Module # 1
description
Transcript of Module # 1
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Module # 1
Basic Orientation to
Texas School Finance
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TEC Chapter 42
It is the policy of this state that the provision of public education is a state responsibility, and that a thorough and efficient system be provided and substantially financed through state revenue sources…
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Cont’d
so that each student enrolled in the public school system shall have access to programs and services, …
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Cont’d
that are appropriate to the student’s educational needs, and that are substantially equal to those available to any similar student, notwithstanding varying local economic factors.
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Three main sources of revenue are:
StateFederalLocal
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Local RevenueLocal revenues are derived
from taxation, school organization fund raising, investments, gifts and bequests, extra-curricular gate receipts, and other sources.
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State RevenueState: The state public
school finance system is a very complex set of formulas designed by the state to allow equal access to programs and services…
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Cont’dthat are appropriate to the
student’s needs, in all school districts throughout the state, despite different taxable values.
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Federal RevenueFederal: Districts may apply for funds from the federal government that are categorical in nature and must be spent exclusively for the purposes intended.
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Revenue by Source (for Texas)
Billions and PercentState: $11.5 46.1%Federal $ 0.9 3.4%Local $12.6 50.5%Source TEA Snapshot(This data should be taken as
approximations because the data is based on 1999-2000 data.)
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RevenueFactors Driving State
FundingAverage Daily Attendance
(ADA)Property WealthTax Effort
(The Texas School Foundation Program state aid is determined by these three major factors)
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Federal Revenue
All federal funds are categorical in nature and must be spent for designated programs.
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Examples Are:
Title I, II, IV, VICareer and TechnologySpecial Education (IDEA B)School Lunch Program
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Local RevenueTaxation
Categories of Taxes include:
Maintenance and Operations (M&O) (TEC Chapter 45)
(TEC Chapter 45) Interest and Sinking (I&S)
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Maintenance and Operations
(M & O)According to (TEC Chapter 45)
districts may levy, assess, and collect annual ad valorem taxes for the further maintenance of public schools in the district.
(The limit is $1.50 for M & O taxes)
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Interest and Sinking (I & S)
According to (TEC Chapter 45) districts may issue bonds for the construction of school buildings in the districts and the purchase of the necessary sites for the school buildings…
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Cont’dand may levy, pledge,
assess, and collect annual ad valorem taxes sufficient to pay principal of and interest on the bonds. (Generally the limit is $.50 for the I & S taxes)
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Taxation
Process and legal requirements for taxation:
Publication (Tax Code)Hearing (Tax Code)Rollback (Tax Code)Adoption (TEC Chapter 11)
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Budget
In Chapter 44 of the TEC, the requirements of the budget process set forth are:
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1. Preparation of budget by the superintendent
2. Hearing of proposed budget by the board
3. Adoption of a budget by the board
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Budget
Budget must be balanced
District may not operate a deficit budget
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Financing Educational Excellence Budget
The budget is the district’s plan to produce educational excellence expressed in terms of dollars.
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The budget addresses three important functions:
1. Planning (present and future operations)
2. Monitoring (expenditures)3. Communicating (to staff
and public about resources)
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Budget Expenditure Analysis
Payroll 73.8% Other Operating 14.6% Non-Operating 10.5%
(includes construction and I & S debt payments)
(Please note that the three object expenses and percentages are statewide averages based on data from 1999-2000)
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Financial Vital Signs
Declining ADA (Loss of student enrollment)
Declining Fund Balance
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Cont’d
Payroll Cost (salaries plus benefits increasing or staying the same while student enrollment is declining)
Tax Effort
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Key Terms in Finance
Available School Fund (ASF): created by the Texas Constitution of 1876, the ASF is made up on earnings from the Permanent School Fund and constitutionally dedicated motor fuel taxes and other miscellaneous revenue sources.
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Key Terms
ASF cont’d:
The bulk of ASF revenue is distributed on a per capita basis to school districts. The annual amount has ranged between $275 and $300 per student in recent years. A portion provides funding for textbooks and technology.
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Key Terms (cont’d)Average Daily Attendance (ADA): ADA is a method of counting students for the purpose of providing state aid to school districts.
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Key Terms (cont’d) Basic Allotment: Basic
allotment is the initial or starting number that after adjustment, is used to calculate foundation program costs and state aid to school districts. The basic allotment is currently $2,537.
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Key Terms (cont’d)Chapter 41 District: A school
district that has property wealth in excess of $300,000 per weighted student in 2002 and $305,000 per weighted student in 2003 and is subject to recapture provisions.
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Key Terms (cont’d)Compensatory Education:
allotment that provides additional financial support to school districts to teach educationally disadvantaged pupils and underachieving students.
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Key Terms (cont’d)Comptroller’s Property Tax Division (CPTD): department responsible for conducting an annual property value study that determines the taxable wealth of each Texas school district.
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Key Terms (cont’d)Cost of Education Index (CEI) or Adjustment: an index the state uses to adjust the basic allotment to account for geographic or other cost differences beyond local school district control.
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Key Terms (cont’d)County Appraisal District (CAD): an appraisal district office responsible for maintaining taxable real and personal property records and placing a value on all property for taxation purposes.
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Key Terms (cont’d)Equity: refers to fair or
equal distribution of resources for schooling, taking into account student differences and school district characteristics.
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Key Terms (cont’d)Existing Debt Allotment (EDA): provides assistance to school districts in making debt service payments on qualifying debt for which taxes were levied prior to the 2000-2001 school year.
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Key Terms (cont’d)Foundation School Fund:
is a dedicated stream of revenue in the state budget used exclusively to fund public education.
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Key Terms (cont’d)Foundation School Program (FSP): a program for the support of a basic instructional program for all Texas school children.
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Key Terms (cont’d)General Revenue (GR) Fund: is the state’s main funding source.
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Key Terms (cont’d)Guaranteed Yield: is a
finance plan in which the state specifies a revenue yield that is will guarantee in terms of revenue per student per penny of local tax effort.
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Key Terms (cont’d)Hold Harmless: term used
to describe a provision in new law that is designed to protect a school district from a loss of local revenue or state aid.
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Key Terms (cont’d) Instructional Facilities
Allotment (IFA): program that was initially authorized by the 75th legislature in 1997 to provide assistance to districts in making debt service payments on qualifying bonds and lease-purchase agreements.
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Key Terms (cont’d)Interest and Sinking Fund (I & S) Tax Rate: Also called the debt service tax rate, I & S taxes pay for bonded indebtedness, facilities, and other capital needs.
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Key Terms (cont’d)Local Fund Assignment (LFA): is the tax rate that a district is required to levy in order to participate in the FSP.
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Key Terms (cont’d)Maintenance and Operations
(M & O) Tax Rate: is a local school district property tax rate that raises revenue to operate and maintain the district’s schools. (Maximum of $1.50)
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Key Terms (cont’d) Permanent School Fund (PSF): a
fund created by the TX. Constitution where earnings go into the ASF, which the state must apportion on a per capita basis to counties for students enrolled in TX public schools after funding state textbook purchases.
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Key Terms (cont’d)Public Education Grant (PEG): permits students in low-performing schools to attend a public school in the student’s home district or in another district.
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Key Terms (cont’d)Recapture: a feature of
school finance where local districts give the state locally collected property tax revenue for the redistribution through the FSP.
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Key Terms (cont’d)Rollback Rate: is a tax rate
that would provide more than the same local taxes and state aid per WADA as was available the previous year, plus debt service taxes, and $0.06.
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Key Terms (cont’d)State Board of Education (SBOE): 15 member body elected by general election from various districts statewide to provide leadership and to adopt rules and policies for public education.
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Key Terms (cont’d)Telecommunications Infrastructure Fund (TIF): Will fund up to $1.5 billion over 10 years to link Texas schools, hospitals, and libraries for distance learning and information sharing.
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Key Terms (cont’d)Wealth: is measured in
taxable value of property per WADA.
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Key Terms (cont’d) Weighted Average Daily
Attendance (WADA): In Texas, students with special education needs are weighted for funding purposes to help recognize the additional costs of educating those students.
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Yes, Texas School Finance
Will ChangeThere may be major changes
ahead. The keys to success are:
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1. Understanding the current finance structure
2. Keeping up with the proposed changes before they become law
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3. Knowing that everything will not change
4. Adapt to new legislation from a perspective of experience
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It is worth the effort to know what to do and why it is done
from a standpoint of the status of law that creates the systems
used in public schools.
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A cookbook for public school finance is a way to learn, not a way to
survive!!