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You are receiving this information because you are subscribed to Public School Funding Updates for the Texas Education Agency (TEA).
Please do not reply to this message. This is a broadcast email sent to all Foundation School Program (FSP) State Funding bulletin members.
TEA is aware of an issue in property tax data that is impacting reported district funding levels in the school year 2025-2026 Summary of Finances (SOF) reports. The underlying causes have been identified and a resolution is underway. No immediate action is required at this time, and updates will flow automatically as part of property tax data recertification and a subsequent SOF run(s) next week.
Background
Section 48.2542, Texas Education Code (TEC), provides hold-harmless protection to school districts for reductions in the frozen levy resulting from a reduction of the amount of the limitation on tax increases provided by Section 11.26(a-10), Tax Code. This update addresses several ongoing issues related to property value data used by the Texas Education Agency (TEA) in connection with the frozen levy hold harmless provisions under TEC, §48.2542.
Why this matters:
- Certain data issues may reduce frozen levy hold harmless funding for some districts if not addressed methodologically.
- TEA will implement a revised calculation approach beginning in tax year 2025 (school year 2025-2026) to ensure consistent statewide treatment.
- No district action is required, though districts may notice and should carefully review changes in their SOF reports.
- Districts can plan appropriately during school year 2026-2027 budget development.
Summary of Identified Issues
1. Vendor-Related Data Issues
The Comptroller has identified vendor-related data discrepancies that affect a significant number of districts statewide. These issues are actively being corrected, and the Comptroller will issue a recertification of the affected data once updates are complete.
2. Self-Reported (SR) Calculation Methodology
The Comptroller recently transitioned from accepting district-submitted aggregated self-reported (SR) data to requiring property-level submissions. Under this new approach, the Comptroller—rather than appraisal districts—performs the calculation and aggregation of SR data.
Under the current methodology, any property that does not show a levy loss to the freeze under either the current law or prior law scenario is excluded from that scenario’s district-level totals. In practical terms, this means that properties with no levy loss to the freeze are omitted from district totals, even though they would have generated a loss to the district as the property would have paid a higher levy based on the taxable value under the pre-compression scenario. When aggregated, this omission can understate district-level levy losses.
This issue affects SR0706 (current law actual levy) and SR0716 (prior law actual levy), which appear on the Additional State Aid for Adjustment of Limitation on Tax Increases on Homestead of Elderly or Disabled (TEC 48.2542) detail reports in the SOF and are used to calculate each district’s frozen levy loss. For some districts, this understatement reduces the frozen levy hold harmless amount.
3. Aggregated SR Data Submissions
A number of districts have not yet transitioned to property-level submissions and continue to provide aggregated SR data to the Comptroller. This creates inconsistencies in how calculations are performed across districts.
Planned Resolutions
A. Comptroller Actions
Vendor data corrections will be incorporated into a forthcoming recertification from the Comptroller. No district action is required.
B. TEA Methodology Update
The Comptroller will not revise the SR calculation methodology. To ensure accurate frozen levy hold harmless funding while minimizing burden for districts, TEA will implement a revised calculation approach beginning in tax year 2025 (school year 2025-2026).
This approach ensures that all properties contributing to a levy loss under either current or prior law are included using existing district-level SR calculations.
Calculation Methodology Comparison
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Prior Method
(Pre-TY 2025)
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Prior Method (TY 2025 onward) with SR calculation method
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Adjusted Method (TY 2025 onward)
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SR VALUES USED:
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SR0716 minus SR0706
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SR0716 minus SR0706
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SR0705 adjusted by SR0707 and SR0717
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PROPERTY INCLUSION:
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Typically, all properties included
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Excludes properties from respective columns (current law or prior law) if they have no frozen levy loss.
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All properties included if they have a frozen levy loss in either current law or prior law scenario.
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AFFECT ON DISTRICT ACTUAL LEVY VALUES:
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Accurate district levy
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Understated district levy, since there is not an equal number of properties in the current law vs. prior law scenarios.
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Accurate district levy
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SOF Report Changes
Beginning in tax year 2025 (school year 2025-2026), once the TEA receives recertified data from the Comptroller’s office, SOF reports will reflect the revised methodology. Specifically:
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SR0706 (current law actual levy) will be displayed as the difference between SR0705 (calculated levy) and SR0707 (current law frozen levy loss).
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SR0716 (prior law actual levy) will be displayed as the difference between SR0705 (calculated levy) and SR0717 (prior law frozen levy loss).
What districts will notice:
- SR0706 and SR0716 can no longer be used as standalone reported values.
- Moving forward, these values will be derived from SR0705, SR0707, and SR0717.
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Total levy loss amounts should more accurately reflect the impacts of tax rate compression on the frozen levy.
These updates will produce a consistent, statewide methodology. Assuming SR data are reported correctly, the revised approach should align frozen levy loss to the property value loss (T17 minus T2 divided by the total tax rate) and accurately represent each district’s frozen levy loss.
Next Steps
While no district action is required to implement these changes, districts should check their Additional State Aid for Adjustment of Limitation on Tax Increases on Homestead of Elderly or Disabled (TEC 48.2542) detail reports carefully to ensure accuracy.
Contact Information
Inaccuracies in SR calculations and data should be handled through the Comptroller’s standard process.
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