LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 17, 2001
TO: Honorable Paul Sadler, Chair, House Committee on Public
Education
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB1570 by Coleman (Relating to eligibility for public
school prekindergarten classes.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB1570, As Introduced: negative impact of $(77,132,000) 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. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $(38,732,000) *
* 2003 (38,400,000) *
* 2004 (38,890,000) *
* 2005 (38,400,000) *
* 2006 (38,400,000) *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Savings/(Cost) from Probable Savings/(Cost) from *
* Year Foundation School Fund State Textbook Fund *
* 0193 0003 *
* 2002 $(38,400,000) $(332,000) *
* 2003 (38,400,000) 0 *
* 2004 (38,400,000) (490,000) *
* 2005 (38,400,000) 0 *
* 2006 (38,400,000) 0 *
***************************************************************************
Fiscal Analysis
The bill expands eligibility for pre-kindergarten programs within the
Foundation School Program. Under current law, students who are
"educationally disadvantaged," homeless, or unable to speak or comprehend
English are eligible for pre-kindergarten services. The bill would
amend eligibility to strike "educationally disadvantaged" and replace it
with "has a family income that is not more than 200 percent of the
federal poverty level."
"Educationally disadvantaged" is defined as being eligible for the
federal free or reduced price lunch program. Eligibility for the free
lunch program is a family with an income of 130% of the federal poverty
level (about $22,165 for a family of four) and eligibility for the
reduced price lunch program is a family with an income of 185% of the
family poverty level (about $31,543 for a family of four). The bill
increases the threshold for pre-kindergarten eligibility to 200% of
poverty, or about $34,100 per year for a family of four.
Methodology
The Texas Education Agency estimates that, based on the average
proportion of pre-kindergarten students that qualify for reduced price
lunches it is assumed that a similar number, about 16,000 additional
children, would qualify and enroll in pre-kindergarten each year under
the revised qualification.
Based on an assumption that there is limited capacity in the number of
teachers and sections of pre-kindergarten available, it is assumed that
an additional 400 new sections and 200 teachers would be needed to meet
the increase in prekindergarten enrollment. The curriculum/textbook
estimate is based on the cost of teacher-based learning systems currently
adopted for pre-kindergarten. The average cost of these systems is
about $1,660 per teacher for fiscal year 2002. Materials scheduled for
new adoption will be implemented in school districts in fiscal year 2004
at an anticipated cost of about $2,450 per teacher.
The bill would have a significant effect on state aid generated under the
Foundation School Program. It is estimated that an additional 16,000
students would be added to the system, generating about $38 million
annually. The bill would also result in an increase in costs associated
with textbook materials of about $332,000 in fiscal year 2002 and
$490,000 in fiscal year 2004.
An estimated 200 additional, full-time teachers would be needed. The
state makes contributions to the Teachers Retirement System (TRS) at a
rate of six percent of teacher salary, up to the minimum salary schedule
amount. The state also contributes 0.5 percent of all teacher salary
for TRS-Care, a health insurance program for retired teachers. 200
teachers with an average salary of $38,400 (the current statewide
average) would be $7,680,000 in additional salary costs to school
districts; 6.5 percent of this amount, adjusted downward to account for
the minimum salary schedule limit, is approximately $400,000 in TRS
costs annually.
Local Government Impact
School districts with qualifying students would receive an increase in
state aid. While districts would have increased staff costs, the
additional state aid would offset the cost of additional staff.
It is likely that there would also be facilities needs statewide. Local
school districts have varying ability to absorb additional students.
Based on the limited capacity statewide, it is assumed that school
districts would only need to add about 400 new sections and 200 teachers.
Assuming some inefficiency, the 400 new sections are assumed to
translate to about 275 new classrooms.
Costs per section for pre-kindergarten are estimated to be about $80,000
per classroom. It was assumed that most districts would be unable to
house new sections in existing facilities, since anecdotal evidence
suggests that many districts allow two half-day sections to share the
same space. Likewise, some inefficiency in the use of new facilities was
assumed since not all districts would realize enrollment equal to two
half-day sections.
Because the bill is silent concerning additional facilities costs, it is
assumed that these costs would be largely local costs. The combined
cost of facilities as estimated above would be about $22.0 million.
Source Agencies: 701 Texas Education Agency
LBB Staff: JK, CT, PF, UP