LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 20, 2001
TO: Honorable Paul Sadler, Chair, House Committee on Public
Education
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB972 by Grusendorf (Relating to charter schools and
services provided to charter schools by regional
education service centers.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB972, As Introduced: negative impact of $(697,598) 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 $(232,533) *
* 2003 (465,065) *
* 2004 (930,131) *
* 2005 (930,131) *
* 2006 (1,395,196) *
****************************************************
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 $(232,533) $(198,128) 7.0 *
* 2003 (465,065) (396,256) 14.0 *
* 2004 (930,131) (792,512) 28.0 *
* 2005 (930,131) (792,512) 28.0 *
* 2006 (1,395,196) (1,188,768) 42.0 *
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Fiscal Analysis
The bill authorizes the governing boards of public senior colleges or
universities to award charters. This change would result in the
estimated awarding of 100 charters over the biennium.
The bill also removes the current limit of 20 open-enrollment charters
that may be granted by the State Board of Education (SBOE). It is
estimated that the SBOE would authorize an additional 40 open-enrollment
charter schools as a result.
Methodology
There are ten boards governing the public colleges and universities in
Texas. For purposes of this fiscal note, it is assumed that each board
will authorize ten charter schools in the first biennium. The Texas
Education Agency (TEA) estimates that, for each new charter authorized,
the effect on the support, monitoring and audit functions of the agency
is equivalent to adding about 1/10th of 1% to the workload requirements.
Thus, an additional 100 charters would require ten additional full-time
TEA employees.
It is estimated that the SBOE would authorize an additional 40 open
enrollment charter schools as a result of lifting the limit. This
estimate is based on past performance of the SBOE, which has granted in
excess of 20 charters per year over the past three years, and has 30-40
charter applications currently under review.
However, because it is likely that the charters granted by the governing
boards would not be operational until the 2002-03 school year, TEA
estimates it would need only five additional employees (those related to
charter support) in fiscal year 2002, and the additional five employees
(those related to monitoring and audit) in fiscal year 2003.
The administrative personnel and costs to the TEA for charter support,
compliance monitoring, and audit functions for these new charters would
require $166,095 in additional General Revenue spending in fiscal year
2002 (along with $198,128 in federal funds) and additional supporting,
administrative funds in fiscal year 2003.
TEA would require an additional two administrative personnel and $66,438
in General Revenue in fiscal year 2002 (with $56,608 in federal funds),
and another two employees and corresponding administrative funding
requirements costs in fiscal year 2003. These costs are expected to
increase in the out years as the number of newly awarded charters
increase.
The bill requires college or university charters to forward three percent
of their revenues to the college or university board for administration
of the subchapter. This would appear to be a permanent annual,
renewable flow of revenue, meaning that the charge is not a one-time
fee, but a continuing draw on the charter revenue stream. This draw
would not cost General Revenue.
Local Government Impact
School districts that lose student population to open-enrollment and
college or university charter schools would experience a loss of revenue
of approximately $5,300 per student. It could generally be expected
that there may be some savings in costs to those districts as the
district enrollment falls.
Source Agencies: 701 Texas Education Agency
LBB Staff: JK, CT, JM