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Texas Association of School Business Officials 2011 Budget Academy. January 14, 2011 San Marcos, TX. Agenda. House Bill 3 (HB 3) Financial solvency review Financial Allocation Study for Texas (FAST) School Bus Seat Belt Grant Program Texas Economic Development Act (TEDA) reports

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Texas association of school business officials 2011 budget academy

Texas Association of School Business Officials 2011 Budget Academy

January 14, 2011

San Marcos, TX


Agenda
Agenda

  • House Bill 3 (HB 3)

    • Financial solvency review

    • Financial Allocation Study for Texas (FAST)

  • School Bus Seat Belt Grant Program

  • Texas Economic Development Act (TEDA) reports

  • Dual credit

  • Foundation School Program (FSP)

    • Payment system

    • Advanced career and technical education allotment

    • Funding issues

  • Budget outlook

  • Looking ahead

  • Questions?


House bill 3 hb 3 financial solvency review
House Bill 3 (HB 3): Financial Solvency Review

  • Mandated by HB 3, 81st Legislature

    • Requires survey of actual first-quarter expenditures

    • Current survey closes today (January 14, 2011)

  • Review includes

    • Analysis of data reported to Public Education Information Management System (PEIMS)

    • Annual financial audit


Hb 3 financial solvency review
HB 3: Financial Solvency Review

  • Indicators (see Appendix)

    • Student-to-staff ratios

      • WADA:all staff

      • Enrollment:teachers

    • General fund expenditures exceeding revenues—current year or recurring problems

    • Declining or low fund balance


Hb 3 financial solvency review1
HB 3: Financial Solvency Review

  • Two-step identification process

    • Model will flag districts based on indicators

    • TEA audit staff will request additional information before final determination

  • Financial solvency plan

    • Plan required of districts that are identified as having financial solvency problems

    • Failure to adopt and follow plan can lead to sanctions under the Texas Education Code, Chapter 39


Hb 3 financial solvency review2
HB 3: Financial Solvency Review

  • Rules effective December 22, 2010

  • Current survey covers two years

    • Need to make determinations for 2009–2010 and 2010–2011

    • Future surveys will cover current year only

  • Results anticipated by midspring


Hb 3 financial allocation study for texas fast
HB 3: Financial Allocation Study for Texas (FAST)

  • Study conducted by the Comptroller of Public Accounts (CPA)

  • Created rating system for school districts and charter schools based on performance of students and expenditures

  • May be issues with analysis of expenditures related to retirement contributions


School bus seat belt grant program
School Bus Seat Belt Grant Program

  • Grant program is open for second round of funding

  • New deadline: February 28, 2011

  • Total appropriation: $10 million

  • Remaining available funds: ≈$8.8 million

  • Covers costs of seat belts only, not the cost of the bus itself


Dual credit
Dual Credit

  • Reminder: Funding exception expires at the end of this fiscal year

  • Attendance accounting issues

    • Attendance-taking problems

      • Sign-in sheets are not acceptable

      • Cooperation of college staff is crucial

      • Alternate time is allowed if properly documented

    • Schedule conflicts

      • Minutes of daily instruction

      • Mismatches between college and school district schedules


Dual credit1
Dual Credit

  • Limitation on the number of courses

    • Two courses per semester in junior and senior years

    • Programs must seek/receive permission to exceed the cap

    • Early College High Schools

      • May exceed limit

      • Must be designated by the Texas Education Agency (TEA)


Texas economic development act teda reports
Texas Economic Development Act (TEDA) Reports

  • CPA report recommendations:

    • Eliminate supplemental payments to districts

    • Modify requirements related to renewable energy

      • 64% of active projects

      • 7% of jobs created

      • Supplemental payments 2X rate of manufacturing projects

    • Eliminate local districts’ authority to waive job creation requirements

    • Evaluate program


Teda reports
TEDA Reports

  • Legislative Budget Board (LBB) report recommendations:

    • Realign responsibilities of state and school districts with regard to abatements

    • Expand economic impact analysis to include impact on state

    • Make separate provisions for renewable energy projects

    • Strengthen job creation requirements and clarify oversight responsibilities of CPA

    • Make funds for administration contingent on adoption of recommendations above


Foundation school program fsp payment system
Foundation School Program (FSP): Payment System

  • Retired mainframe application in July 2010

  • New system is functional, but

    • Processing times have slowed significantly

    • Issues with migration have delayed updates to prior year allocations

  • Payments for facilities programs will be made by the end of January in time for February bond payments


Fsp advanced career and technical education allotment
FSP: Advanced Career and Technical Education Allotment

  • New funding source in 2009–2010

  • Paid for the first time at the 2009–2010 settle-up

  • Allotments calculated incorrectly:

    • Used fall snapshot instead of summer PEIMS submission

    • Used head count instead of FTE count

  • Corrections reflected on current Summary of Finances in near future


Fsp funding issues
FSP: Funding Issues

  • LPE vs. DPE

    • Legislative payment estimate (LPE)

      • Established during appropriations process

      • Used to calculate FSP payments

    • District planning estimate (DPE)

      • Based on actual data as they become available

      • Used to establish FSP earnings

    • Differences are reconciled at settle-up

      • "Near-final" occurs after close of fiscal year

      • "Final" occurs after audit data are released


Fsp funding issues1
FSP: Funding Issues

  • Value growth assumptions

    • Tax year 2009 (2009–2010) = 2.98%

    • Tax year 2010 (2010–2011) = 3.34%

  • Will result in large settle-up amounts –currently estimated at $791 million

  • Scheduled for payment in September


Budget outlook
Budget Outlook

  • Legislative Appropriations Request (LAR)

    • No longer valid because of changes in property value, tax collection, and enrollment assumptions

    • Significant growth in general revenue costs for FSP over current biennium

      • Costs for current biennium exceed appropriation

      • Need to replace $3.2 billion in revenue provided by State Fiscal Stabilization Fund (SFSF)


Budget outlook1
Budget Outlook

  • Anticipated critical dates:

    • January 15 – revenue estimate

    • January 16 – legislative budget estimates

    • January 17 – appropriations bill, introduced

    • January 18 – LBB/agency briefing

    • March 1 – update on property value projections and student enrollment

    • May 30 – last day of regular session


Budget outlook2
Budget Outlook

  • Expect changes at TEA

    • Substantial reductions in force

    • Potential outsourcing of functions

    • Reorganization due to the departure of Associate Commissioner Jerel Booker

  • Expect cuts in funding to schools

    • FSP

    • State-funded grant programs


Budget outlook3
Budget Outlook

  • Questions we can’t answer yet:

    • What is the size of the budget shortfall?

    • Will the current year FSP shortfall of more than $700 million be covered by a supplemental appropriation?

    • Which programs will be cut?

    • How much will FSP and other state funding be cut over the next biennium?

    • How will cuts to funding be implemented?


Looking ahead
Looking Ahead

  • Keep close watch on budget process at Texas Legislature Online http://www.capitol.state.tx.us

  • Budget VERY conservatively for the coming biennium

    • Plan for cuts

    • Provide for flexibility when possible

  • Be sure to subscribe to the State Funding Listserv for announcements at http://miller.tea.state.tx.us/list/


Questions
Questions?

Lisa Dawn-Fisher, Ph.D.

Deputy Associate Commissioner for School Finance

Texas Education Agency

512.463.9179 phone

512.305.9165 fax

[email protected]

Office of School Finance home page:

http://www.tea.state.tx.us/index2.aspx?id=6957&menu_id=645&menu_id2=789


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