Glossary

Available School Fund (ASF):
Created by the Texas Constitution of 1876, the ASF is made up of earnings from the Permanent School Fund and constitutionally dedicated motor fuel taxes and other miscellaneous revenue sources. The bulk of ASF revenue is distributed on a per capita basis to school districts. The annual amount is about $400 per student in 2003-04. A portion of the ASF provides funding for textbooks and technology.

Average Daily Attendance (ADA):
ADA is a method of counting students for the purpose of providing state aid to school districts. Currently, Texas counts students in attendance each day and averages the attendance count over the year.

Basic Allotment:
The 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.

Chapter 41 District:
Referring to Chapter 41 of the Texas Education Code, a Chapter 41 school district that has property wealth in excess of $305,000 per weighted student is subject to recapture provisions. In 2004-05 there are 135 Chapter 41 school districts.

Compensatory Education:
The state compensatory education allotment provides additional financial support to school districts to teach educationally disadvantaged pupils and underachieving students. A compensatory education program should provide additional services and instructional support, beyond the regular program, to help students compensate for academic deficiencies and may include programs for at-risk students. The allotment is based on the number of students participating in the federal free or reduced-price lunch program.

Comptroller's Property Tax Division (CPTD):
The CPTD is the department responsible for conducting the annual property value study that determines the taxable wealth of each Texas school district to be used to allocate state aid.

Cost of Education Index (CEI) or Adjustment:
The CEI is an index the state uses to adjust the Basic Allotment to account for geographic or other cost differences beyond local school district control. The CEI has not been updated since 1990.

County Appraisal District (CAD):
Each county has established an appraisal district office responsible for maintaining taxable real and personal property records and placing a value on all property for taxation purposes. A chief appraiser heads the CAD office. He or she is an individual appointed by an appraisal district board of directors. The appraisal district board is elected by certain taxing entities.

Equity:
In school finance, the term refers to fair or equal distribution of resources for schooling, taking into account student differences and school district characteristics. The standard used by the Texas Supreme Court is a taxpayer equity standard, which means similar revenue for similar tax effort. In other words, the school finance system is to be property wealth neutral: a district's property tax base should have little or no impact on its ability to finance the local share of the Foundation School Program.

Existing Debt Allotment (EDA):
The EDA program was initially authorized by the 76th Legislature in 1999. The EDA program provides assistance to school districts in making debt service payments on qualifying debt. For the 2004-2005 biennium, qualifying debt is defined as debt for which taxes were levied prior to the 2003-2004 school year.

Foundation School Fund:
The Foundation School Fund is a dedicated stream of revenue in the state budget used exclusively to fund public education. The fund primarily consists of tax collections transferred from other state accounts.

Foundation School Program (FSP):
The FSP is a program for the support of a basic instructional program for all Texas school children. Currently, the FSP described in Chapter 42 of the Texas Education Code consists of two parts, or tiers. The first tier provides funding for a basic program. The second tier provides a guaranteed yield system so that school districts have substantially equal access to revenue sufficient to support an accredited program.

General Revenue (GR) Fund:
The GR Fund is the state's main funding source. Money collected from state taxes and other non-dedicated sources go into this fund, and it is used to provide revenue for most state programs.

Guaranteed Yield:
The guaranteed yield is a school finance plan in which the state specifies a revenue yield that it will guarantee in terms of revenue per student per penny of local tax effort. Districts adopt tax rates and levy taxes. The state makes up he difference between what each district levies locally per student and the guaranteed yield per student. High-wealth districts may raise all of their guaranteed yield revenue from local tax sources.

Hold Harmless:
The term "hold harmless" is 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. Hold harmless provisions are common when a significant change is made to a formula or funding source.

Instructional Facilities Allotment (IFA):
The IFA program provides assistance to school districts in making debt service payments on qualifying bonds and lease-purchase agreements to construct instructional facilities. IFA is distributed through grants, most of which go to districts with low property wealth.

Interest and Sinking Fund (I&S) Tax Rate:
The I&S tax rate is also called the debt service tax rate. I&S taxes pay for bonded indebtedness, facilities, and other capital needs. Except for unusual circumstances, debt service tax rates are limited to $0.50.

Local Fund Assignment (LFA):
The LFA is the amount of money for operations that a school district is required to raise. The state will provide additional funds if the LFA does not generate enough money to fund the Tier 1 foundation program.

Maintenance and Operations (M&O) Tax Rate:
The M&O tax rate is a local school district property tax rate that raises revenue to operate and maintain the district's schools. M&O taxes are subject to a statutory maximum of $1.50 per $100 of taxable value.

Permanent School Fund (PSF):
The PSF is a perpetual trust fund created by the Texas Constitution in 1876. PSF earnings go into the ASF, which the state must apportion on a per capita basis to counties for students enrolled in Texas public schools after funding state textbook purchases. PSF investments include U.S. Treasury bonds, Texas municipal bonds, school district building bonds, and securities. The SBOE administers the fund under constitutional and statutory requirements.

Public Education Grant (PEG):
Students in low-performing schools may request to attend a different public school in the student's home district or in another district. The amount of the PEG is the total state and local funding per student for the student's home district. The receiving district may accept or reject the student and may not charge the student tuition.

Recapture:
Recapture is a feature of school finance where local districts give the state locally collected property tax revenue for redistribution through the FSP. The recapture provision in Chapter 41 of the Texas Education Code is a salient feature of the Texas school finance equalization system. It is also referred to as the "Robin Hood" provision.

Rollback Rate:
The rollback rate is a tax rate that would provide roughly the same local taxes and state aid per WADA as was available the previous year, plus debt service taxes, and $0.06.

State Board of Education (SBOE):
The SBOE is a 15-member body elected by general election (staggered, four-year terms) from various districts statewide to provide leadership and to adopt rules and policies for public education in the state.

Wealth:
In school finance, the wealth of a district is measured in taxable property value per student in weighted average daily attendance (WADA).

Weighted Average Daily Attendance (WADA):
In Texas, students with additional education needs are weighted for funding purposes to help recognize the additional costs of educating those students. Weighted programs include special education, vocational, bilingual, gifted and talented, and compensatory education. A weighted student count is used to distribute guaranteed yield funding.

Glossary originally published by the Texas Association of School Boards, used with permission.