LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session April 4, 2001 TO: Honorable Paul Sadler, Chair, House Committee on Public Education FROM: John Keel, Director, Legislative Budget Board IN RE: HB79 by Gallego (Relating to computation of the number of educationally disadvantaged students in certain public school districts.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB79, As Introduced: negative impact of $(9,600,000) 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. * ************************************************************************** General Revenue-Related Funds, Five-Year Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2002 $(4,800,000) * * 2003 (4,800,000) * * 2004 (4,800,000) * * 2005 (4,800,000) * * 2006 (4,800,000) * **************************************************** All Funds, Five-Year Impact: ***************************************************** * Fiscal Year Probable Savings/(Cost) from * * Foundation School Fund * * 0193 * * 2002 $(4,800,000) * * 2003 (4,800,000) * * 2004 (4,800,000) * * 2005 (4,800,000) * * 2006 (4,800,000) * ***************************************************** Fiscal Analysis The bill authorizes the commissioner to adopt rules that would allow for counting certain students for compensatory education allotment purposes (Texas Education Code 42.152) that are educated in districts or schools that do not participate in the national school lunch program. Under current law, the basis for funding most of the compensatory education allotment is the best six-month average of participation in the national school lunch program. Methodology At the present time, there are 81 school districts or open-enrollment charter schools eligible for participation in the Foundation School Program that do not participate in the national school lunch program. For the 1999-2000 school year, there were 12,795 students enrolled at those school districts and open-enrollment charter schools, of whom 1,796 were reported as low-income. There are 113 individual campuses that have chosen not to participate in the program in districts that do have some participation. For the 1999-2000 school year, there were 18,164 students enrolled at these schools, of whom 2,563 were reported as low-income. Within the Foundation School Program, the average amount allotted by the compensatory education allotment is $569. Because the districts that do not participate in the school lunch program are generally small, an average allotment of $700 is assumed for purposes of this estimate. Each student would generate additional funding through the guaranteed yield program, estimated at approximately $400. Because the funding implications of this bill depend upon on the precise wording of a rule yet to be adopted, this estimate can approximates the final result. Using the low-income students reported in 1999-2000 at campuses and districts not participating in the national school lunch program as a guide for the number of students that would qualify under a commissioner rule, the impact would be approximately $4.8 million in additional annual state costs. Local Government Impact School districts would receive additional revenue in the same amount reflected as a state cost. The additional revenue stream would continue beyond the five-year time period covered by this fiscal note. Source Agencies: 701 Texas Education Agency LBB Staff: JK, CT, PF, RN