LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session April 1, 1997 TO: Honorable Teel Bivins, Chair IN RE: Senate Bill No. 1480 Committee on Education By: Bivins Senate Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on SB1480 ( Relating to the diagnosis of reading development and comprehension at certain grade levels in public school.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by SB1480-As Introduced Implementing the provisions of the bill would result in a net negative impact of $(13,000,000) 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 Fiscal Analysis The bill would provide that the commissioner develop a list of reading diagnosis recommendations for school districts for the kindergarten, first and second grade levels. These recommendations shall address: 1) administering reading instruments to diagnose student reading development and comprehension; 2) training educators in administering the reading instruments ; and 3) applying the results of the reading instruments to the instructional program. The reading assessment instruments are required only if state funds are appropriated. These funds may be used to pay for the cost of administering the reading instrument only if it was on the list adopted by the commissioner. The adoption of the list containing the reading instruments and recommendations must be adopted by the commissioner not later than August 1, 1998. Each school district shall implement a reading diagnosis program in accordance with this section beginning with the 1998-1999 school year. This bill would take effect September 1, 1997. Methodolgy It is estimated that development of a reading assessment program would increase testing contracts and agency administration costs by $6.5 million annually. This bill requires the commissioner 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 funding for reading instruments if not on the commissioner's list. For the purpose of this 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 instrument is dependent upon the type of instrument chosen. 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. One FTE is needed to evaluate the instruments and to reimburse school districts for costs associated with this program. Annual costs of approximately $60,000 include salary, benefits (calculated at 25.21% of base salary), travel and operating expenses. 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 Change in Number Savings/(Cost) of State from General Employees from Revenue Fund FY 1997 0001 1998 ($6,500,000) 1.0 1998 (6,500,000) 1.0 2000 (6,500,000) 1.0 2001 (6,500,000) 1.0 2002 (6,500,000) 1.0 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 ($6,500,000) 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. The fiscal implication to units of local government are described below. School districts will be reimbursed for the costs for administering the reading instruments only if they adopt a reading instrument that is included 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. The bill also proposes recommendations to be developed by the commissioner for teacher training for administering the reading instruments as well as applying the results to the instructional programs. It appears that the training and implementation expenses would be a local cost. It can be argued that a school district could meet these requirements by displacing/eliminating other staff development topics. Daily training costs are estimated at $40 per day per teacher for professionally developed outside training. If a school district adds training sessions, an average of $40 per teacher per day could occur at the local level. The number of teachers that teach K through 2 grades is estimated about 42,000 teachers. Therefore, the cost for staff development would be about $1,680,000 per day under this scenario. Some districts may choose to replace existing professional development programs, which may result in a lower net change in training costs. Source: Agencies: 701 Texas Education Agency - Administration LBB Staff: JK ,LP ,TH