School Finance Update

1. School Finance Update South Plains TASBO February 12, 2008

2. 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

3. 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

4. 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

5. 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

6. 2008-09 Rollback Rate • Lesser of: • ($1.50 x .6667) + $.04 = $1.04005+ any voter-approved pennies adopted in 2007-08; OR • Effective M&O Tax Rate + $.04

7. 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))

8. 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

9. 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

10. 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

11. 2006-07 “Near Final” Data 73 districts have “S1” as greater of 705 districts have “S2” as greater of 248 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

13. 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

18. 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

19. 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

20. 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