LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session May 22, 1997 TO: Honorable Paul Sadler, Chair IN RE: Senate Bill No. 133, Committee Report 2nd House, Substituted Committee on Public Education By: Bivins House Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on SB133 ( Relating to the placement of a student in an alternative education program.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by SB133-Committee Report 2nd House, Substituted Implementing the provisions of the bill would result in a net negative impact of $(27,082,000) to General Revenue Related Funds through the biennium ending August 31, 1999. Fiscal Analysis The committee substitute substantively reworks Subchapter A, Chapter 37, Education Code, relating to Alternative Settings for Behavior Management and Education Achievement. The bill provides for all students who are removed from the regular school classroom or expelled from school to be retained and served in an educational program which may be provided in an in-school suspension setting (ISS), a district alternative education setting (AES) or in a county juvenile justice alternative education setting (JJAES). Hearings are required prior to student placement in district or county alternative settings. Transportation is required for students attending county programs (both current law and this bill assume students in any public school program are eligible for Foundation School Program transportation funding). The bill requires basic courses (same as current law) and graduation plans to be established for students in alternative education settings. All students in alternative settings are included in the state testing program; student scores are reported as if the student was enrolled at the student's assigned campus for accountability purposes (same as current law). The bill requires data collection on student placements in alternative settings. The bill provides for per student funding for attendance in a JJAES to flow from the school district to the county in an amount determined by a memorandum of understanding, but which is not less than the greater amount of either the student's regular campus program or district's alternative education setting. Methodolgy It is assumed that under the provisions of this bill all students in all counties are to be retained in an education program of some type. Two major sources (agency survey and federal report) are used for estimating the total numbers of students who would be retained, which would include both out-of-school suspensions and expelled students. Other sources (juvenile probation commission, criminal justice council) provide data on adjudicated students enrolled in juvenile justice alternative programs. Data on suspensions and expulsions was gathered over a 3-year period on 1100 district applications in compliance with the Drug-Free Schools and Communities Act. These reports show total expulsions to increase from 12,000 to 17,000 between the school years ending in 1994 and 1995. For the 1995-96 school year, reports showed a drop-off to 6,266 expulsions. Those reports also show that, over the same 3-year period, districts reported approximately 213,000 student out-of-school suspensions in 1996, an increase of approximately 70,000 students over 1994 district reports (142,000). Actual data on the number of students suspended and the number of days is unknown. The Texas Education Agency's 1995-96 Safe Schools Survey collected district data on student placements, attendance, and expulsions in district alternative programs; districts reported 6,210 student expulsions statewide for 1995-96, and 5,601 actual students expelled. Estimates on future JJAEP populations vary from 1,500 (TJPC) to approximately 4,000 (Criminal Justice Policy Council) per year. Based on data projected by the State Auditor's Office on the number of students to be served in the current (initial) year, the Texas Education Agency uses the estimate of 2,400 students served in the county JJAEPs under current law. Based on agency and federal data, the agency further assumes that the number of students expelled during the current year but not accounted for in JJAEP enrollments would result in approximately 3,200 students (5,600 - 2,400) added to the Foundation School Program (FSP) under the provisions of this bill. Based on the agency survey, the average student expulsion period (55 days), multiplied by $27.22 per day per 3,200 students, would project state FSP enrollment costs increases by about $4.8 million annually. Estimates on students retained out of data on out-of-school suspensions also varies. Agency estimates assume that, last year, approximately 200,000 students were suspended for 2 days; however, the federal data is unevenly reported, including both numbers of "students" suspended in some districts and the total number of "days" suspended in others. A middle ground estimate, therefore, would be to estimate 200,000 "students" suspended for 1.5 days. At $27.22 per day, total costs to the state for retaining suspended students would be approximately $8.2 million annually. Agency estimates on student transportation are based on additional costs for transporting 3,200 students to JJAEPs/AEPs at an average of 570 miles per student in alternative education programs per year, at an average state funding rate of $.97 per mile assumed for the purposes of estimating costs associated with this bill. Assuming 55 days of additional transportation per student to any alternative education setting as proposed under this bill, at 3.17 miles per student per day, total state costs for additional transportation would be approximately $541,000 annually. No significant additional costs are anticipated as a result of this bill for assessing progress of additional students in the accountability system, regardless of student placement in regular or alternative setting. Also, no significant additional costs are anticipated for data collection on students attending in district alternative education settings. Current appropriations adopted for the 1998-99 biennium for all Safe Schools legislation total approximately $50 million; of this amount, $36 million is allocated to the Texas Education Agency for district alternative education programs (where students are retained in the Foundation School Program), and $14 million to the Texas Juvenile Probation Commission for county juvenile justice alternative education programs. 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 ($13,541,000) 1998 (13,541,000) 2000 (13,541,000) 2001 (13,541,000) 2002 (13,541,000) Net Impact on General Revenue Related Funds: The probable fiscal implication to General Revenue related funds during each of the first five years is estimated as follows: Fiscal Year Probable Net Postive/(Negative) General Revenue Related Funds Funds 1998 ($13,541,000) 1999 (13,541,000) 2000 (13,541,000) 2001 (13,541,000) 2002 (13,541,000) Similar annual fiscal implications would continue as long as the provisions of the bill are in effect. Fiscal implication to units of local government is outlined as follows: Some costs could be anticipated for large urban school districts which would be expected to have large numbers of expelled or suspended students retained. However, these accumulations may not be significant at the district level, and the actual numbers may not be known. For example, figures reported in the Legislative Budget Board Staff Performance Report to the 75th Legislature and in the agency's 1996 survey showed the number of students expelled in Houston ISD reported total 290, 310, and 729 students for the 1995-96 school year. Other large districts reported relatively low but widely varying totals across districts on estimates of expelled students for that school year: San Antonio ISD, 43; Dallas ISD, 171; Northside ISD, 87; El Paso ISD, 18; Ysleta ISD, 48 (expelled students only for serious on-campus offenses); Corpus Christi ISD, 158; Fort Worth ISD, 66; Austin ISD, 55 (expelled students only for serious on-campus offenses). Similarly, local costs associated with additional alternative education setting placements will also vary, and may not be significant, based on the number of days districts elect to send students to alternative programs. The education agency statewide estimates high local costs ($12 million), but also assumes that the provisions of this bill will increase student placements in alternative programs from an estimated 22-day placement to 158 days per student. However, data from the agency's 1996 survey do not support agency estimates. The agency's survey shows Houston ISD averages only 2.74 days assigned per student in AEPs, and only 2.2 days actual student attendance. Across all urban districts, which the agency may anticipate to have higher increased costs associated with repeat student assignments to alternative settings, students were assigned to AEPs for an average of 12 days, but attended 8.5 days. Also, other local costs that may be associated with additional parent/teacher/principal conferences for students prior to placement in an alternative setting, attendance data gathering for alternative settings, additional costs to local systems to support PEIMS submissions, similarly would be shown to be insignificant on an individual district basis. However, additional state funds are appropriated for the 1998-99 biennium ($36 million) for costs associated with the safe schools provisions under Chapter 37, Education Code, which comprise the whole of this bill. Additional costs to county programs may be anticipated based on requirements for courses necessary to meet graduation requirements (instead of current provision for basic courses), or extended year 224-day programs, or student options for staying in the county education setting instead of returning to the regular district education setting. However, additional moneys currently appropriated for the 1998-99 biennium ($14 million) to the Juvenile Probation Commission for juvenile justice alternative education programs would be anticipated to cover additional costs required under the provisions of this bill. Source: Agencies: LBB Staff: JK ,DH ,TH