LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
April 21, 1997
TO: Honorable Teel Bivins, Chair IN RE: Senate Bill No. 1206, Committee Report 1st House, Substituted
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 the 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-Committee Report 1st House, Substituted
Implementing the provisions of the bill would result in a net
impact of $0 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 create a public education scholarship program
open to any student assigned to attend a public school in which
less than 50 percent of the students passed the TAAS reading,
writing, or math tests in each of the preceding three years,
who also failed the tests, who had been denied enrollment in
another district after requesting a grant under the Public Education
Grant (PEG) program under Section 29.201 of the Education Code,
and who was not enrolled in a private or free school during
the current or preceding school year unless the child attended
a free school using a public education scholarship.
The
scholarship amount would be the sum of state and local revenue
per student with some allotments and adjustments, including
all district-level adjustments, not included. If a student
chose to attend a free school (any school that accepted state
and local funding in lieu of tuition), 80 percent of that scholarship
would be sent from the district of residence to the free school.
The school district the child would otherwise have attended
would be entitled to the remainder of the child's scholarship
funds. Scholarships would not be redeemable by home schoolers
or at private schools, i.e., those schools that do not accept
state and local funding in lieu of tuition.
Under this bill,
free schools would fill positions by lottery if there were more
applicants than spaces available. The schools would not be
permitted to charge a student receiving a scholarship more than
the amount of the student's scholarship, although they would
be permitted to charge certain fees. Free schools would be
required to provide special education and bilingual education
services in the same manner as public schools. Students attending
free schools would be required to participate in standardized
state testing. The bill would require free schools to be accredited
by any organization recognized by the Commissioner of Education.
The district in which a student resides would be responsible
for providing transportation to the school the student would
otherwise have attended. The free school would be required
to provide transportation from that school to the free school.
The free school also would responsible for providing a free
lunch to scholarship recipients.
A body selected by the
State Board of Education would be responsible for evaluating
this scholarship program.
Section 29.367 directs the Comptroller
of Public Accounts to adopt rules, procedures, and forms for
the payment of public education scholarships to the free schools
on behalf of parents of students attending free schools. The
Comptroller also would adopt rules, procedures, and forms for
a free school to submit to review the financial operations of
the school. The Comptroller could determine that a free school
was not eligible to continue receiving funds if the school failed
to satisfy generally accepted standards of fiscal management.
The Comptroller may incur costs associated with this section.
The Commissioner of Education, the State Board of Education,
and the Comptroller would be prohibited from regulating the
program of free schools except as necessary to ensure compliance
with this title or federal law regarding special education.
Section
29.203 modifies the financial provisions for the existing public
education grant program to increase a student's public education
grant to the amount of state and local funding in the receiving
district if that amount was higher than that of the sending
district. This provision is not expected to have a fiscal
implication.
Methodolgy
It is estimated that approximately 60,000 students would meet
the eligibility requirements set out in Section 20.352. Based
on survey data from the 1995-96 school year, this estimate assumes
that 20% of PEG population would actually seek participation
in the program. The total potential population is therefore
assumed to be 12,000 students.
Section 29.355 as added
by the bill establishes the amount of the scholarship. A statewide
average for this amount would likely be about $4,450 per ADA,
although it would be less for students that are not special
education eligible, and more for special education students.
School districts would pay 80% of the identified amount to
the free school under rules adopted by the comptroller. Because
the students for whom the payment would be made are already
in public schools, this fiscal note assumes that there would
be little if any additional cost to the state for the scholarships.
The
bill does not describe responsibilities for payment of test
program costs by free schools. For the purposes of this fiscal
note, it was assumed that test costs would be funded by the
current set-aside method.
Section 29.366 requires an annual
evaluation of the scholarship program. This evaluation is estimated
to cost $75,000 each year. Because the evaluation requires
review of performance data, it is appropriate to begin the evaluation
in 1999-2000.
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 General
Revenue Fund
0001
1998 $0
1998 0
2000 (75,000)
2001 (75,000)
2002 (75,000)
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 $0
1999 0
2000 (75,000)
2001 (75,000)
2002 (75,000)
Similar annual fiscal implications would continue as long as
the provisions of the bill are in effect.
Public school districts will be required to fund the scholarship
of eligible students. Local costs will average approximately
$3,560 (80% of $4,450) although more for special education students,
and less for others.
School districts will continue to receive
state funding for each student in a free school, which will
average $4,900 per student, or higher for special education
students. School districts may have decreased operating costs
to the extent that fewer students will be present in the district
to receive educational services. Due to the restrictive nature
of the program (only students in certain low performing campuses
are eligible) and the provision that districts retain both the
district adjustments and 20% of the scholarship amount, the
payment of scholarships may have little net impact on the ability
of school districts to serve the remaining population. School
districts in most cases will receive more state aid for eligible
students than the amount of scholarship payment to a free school.
Source: Agencies: 304 Comptroller of Public Accounts
LBB Staff: LP ,UP