksheets developed by the Region XIII Education Service Center is available on the TEA FSP web page.

•        Charter Schools: A 2013–2014 Estimate of State Aid Template is available on the TEA Charter School State Funding Worksheets web page.
 
As always, we strongly advise your school district or charter school to project state aid based on the best available information. Your district or charter school should complete the 2014–2015 state aid template or an equivalent state aid estimation. The greatest value of the SOF is in explaining the basis of cash distributions to districts and charter schools. Estimates of state aid earned can be significantly impacted by factors not known to the State Funding Division.

If you have any questions about the SOF report, please contact a state funding consultant at (512) 463-9238. Additional contact information appears at the end of this letter.

Sincerely,



Amanda Brownson
Director of State Funding



State Funding Division Contact Information:

General SOF Questions, Chapter 42
Al Johnson
(512) 463-9260
al.johnson@tea.texas.gov

General SOF Questions, Chapter 41
Kim Wall
(512) 463-4809
kim.wall@tea.texas.gov

Charter School Funding
Nora Rainey
(512) 463-7298
nora.rainey@tea.texas.gov

Instructional Facilities Allotment, Existing Debt Allotment
Jacqueline Pree    
(512) 475-1217
jacqueline.pree@tea.texas.gov

Bond Guarantee Program
Cassie Huggins    
(512) 463-9232
cassie.huggins@tea.texas.gov

Transportation Funding
Danny Sanchez
(512) 463-9266
danny.sanchez@tea.texas.gov

Staff Salary Allotment
Al Johnson
(512) 463-9260
al.johnson@tea.texas.gov

State Compensatory Education, Optional Flexible Year Program, Optional Flexible School Day Program
Ashley Behnke
(512) 463-4834
ashley.behnke@tea.texas.gov

Texas Tax Code, Chapter 313, Agreements
Nancy Kuhn
(512) 463-6313
nancy.kuhn@tea.texas.gov