📈 Budget, Tax, & Funding Revisions
2026-2027 Indirect Cost Rates
The Texas Education Agency (TEA) Federal Fiscal Compliance and Reporting Division has officially released the indirect cost rates for independent school districts (ISDs) and open-enrollment charter schools.
Effective Dates: July 1, 2026 - June 30, 2027
Where to Find Your Rates
You can access your district's or charter's specific rates in one of two ways:
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Public Access: View the full list for all ISDs and charter schools on the TEA Indirect Cost Rates webpage.
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Secure Access: Retrieve your official 2026-2027 Indirect Cost Rate Notification Letter through the TEAL application.
How to Access Your Notification Letter:
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- Log into TEAL
- Select "GFFC Reports and Data Collections"
- Select "View Reports and ISD Responses"
- Select "Notification Letter - Indirect Cost Rate" from the Report Title drop-down menu.
- Select "2026-2027" from the School Year drop-down menu.
For more questions regarding how your rates were calculated or issued, email the Federal Fiscal Compliance and Reporting Division at Compliance@tea.texas.gov. If you have questions about claiming indirect costs on a particular grant, please email the Grants Administration Division at Grants@tea.texas.gov.
Click here or the button below to view the full bulletin.
Tax Year 2026 Maximum Compressed Tax Rates (MCR)
TEA has released the initial state compression rates and calculations for Tax Year (TY) 2026. This determines the maximum compressed Tier One maintenance and operations (M&O) tax rates districts can adopt without forcing a voter election.
Key Rate Framework (TY 2026)
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State Compression Rate: Established at $0.6254 based on an estimated statewide property value growth rate of 3.60%.
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Local Floor: Due to equity limitations, no district's local MCR can drop below $0.5628.
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MCR Range: Final individual district Tier One MCRs will range between $0.5628 and $0.6254 depending on local property value growth.
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Max M&O Rate: The absolute maximum M&O tax rate any district can adopt for TY 2026 is $0.7954 ($0.6254 maximum MCR + $0.17 enrichment pennies).
Mandatory Action: Local Property Value Survey (LPVS)
To finalize your district's specific MCR, you must submit local data directly to TEA:
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Window Opens: July 18, 2026
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Submission Deadline: August 1, 2026
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Data Requirements: Districts must enter TY 2026 locally certified values calculated using the $140,000 state homestead exemption.
Next Steps:
- Download the Tool: Use the Tax Rate and MCR Template under the District & Charter Planning Tools on TEA’s State Funding webpage to estimate your local rates.
- Do Not Adopt Yet: Districts may only formally adopt their final tax rates after TEA explicitly approves their LPVS data submission in August 2026.
Click here or the button below to view the full update.
TEA Updates 2025–26 SOF Reports: Review for Funding Impacts
The Texas Education Agency (TEA) has released updated 2025–26 Summary of Finances (SOF) reports. These updates incorporate several critical funding revisions, including Teacher Retention Allotment data, facilities/bond information, attendance data through the fifth six weeks, and new bilingual allotment calculations under House Bill 2.
Key Takeaways:
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HB 2 Bilingual Changes: TEA has finalized HB 2 bilingual allotment provisions for dual language immersion programs using alternative methods.
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Statewide Impact: Roughly 200 school systems statewide are affected. While statewide bilingual revenue is expected to increase by about $31 million, individual districts may see either increases or decreases based on their program approval status under TEC §29.054.
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Settle-Up is Coming: Prepare for more SOF revisions during the near-final settle-up in September, which will pull in certified property values, tax collections, and final attendance data.
Recommended Actions for Districts:
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Check Your Report: Review your updated SOF report immediately to identify any unexpected changes to your state funding estimates and cash flow projections.
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Verify Bilingual Status: If your district utilizes alternative method dual language programs, double-check your official program approval status.
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Adjust Forecasts: Evaluate how these automatic updates impact your current budget and cash flow ahead of the September settle-up.
Click here or the button below to view the full bulletin.
🧠 Special Education & Student Supports
Special Education Funding Updates & Summer Grant Opportunity
TEA has updated its guidance on the historic shift to the new special education service intensity funding model (HB 2 / SB 568), which takes effect September 1, 2026.
Crucial Transition Rules (2026–2027)
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The Shift: Funding will no longer be based on a student's instructional setting code. Instead, it will be driven by the student’s actual needs via Tiers of Intensity and Service Group Allotments.
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Dual Reporting Mandate: For the 2026–2027 school year only, districts must enter BOTH the old instructional setting codes AND the new intensity data elements into PEIMS. This must be ready for the October 8 PEIMS Fall Snapshot.
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Hold Harmless: A $250 million statewide funding boost ensures no district receives less under the new formula during this transition year.
Open Now: 2026 Summer Special Education Data Support Grant
Administered by ESC 10, this grant is open to any school system with at least 50 special education students.
Purpose: Covers staff stipends and overtime costs for auditing student IEP records over the summer to ensure data fields are accurate before school starts.
‼️Next Steps:
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Apply Immediately: Access the application via ESC 10 or the TEA Grants page.
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Attend Office Hours: Ensure your Special Education and PEIMS teams join TEA’s weekly Thursday Zoom office hours (9:00 AM & 4:00 PM) to clarify new data entry fields.
Click here or the button below to learn more about the updates & grant.
New HB 2 Literacy Tutoring Program (PASS) Launches Fall 2026
A new state program created under House Bill 2—the Parent Access to Supplemental Supports (PASS) program—is launching this fall. It provides eligible families of 3rd-grade students who did not meet grade-level standards on the STAAR Reading Language Arts (RLA) assessment with a $400 account for approved literacy tutoring services.
Key Considerations for Districts:
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Active Notifications: Eligible families began receiving notifications through the STAAR Family Portal on June 16, 2026.
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Staff Preparation: Districts should immediately prepare front-office, campus, and instructional staff to answer parent inquiries regarding these accounts and how to access them.
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Complementary Support: PASS funds are intended to serve as an additional intervention layer for struggling readers, perfectly complementing your campus's existing literacy initiatives.
Click here or the button below to view the full overview from ESC-10.
📋 Allotments, Accountability, & Compliance
Action Recommended
CCMR Verifier Open Through June 26
The Texas Education Agency (TEA) has opened the College, Career, and Military Readiness (CCMR) Verifier within the Accountability application in TEAL. Districts must review this data immediately to ensure accuracy before 2026 accountability calculations are finalized.
📅 Key Deadlines & Timeline
Note: TEA's recommended target date for initial complete Working Submissions was June 12.
What Can (and Cannot) Be Corrected
The verifier allows you to request corrections for specific indicators, but others require a direct PEIMS update:
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Correctable via CCMR Verifier
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Correctable ONLY via PEIMS Working Submission
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- ACT, SAT, TSIA, AP, and IB results
- OnRamps dual enrollment course completion
- Level I and Level II certificates
- Military enlistment (DD Form 4)
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- Dual credit courses
- Industry-Based Certifications (IBCs)
- Associate degrees
- College preparatory course completion
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‼️Required District Actions
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Audit Cohort Data: Review CCMR Verifier data for 2024–25 graduates and non-graduating 12th graders.
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Submit Proof: Upload required supporting documentation for any discrepancies identified within the verifier.
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Monitor Approvals: Track submitted requests in TEAL for approval status or requests from TEA for additional documentation.
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Sync with PEIMS: Ensure your PEIMS coordinator completes and confirms any necessary Working Submissions by the June 26 deadline.
Why This Matters: Only approved verifier corrections and validated PEIMS Working Submissions received by June 26 will be factored into your final 2026 accountability ratings. Uncorrected errors will stand.
Click here or the button below to view more.
How Districts Can Prevent Negative Impacts on
TIA Fund Balances
Because school districts are required to pre-pay Teacher Incentive Allotment (TIA) funds to teachers by August 31, the timing gap before state reimbursement can negatively impact your year-end fund balances.
Fortunately, there is a simple accounting mechanism to prevent this.
The Solution: Accrue the Funds
To include these funds in your year-end financial statement and protect your balance, your business office can mark the allotment as, “Due from the state” OR “Guaranteed state reimbursement”.
This mirrors exactly how your district handles all other anticipated settle-up funds in the Foundation School Program (FSP).
‼️Next Steps:
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Review the Manual: For step-by-step instructions, reference the TIA Spending Guidance for District Business Offices.
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Coordinate Internationally: Ensure your finance team is aware of this designation before the August 31 close out to avoid an artificial deficit on paper.
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New Instructional Facility Allotment (NIFA)
Application Open
The Texas Education Agency (TEA) has officially opened the 2026–2027 NIFA application window, and it comes with some major, highly beneficial updates for school districts.
What’s New for 2026?
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Expanded Eligibility: Under House Bill 2, NIFA eligibility now includes renovations of existing facilities that are being used for the first time to provide high-cost and undersubscribed Career and Technical Education (CTE) programs.
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More Funding Available: The annual program funding cap has jumped from $100 million to $150 million.
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Allotment Amount: Eligible districts and charter schools can receive up to $1,000 per ADA for newly constructed, repurposed, leased, or qualifying renovated instructional facilities.
‼️Key Deadlines & Next Steps:
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Due Date: Applications must be submitted by July 15, 2026, through the FSP system in TEAL.
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Action Item: If your district is planning facility openings or CTE renovations, review the updated eligibility requirements immediately and ensure your attendance tracking procedures are properly set up for these participating facilities.
Click here or the button below to view the full bulletin.
IRS Moves 403(b) Plan Restatement Deadline to December 31, 2026
If your school district sponsors a 403(b) retirement plan, it's time to put a critical compliance date on your calendar. The IRS has officially set December 31, 2026, as the deadline for adopting an updated, IRS-approved 403(b) plan document.
If your school district sponsors a 403(b) retirement plan, it's time to put a critical compliance date on your calendar. The IRS has officially set December 31, 2026, as the deadline for adopting an updated, IRS-approved 403(b) plan document.
Key Takeaways:
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Mandatory Update: All school district 403(b) plans must be fully restated and formally board-adopted by the end of the year.
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Compliance Risk: Failing to complete this restatement by the deadline could force your district into corrective action through the IRS Employee Plans Compliance Resolution System (EPCRS).
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Pre-Approval Required: The updated plan document must be IRS pre-approved and reflect all current federal requirements.
Recommended Actions:
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Contact Your TPA Now: Reach out to your 403(b) Third-Party Administrator (TPA) immediately to coordinate the review, approval, and execution of the restated document.
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No TPA? If your district does not utilize a retirement plan TPA, seek assistance from a qualified 403(b) plan professional as soon as possible to avoid missing the window.
Click here or the button below to read more.
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🚌 Operations & Safety
New School Bus Safety Grant Program
Created by the 89th Texas Legislature under Senate Bill 1 (Rider 85), the state has appropriated $10 million for a new School Bus Safety Grant Program. This Informal Discretionary Competition (IDC) grant aims to assist school systems with the costs of retrofitting school buses with three-point seat belts.
Funding Allocation
Approved recipients can receive a maximum of $6,000 per school bus to install the required three-point seat belts.
Who is Eligible?
To apply, school systems must meet both of the following criteria:
- Receive the state Transportation Allotment under TEC §48.151.
- Have completed the mandatory SB 546 Reporting on School Seat Belt Costs.
Critical Application Rule
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Initial Step: Eligible districts must complete the IDC Data Application via the Qualtrics survey link provided by TEA.
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48-Hour Clock: Once you start the online survey application, it remains open for only 48 hours before the entered information expires and resets. Use TEA's downloadable PDF preview to gather your data before clicking the live link.
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Deadline: The IDC Data Application must be submitted by August 14, 2026.
Next Steps:
Key Dates & Updates
Budget & Tax Rate Planning
- June 19: Deadline for July 1 fiscal year districts to prepare a proposed budget.
- June 20: Last day to publish the Notice of Public Meeting to Discuss Budget and Proposed Tax Rate.
- June 30: Deadline for July 1 fiscal year districts to adopt the budget.
CCMR Verifier Deadline
- June 26: Final day to review and submit CCMR Verifier corrections that may impact accountability calculations.
New HB 2 PASS Program
- Eligible families of Grade 3 students who did not meet STAAR RLA standards will begin receiving notifications this summer for the Parent Access to Supplemental Supports (PASS) tutoring program.
Property Values & State Aid Planning
- July 18: TEA Local Property Value Survey opens.
- Late July: Certified appraisal values become available, allowing districts to refine state aid estimates and budget projections.
Special Education Funding Transition
- The 2026 Special Education Data Support Grant application is now open to assist districts providing extra-duty pay for staff reviewing IEPs and assigning service intensity ratings under the new funding model.
Federal Grant Planning
- Review your district's newly released 2026–27 indirect cost rates and update federal grant budgets and cost recovery assumptions as appropriate
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