LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
March 24, 1999
TO: Honorable Teel Bivins, Chair, Senate Committee on
Education
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB10 by Bivins (Relating to the creation of a public
education scholarship program for certain educationally
disadvantaged children in certain school districts), As
Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB10, As Introduced: negative impact of $(1,042,498) through the *
* biennium ending August 31, 2001. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
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General Revenue-Related Funds, Five-Year Net Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2000 $(378,999) *
* 2001 (663,499) *
* 2002 (1,003,494) *
* 2003 (1,003,494) *
* 2004 (1,003,494) *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Savings/(Cost) from Change in Number of State *
* Year General Revenue Fund Employees from FY 1999 *
* 0001 *
* 2000 $(378,999) 6.0 *
* 2001 (663,499) 6.0 *
* 2002 (1,003,494) 16.0 *
* 2003 (1,003,494) 16.0 *
* 2004 (1,003,494) 16.0 *
***************************************************************************
Fiscal Analysis
The bill would create a public education scholarship system to subsidize
student enrollment in 'free schools.' Only students who live in counties
with over 575,000 residents, are educationally disadvantaged, have
failed the most recent TAAS administration, were not enrolled in a
private school during the previous year, and were not enrolled in a free
school (minus a public education scholarship) during the previous year
are eligible for scholarships.
Students who accept scholarships would still be included in district
attendance counts, yet depending on cost, districts would fund either
scholarships equal to 80% of state and local revenue per student, or an
alternative payment that excludes the available school fund, debt
service, and miscellaneous adjustments.
The bill requires that the Commissioner specify an organization to
accredit free schools, and that free schools report academic excellence
indicator information to the Texas Education Agency (TEA). The
Comptroller would be charged with the adoption of payment procedures for
public education scholarships.
The State Board of Education would be directed to implement the new
scholarship program in school year 2000-2001.
Methodology
The bill would limit participation in the public education scholarship
program to students who are already enrolled in public schools.
Foundation School Program costs associated with regular program students
would, therefore, not be affected. However, the bill would provide state
funding for bilingual education to recipients of public education
scholarships. For the purposes of this note, it is assumed that this
funding would not duplicate existing bilingual education aid to
districts.
Cost to general revenue would be $1.042 million for the 2000-2001
biennium, and would be created exclusively through new administrative
duties for the Comptroller's Office and TEA.
The Comptroller's office estimates that the administration of the public
education scholarship program would require two new staff and cost the
state $120,000 in fiscal year 2000 and also in fiscal year 2001. An
additional eight staff would be required in fiscal year 2002 through 2004
at a total cost of $484,730 each year.
The free school academic accountability provisions in the bill would
require new staff for the Texas Education Agency. Using charter schools
as a proxy, the agency estimates that four new staff would cost $308,016
during the 2000-2001 biennium. Costs could increase if free school
enrollment grows significantly.
The State Board of Education would be required to seek an independent
multi-year evaluation of the public education scholarship program. This
evaluation would cost $300,000 in fiscal year 2001, dropping to $150,000
per year in fiscal years 2002-2004.
Local Government Impact
TEA estimates that a maximum of 144,000 students would be eligible for
public education scholarships. These students would reside in the school
districts of six Texas counties: Bexar, Dallas, El Paso, Harris,
Tarrant, and Travis Counties. If all 144,000 chose to enroll in free
schools, the districts within the six counties would need to transfer
$645 million in scholarship funds. Under the payment guidelines of the
bill, these districts would retain $160 million, or 20% of total state
aid and local revenue. These estimates are based on an average state and
local revenue of $5,600 per student and a scholarship amount of $4,480.
If, however, the capacity for enrollment in free schools is limited by
availability, the TEA estimates that the districts would transfer $122
million per year and would retain over $30 million. This reduced
estimate is based on the assumption that only 27,200 seats would be
available in free schools.
Although 20% of state and local aid would be retained by districts after
payments for public education scholarships, the net effect is uncertain
for several reasons. First, the responsibility for special education
services to public education scholarship recipients could be left to
local school districts. Further, if public education scholarship
recipients represent a small portion of the total student population, it
is unlikely that districts will be able to significantly reduce
instructional costs. Districts would also be required to maintain
transportation for students who enroll in free schools.
Since the parameters for public education scholarships include total
district tax revenues, it is possible that Chapter 41 districts would be
required to fund scholarships in excess of total state and local revenues
per student.
Districts would also incur costs through the notification of students who
qualify for public education scholarships.
Source Agencies:
LBB Staff: JK, CT, CW