LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session May 13, 1997 TO: Honorable Paul Sadler, Chair IN RE: Senate Bill No. 1893, As Engrossed Committee on Public Education By: Bivins House Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on SB1893 ( Relating to the number of days of service required of certain educators for the school year.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by SB1893-As Engrossed The bill could result in a savings to General Revenue from a reduction of anticipated Teacher Retirement System liability of as much as $28,800,000 for the 1998-1999 biennium. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill. The bill would amend the section of the Texas Education Code related to the minimum number of days for teacher service. The daily rate of pay for teachers was estimated by summing base pay of teachers in 1997 ($8.2 billion) and dividing by 1997 FTEs (253,000) and days of employment (185). Under current law, the minimum days of service for teachers would increase by an estimated 7 days from 1997 to 1998. The bill would reduce this number to 2 days. While current law does not require districts to increase teacher pay proportionally for an increase in the minimum days of service, districts may increase teacher pay if the number of required working days increases. The proportional cost of a seven day increase is $310 million, whereas a two day increase would cost only $88 million. As a result, anticipated Teacher Retirement System liability might be reduced by $14.4 million per year as a result of this bill. The difference in minimum days of services between 1998 and 1999 is 5 days. The bill would reduce the expected minimum days of service by 5 days in both 1998 and 1999. Because districts receive no state funds based on the minimum service days, any increase to teacher salaries would be the responsibility of the local district. The daily rate of pay statewide for 1997 was $44.3 million. If districts increase minimum service days by 2 instead of 7 for 1998, the potential savings is estimated to be $221.6 million. The potential savings is likely to be the same for 1999. Source: Agencies: 701 Texas Education Agency - Administration LBB Staff: JK ,DH ,LP