School Finance Update

South Plains TASBOFebruary 12, 2008

2007-08 Summary of Finances Updated recently to reflect revised

CPTD values received from the Comptroller’s office in December

CPTD values changed due to property tax relief for over-65 folks (frozen levy)

Updated SOF only 1st step

2007-08 Summary of Finances Next step is to determine the amount of

frozen levy lost

Gain in state aid resulting from revised CPTD values will be measured against the loss

If gain does not offset loss, additional state aid will make up the difference (yet another “hold harmless”)

Not sure when all this will be completed

2007-08 Summary of Finances Other Changes

Tax rates updated Tax collections updated Comp Ed enrollments updates Target revenue has been adjusted to reflect

changes in Transportation and NIFA allotments from base year to 2007-08

EDA/IFA, charge for selling WADA, and gain from selling WADA also updated

2007-08 Summary of Finances Student counts (other than Comp Ed

enrollment) have not yet been updated

Will change DPE column probably in March

TEA will take historical ratio between PEIMS Fall enrollment and end-of-year ADA and apply ratio to this past PEIMS Fall enrollment

2008-09 Rollback Rate Lesser of:

1) ($1.50 x .6667) + $.04 = $1.04005 + any voter-approved pennies adopted in 2007-08; OR

2) Effective M&O Tax Rate + $.04

The 2 Additional “Golden” Pennies – Election Required??

Level 2 of Tier II applies to “…the first six cents by which the district’s maintenance and operations tax rate exceeds the rate equal to the product of the state compression percentage…multiplied by the maintenance and operations tax rate adopted by the district for the 2005 tax year;…”(TEC 42.302(a-1)(2))

The 2 Additional “Golden” Pennies – Election Required??

If district’s M&O rate was $1.50 in 2005-06, then election will (probably) be required

$1.50 x .6667 = $1.00005 compressed rate

Rollback rate would (in all probability) be $1.04005, so to get to $1.06005 (to get to the 2 “golden” pennies), you would need voter approval

The 2 Additional “Golden” Pennies – Election Required??

If district’s M&O rate was below $1.50 in 2005-06, then election may not be required

$1.45 x .6667 = $.9667 compressed rate

If Effective M&O Tax Rate is $1.03 and district adopts $1.03, then there would be $.0633 ($1.03 - $.9667 = $.0633) above the compressed rate...so you would get the 2 “golden” pennies without having to go to the voters

The 2 Additional “Golden” Pennies – Election Required??

The break point

2005-06 M&O Rate:$1.46 x .6667 = $.97338 + $.04 + $.02 = $1.03338$1.47 x .6667 = $.98005 + $.04 + $.02 = $1.04005$1.48 x .6667 = $.98672 + $.04 + $.02 = $1.04672$1.49 x .6667 = $.99338 + $.04 + $.02 = $1.05338$1.50 x .6667 = $1.0001 + $.04 + $.02 = $1.06010

2006-07 “Near Final” Data

73 districts have “S1” as greater of705 districts have “S2” as greater of248 districts have “S3” as greater of

Numbers may change when “final” 2006-07 SOFs are generated in March/April

“Greater of” amounts will change when “final” 2006-07 SOFs are generated in March/April

"Greater of" Revenue per WADA -- All Districts

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

0 200 400 600 800 1000 1200

Average

New Equity Issue? Part of Supreme Court’s ruling from

Edgewood IV and TEC 42.001

“…substantially equal access to similar revenue per student at similar tax effort…”

The so-called “$600 gap” was deemed “substantially equal” by the Supreme Court

"Greater of" Revenue per WADA (Districts With 2005-06 M&O Tax Rates From $1.485 to $1.50)

(584 Districts)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

0 100 200 300 400 500 600 700

"Greater of" Revenue per WADA (Ch 42 Districts With 2005-06 M&O Tax Rates From $1.485 to $1.50)

(505 Districts)

$4,003

$4,878 $4,775

$6,571

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

"Poorest"Ch 42 District

"Richest" Ch 42 District

Average Ch 42 District

Median Ch 42 District

"Greater of" Revenue per WADA (Ch 41 Districts With 2005-06 M&O Tax Rates From $1.485 to $1.50)

(75 Districts)

$4,768

$6,202$5,934

$9,235

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

"Poorest" Ch 41 District

Average Ch 41 District

"Richest" Ch 41 District

Median Ch 41 District

"Greater of" Revenue per WADA: Ch 42 & 41 Districts - Poorest to Richest (M&O Tax Rates

From $1.485 to $1.50)

$4,003$4,768

$6,571

$9,235

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

1

Poorest Ch 42 District

Poorest Ch 41 District

Richest Ch 42 District

Richest Ch 41 District

New Equity Issue? The point of all the previous graphs is to

show that, up to the compressed rate, there might be a new equity issue that may have to be addressed

The Template Still on Release 2 of the 07-08/08-09

template

Should not be a multitude of releases this time around

New interpretations/rules would cause new versions to be released

A New “Alternative” Template An 8-Step Path to Enlightenment

Requires only 8 data entry items

The result should give the user a total state/local general revenue amount that is in the ballpark of the result using the regular template