LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
March 19, 1997
TO: Honorable Teel Bivins, Chair IN RE: Senate Bill No. 1206
Committee on Education By: Bivins
Senate
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on SB1206 ( Relating
to creation of a public education scholarship pilot program
for children assigned to attend certain low-performing public
schools.) this office has detemined the following:
Biennial Net Impact to General Revenue Funds by SB1206-As Introduced
Implementing the provisions of the bill would result in a net
negative impact of ($8,160,600 - $16,160,600) 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 add subchapter J to Chapter 29 of the Texas Education
Code(TEC), creating a pilot program to allow students in certain
circumstances to receive a public education scholarship. These
scholarships could be used by the student to attend a "free
school," defined as a nongovernmental educational establishment
for elementary and secondary students that accepts funding from
state and local sources in lieu of tuition for some or all of
its students.
To be eligible for a scholarship (section 29.352),
the child must have sought to attend a different public school
district under the Public Education Grant (PEG) criteria in
section 29.201. If the district selected under that section
rejects the child, the child is then eligible for the scholarship
program set out in the bill.
A child eligible to attend
school in a school district (section 25.001) but who attends
a free school shall be considered in determining the district's
average daily attendance(ADA). The commissioner shall adopt
a procedure by which free schools shall report the attendance
of scholarship students attending the school.
The scholarship
is the amount of state and local funding per student for the
district in which the child resides. Section 29.355 (b) defines
the state portion as the district's textbook funding, the basic
allotment (TEC chapter 42) , the special program allotments
(excluding the transportation allotment) guaranteed yield funding
and facilities assistance. The local funding calculation depends
on the special education classification of the student. For
special education students, the local funding amount is the
average expenditure of local and federal funds received for
students with disabilities (other than students in residential
care arrangements). For non-special education students, the
local portion is equal to the average expenditure of local funds
per student, minus the amounts used to calculate the funding
for special education students.
An eligible child attending
a free school is entitled to 80% of the scholarship amount as
defined above.
The free school must develop an Individual
Education Plan (IEP) for special education students in attendance.
If a parent objects to IEP, the free school must submit the
plan for review by the Commissioner of Education.
Each free
school shall submit information under the Academic Excellence
Indicator System to the Commissioner. Each free school shall
administer the TAAS , and the Commissioner shall report the
results of the assessment in such a way as to allow comparisons
between the performance of students in the free school and the
performance of students in public schools.
The State Board
of Education shall designate an impartial organization with
experience in school choice programs to conduct an annual evaluation
of this pilot program.
Methodolgy
In the 1996-97 school year, 382 campuses, enrolling 238,000
students, met the low-performance criteria set out in chapter
29, subsection G (Public Education Grant Program). This estimate
assumes that 20% of PEG program students would be rejected by
public school districts based on survey data from the 1995-96
school year. The total potential population is therefore assumed
to be about 47,600 students.
Certain ambiguities in the bill
yield two separate state cost scenarios and a situation of overlapping
funding for the same child. The first scenario (table 1) results
in a funding level of $4,200 per ADA, based on an interpretation
of section 29.355 that state assistance includes textbook funding
and the formula cost of the Foundation School Program per child
but not the transportation allotment or any of the district
adjustments. The second scenario (table 2) yields an amount
of $2,100 per ADA, based on an interpretation of section 29.355
(b) that only a portion of the state funding to the district
is applicable.
Section 29.354 funds the child in the school
district of residence. Section 29.355 establishes an amount
to be paid to the free school by the Comptroller under section
29.367, in addition to the funding which flows through the Foundation
School Program to the school district. The additional cost
to the state of each child receiving a scholarship is therefore
80% of either $2,100 or $4,200, depending on the interpretation
of the scenarios outlined above. The total potential cost to
the state is therefore $80 to $160 million, again depending
on interpretation of the state portion of the scholarship.
Local expenditures are estimated to be $3,837 for each special
education student and $2,700 for each regular program student.
The
cost associated with the program in this estimate is less than
the maximum potential cost. The program is new, and therefore
it will likely take time both for free schools to begin participating
in the program and for parents to take advantage of the program.
Therefore, this estimate assumes that only approximately 10%
of the eligible population would choose to participate in the
first year, and that the population will grow at the rate of
10% in each subsequent year.
There is the possibility that
a student currently in a private school could briefly enroll
in a public school in order to become eligible for the scholarship
program. While this could result in a significant cost to the
state, it is impossible to determine the extent of that potential
cost.
The bill represents certain administrative costs to
the Texas Education Agency. The provision requiring the Commissioner
to review IEPs to which a parent objects would likely result
in the case being referred to an independent hearing examiner,
as Federal law is ambiguous as to whether the Commissioner can
approve IEPs. The cost of each hearing is $3,000. If the parents
of 5% of the special education students participating in the
program object to the IEP, the cost would be $85,500.
The
cost of the evaluation of the program is estimated to be $75,000.
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
Savings/(Cost) Savings/(Cost)
from Foundation from General
School Fund Revenue Fund
0193 0001
1998
1998 (16,000,000) (160,600)
2000 (32,000,000) (171,200)
2001 (48,000,000) (256,800)
2002 (64,000,000) (342,400)
Fiscal Year Probable Probable
Savings/(Cost) Savings/(Cost)
from Foundation from General
School Fund Revenue Fund
0193 0001
1998
1999 (8,000,000) (160,600)
2000 (16,000,000) (171,200)
2001 (24,000,000) (256,800)
2002 (32,000,000) (342,400)
Similar annual fiscal implications would continue as long as
the provisions of the bill are in effect.
No significant fiscal implication to units of local government
is anticipated.
Source: Agencies: 701 Texas Education Agency - Administration
LBB Staff: JK ,LP ,UP