LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
May 16, 1997
TO: Honorable James E. "Pete" Laney IN RE: House Bill No. 107,
As Passed 2nd House
Speaker of the House Giddings
House of Representatives
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on HB107 ( relating
to specialized license plates to support the diagnosis of reading
development and comprehension at certain grade levels in public
school and to requirements concerning that diagnosis) this office
has detemined the following:
Biennial Net Impact to General Revenue Funds by HB107-As Passed 2nd House
Implementing the provisions of the bill would result in a net
negative impact of ($6,500,000) to General Revenue Related Funds
through the biennium ending August 31, 1999.
The bill would make no appropriation but could provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.
Fiscal Analysis
The bill would amend the Transportation Code to create a new,
dedicated "Read to Succeed" Account in the General Revenue
Fund. The bill would provide for the issuance of specially
designed "Read to Succeed" license plates for passenger cars
and light trucks. The annual fee for the license plates would
be $25 plus an amount, not to exceed $5, for administrative
costs. Revenues from the $25 fee would be deposited to the
credit of the newly created account.
The bill would also
amend Subchapter A, Chapter 28 of the Education Code by adding
Section 28.006, the "Read to Succeed" program and require development
and administration of reading diagnostic instruments to students
in kindergarten through second grade. The bill requires training
for educators in administering the reading instruments and requires
application of the test results to the instructional program.
For the purposes of this analysis, it is assumed that the
commissioner will compile a list of existing reading diagnostic
instruments, and that no additional costs will be incurred for
test item development for a new state reading test. Each reading
instrument adopted by either the commissioner or the local committee
must be based on scientific research concerning reading skills
development and reading comprehension, including for students
with limited English proficiency.
The bill prohibits using
the new K-2 reading tests results for school accountability,
teacher evaluation and principal appraisal. Test results will
not be reported to parents but will be reported to local school
boards.
The commissioner must adopt and school districts
must implement the tests not later than August 1, 1998.
Methodolgy
The Department of Transportation (TxDot) estimates that as many
as 20,000 persons may apply for these plates the first year,
and 15,000 of those will renew years 2 - 5.
TxDot estimates
there will be 5,000 new applications received each year during
years 2 - 5.
The cost of the "Read to Succeed" plate is $30,
with $25 to be deposited in the Read to Succeed account in General
Revenue Fund 001 and $5 to be deposited in Fund 006.
The
cost to process, manufacture, and distribute special license
plates is $8.24 per set.
FY 1998
20,000 new applicants
X $5.00 revenue = $100,000
20,000 new plates X $8.24 = $164,800
FY
1999 and beyond
15,000 renewals X $5 revenue = $75,000
5,000
new plates X $8.24 cost = $41,200
5,000 new X $5 revenue =
$25,000
The TxDot Registration Titling System (RTS) staff
estimates that approximately 134 hours at $75 per hour will
be required, in the first year, to modify the division's automated
RTS at a cost of $10,050.
The Information System Division
at TxDot estimates it will take approximately 56.4 project
days at $203.84 per day ($25.48 per hour) of additional in-house
programming costs to complete these modifications at a cost
of 11,497 (FY 1997)
Estimated costs to the Budget and Finance
Division - $.50 per renewal. This will cover the lock-box fee
for deposited revenue and administrative costs for Budget and
Finance Division. ($7,500 per year, FY 1998 and beyond)
The
bill would require the Commissioner of Education to adopt a
list of reading instruments and recommendations for reading
diagnosis not later than August 1, 1998. Also, it gives the
local district- and campus-level committees the opportunity
to adopt a different list than the commissioner's list. The
state will provide the funds to offset the cost of the reading
instruments that are on the commissioner's list, but the bill
does not permit use of state funds for reading instruments if
not on the commissioner's list.
For the purpose of the bill,
the Texas Education Agency projects a total student enrollment
for grades K through 2 for the 1998-1999 school year at 925,000
students. It is assumed that future enrollment will be at a
comparable level.
The cost of implementing a reading diagnostic
test is dependent upon the type of instrument chosen. While
an informal assessment could cost between $1 and $3 per student,
this fiscal note assumes only standardized diagnostic instruments
will be included on the commissioner's approved list, at a cost
of about $7 per student. The statewide costs would be approximately
$6.5 million annually. This amount includes personnel costs
for one additional FTE for evaluating reading instruments and
reimbursing school districts for costs associated with the program.
The probable fiscal implications of implementing the provisions
of the bill during each of the first five years following passage
is estimated as follows:
Five Year Impact:
Fiscal Year Probable Probable Revenue Probable Probable Revenue Change in Number
Savings/(Cost) Gain/(Loss) from Savings/(Cost) Gain/(Loss) from of State
from Foundation State Highway Fund from State New - GR Dedicated Employees from
School Fund Highway Fund FY 1998
0193 0006 0006 NEW-DED
1998 $0 $100,000 ($164,800) $500,000 1.0
1998 (6,500,000) 100,000 (48,700) 500,000 1.0
2000 (6,500,000) 100,000 (48,700) 500,000 1.0
2001 (6,500,000) 100,000 (48,700) 500,000 1.0
2002 (6,500,000) 100,000 (48,700) 500,000 1.0
Net Impact on General Revenue Related Funds:
Fiscal Year Probable Net Postive/(Negative)
General Revenue Related Funds
Funds
1998 $0
1999 (6,500,000)
2000 (6,500,000)
2001 (6,500,000)
2002 (6,500,000)
Similar annual fiscal implications would continue as long as
the provisions of the bill are in effect.
Fiscal impact on local units of government would be as follows:
Under
the provisions of this bill, a school district would be reimbursed
for the costs for administering the reading instruments only
if the district adopts a reading instrument on the commissioner's
list. Otherwise, local school districts could incur additional
costs if they decide to use a reading instrument that is adopted
by their local district- and campus-level committees. If districts
chose to use alternative assessment instruments, the expected
maximum local cost would be estimated at $6.5 million, in which
case the state cost would be reduced.
Additional district
costs incurred for teacher training required under this bill
could be met by displacing other staff development topics.
Teacher training costs are estimated at $40 per day per teacher
for approximately 60,000 teachers in grades K through 2.
Source: Agencies: 601 Department of Transportation
701 Texas Education Agency - Administration
LBB Staff: JK ,RR ,DH ,UP