texas association of school business officials 2011 budget academy
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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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Presentation Transcript
  • 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/

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: