LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
May 11, 2001
TO: Honorable Teel Bivins, Chair, Senate Committee on
Education
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB6 by Dunnam (Relating to open-enrollment charter
schools.), Committee Report 2nd House, Substituted
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB6, Committee Report 2nd House, Substituted: negative impact of *
* $(696,048) through the biennium ending August 31, 2003. *
* *
* 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 *
* 2002 $0 *
* 2003 (696,048) *
* 2004 (1,044,072) *
* 2005 (1,392,096) *
* 2006 (1,740,120) *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Probable Change in Number of *
* Year Savings/(Cost) from Savings/(Cost) from State Employees from *
* General Revenue Fund Federal Funds - FY 2001 *
* 0001 Federal *
* 0555 *
* 2002 $0 $0 0.0 *
* 2003 (696,048) (481,100) 17.0 *
* 2004 (1,044,072) (721,650) 25.5 *
* 2005 (1,392,096) (962,200) 34.0 *
* 2006 (1,740,120) (1,202,750) 42.5 *
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Fiscal Analysis
The bill as substituted adds a new subchapter E to Chapter 12 of the
Education Code. This subchapter authorizes governing boards of public
senior colleges or universities and the governing bodies of
municipalities or counties to grant open-enrollment charters. The
charters would be required to forward three percent of their revenues to
the creating entity for administration of the subchapter. The Texas
Education Agency (TEA) would remain the agent responsible for funding,
compliance monitoring and auditing of these charters.
It is estimated that, as a result of this bill, approximately 170 new
charter schools will open in the 2002-03 school year. TEA would need an
additional 17 professional staff, $696,048 in supporting general
revenue, and $481,100 in federal funds to perform the funding
administration, compliance monitoring, and auditing of these new charter
schools. These full-time equivalent employees (FTE's) and the
accompanying costs are estimated to increase steadily each year
thereafter.
Methodology
TEA estimates that, for every ten additional charters in operation,
approximately one additional staff member is needed, spread across
several functional areas of the agency, including compliance monitoring,
school funding, and charter support.
For the purposes of this fiscal note, it is estimated that each of the
state's 35 public general academic institutions would start one charter,
in each biennium. It is assumed that that about ten percent of the 1,194
incorporated municipalities and five percent of the 254 counties would
authorize one charter each during each biennium. Under these
assumptions, the total new charters available for operation in the
2002-03 school year is 170.
The 170 new charter schools would entail 17 additional professional staff
at TEA at an average pay grade of B12 for fiscal year 2003.
Approximately 46 percent of the funding needed to support these FTE's is
expected to be available from federal sources related to compliance
monitoring for the use of federal funds. Therefore, the 2003 general
revenue cost of the additional staff, including travel, is $696,048, and
the cost to federal funds is $481,100.
It is expected that 170 new charters would open each biennium after the
2002-2003 biennium (between 80 and 90 a year), and TEA FTE's needs would
increase correspondingly. Fiscal implications to TEA would likely
continue beyond 2006 and increase as the number of charters authorized
increases.
Local Government Impact
School districts that lose student population to open-enrollment and
college/university, municipal, or county charter schools would
experience a loss of revenue as a result. It could generally be
expected that there may be some savings in costs to those districts as
the service population decreases in size.
Source Agencies: 701 Texas Education Agency
LBB Staff: JK, CT, PF, JM