LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
March 26, 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 ),
Committee Report 1st House, Substituted
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB10, Committee Report 1st House, Substituted: negative impact of *
* $(802,498) 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 Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2000 $(258,999) *
* 2001 (543,499) *
* 2002 (518,764) *
* 2003 (518,764) *
* 2004 (518,764) *
****************************************************
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 $(258,999) 4.0 *
* 2001 (543,499) 4.0 *
* 2002 (518,764) 6.0 *
* 2003 (518,764) 6.0 *
* 2004 (518,764) 6.0 *
***************************************************************************
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. Enrollment in free schools would be limited
to no more than 5% of total enrollment in eligible districts.
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.
Cost to general revenue would be $802,498 for the 2000-2001 biennium, and
would be created exclusively through new administrative duties for TEA.
The Comptroller anticipates no new significant administrative costs.
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 grew 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 81,000 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 81,000 chose to enroll in free
schools, the districts within the six counties would need to transfer
$362.9 million in scholarship funds. Under the payment guidelines of the
bill, these districts would retain $90.7 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, TEA estimates that the districts would transfer $122
million per year and retain over $30 million. This reduced estimate is
based on the assumption that only 27,200 seats would be available in free
schools.
Free schools would also be entitled to the state aid for bilingual
education associated with scholarship recipients. This would add to the
amount districts transfer for the purpose of public education
scholarships.
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 would be able to significantly reduce
instructional costs. Districts would also be required to provide
transportation to and from free schools for scholarship recipients who
would otherwise receive transportation to public school.
Districts would also incur costs through the notification of students who
qualify for public education scholarships.
Source Agencies:
LBB Staff: JK, CT, CW