LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
May 17, 1997
TO: Honorable Teel Bivins, Chair IN RE: House Bill No. 318, Committee Report 2nd House, Substituted
Committee on Education By: Cuellar
Senate
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on HB318 ( Relating
to the public education grant program.) this office has detemined
the following:
Biennial Net Impact to General Revenue Funds by HB318-Committee Report 2nd House, Substituted
Implementing the provisions of the bill would result in a net
(NEGATIVE) impact of $(376,248-3,762,483) 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
This bill would change the Public Education Grant (PEG) Program
by altering the amount of the grant. It would continue grants
even when the campus from which a student comes is no longer
considered low performing.
Funding is altered to be based
on the funding to which the district providing services is entitled
under the Foundation School Program. For each student attending
school at a district outside the district of residence under
the PEG program, the educating district is entitled to an allotment
equal to 10% of the adjusted basic allotment. Districts that
are ineligible for funding under the guaranteed yield program
are given supplemental assistance which is equivalent to any
excess cost experienced by the district in providing services
to a student that uses a PEG. School districts that agree to
accept at least one percent of their population on the basis
of a PEG are entitled to additional assistance in the school
facilities assistance program.
School districts would be
required to notify the parents of all students assigned to campuses
which meet the criteria for the PEG program that the campus
qualifies and that the student is eligible for a grant. The
notification must be provided by February 1 of each year. School
districts are also specifically authorized to contract with
other private or public entities for educational services to
students eligible to receive a public education grant, although
the authority already exists in Section 11.157, Education Code.
Methodolgy
Pursuant to current law, 652 campuses with 491,005 students
were eligible for a PEG grant in 1995-96. Of these, 31 students
actually requested and received a Public Education Grant (.006
percent). Due to natural growth in program participation
and the financial incentive provided in the bill, this estimate
assumes growth in the rate of student participation.
Section
29.203 stipulates that Foundation School Program formula funding
amounts of the receiving (or educating) district are used to
calculate the grant amount. These amounts are equivalent to
the amounts which would be generated for a typical transfer
student, and are therefore assumed to have no direct fiscal
implications for the state.
The Senate Committee Substitute
for this bill would be synonymous with current law under which
a campus is considered eligible only if in each of the three
preceding school years 50% or more of the students did not perform
satisfactorily on a TAAS instrument.
Sections 29.203 and
42.4101 provide additional assistance under the facilities program,
but only about 26% of districts receive that assistance. It
appears that the amount of assistance would be about equal to
that provided under current law, and therefore is expected to
have no significant impact.
Section 42.157 creates the Public
Education Grant Allotment. This allotment is equal to 10%
of the adjusted basic allotment and would likely average about
$267 based on the current average adjusted basic allotment amount.
This allotment would also tend to increase the number of weighted
students used in calculating the guaranteed yield amounts.
In
addition, districts which do not receive funding in the second
tier guaranteed yield program would be eligible for additional
funding to the extent that actual costs of services exceed the
amount of benefit in the Foundation School Program. While this
would increase costs to the state, it is unclear how much this
calculated excess cost would be. The typical amount of extra
funding available in the guaranteed yield is about $1100 per
weighted student, although the actual amount is variable, and
would apply to approximately 10% of the participants.
Given
the low participation in the first year, this estimate provides
two scenarios with different rates of participation. The first
scenario assumes 0.1% of eligible students would participate,
or roughly 491 students. At this level, the additional assistance
in the form of the extra allotment would cost about $131,097
per year. In the second scenario of a participation rate of
1%, cost of the allotment would reach about $1,310,970 each
year. The effect of extra allotments in the second tier of
funding is approximately 40% of the cost in the first tier.
This would raise the financial impact to the state to about
$183,536 per year for 0.1% participation, and to about $1,835,358
for 1% participation.
Both scenarios assume an annual growth
in participants of 5%.
The probable fiscal implications
of implementing the provisions of the bill during each of the
first five years following passage is estimated as follows:
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
Savings/(Cost)
from Foundation
School Fund
0193
1998 ($183,536)
1998 (192,712)
2000 (202,348)
2001 (212,465)
2002 (223,089)
Fiscal Year Probable
Savings/(Cost)
from Foundation
School Fund
0193
1998
1999 (1,927,125)
2000 (2,023,482)
2001 (2,124,656)
2002 (2,230,889)
Similar annual fiscal implications would continue as long as
the provisions of the bill are in effect.
The bill would require a specific notice be sent to the parents
of students assigned to low performing schools as described
by section 29.202. No significant fiscal implication to units
of local government is anticipated.
Source: Agencies: 701 Texas Education Agency - Administration
LBB Staff: JK ,LP ,UP