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: HB2879 by Sadler (Relating to public school finance.),
Committee Report 2nd House, Substituted
**************************************************************************
* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB2879, Committee Report 2nd House, Substituted: negative impact *
* of $(386,100,000) 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 $(179,500,000) *
* 2003 (206,600,000) *
* 2004 (206,600,000) *
* 2005 (206,600,000) *
* 2006 (206,600,000) *
****************************************************
All Funds, Five-Year Impact:
*****************************************************
* Fiscal Year Probable Savings/(Cost) from *
* Foundation School Fund *
* 0193 *
* 2002 $(179,500,000) *
* 2003 (206,600,000) *
* 2004 (206,600,000) *
* 2005 (206,600,000) *
* 2006 (206,600,000) *
*****************************************************
Fiscal Analysis
The bill makes substantive changes to the Foundation School Program.
Sections 1 and of the bill increase the Equalized Wealth Level (EWL) from
$295,000 per weighted student to $300,000 per weighted student in 2002
and to $305,000 in 2003.
Section 3 of the bill provides an alternate method of computing average
daily attendance (ADA) for certain districts that have significant
declines in ADA from one year to the next. School districts that
experience declines in ADA exceeding two percent from one year to the
next would be funded on the basis of 98% of the prior years actual ADA,
if the decline is not due to the closure or reduction in personnel at a
military base.
Section 4 of the bill allows expands the eligibility criteria for the
Existing Debt Allotment (EDA) by including debt for which taxes were
levied and collected in the 2000-01 school year.
Section 5 of the bill increases from $0.12 to $0.29 the number of pennies
of a district tax rate which may be equalized under the EDA.
Methodology
Sections 1 and 2 of the bill increasing the Equalized Wealth Level reduce
anticipated recapture payments from impacted school districts and
therefore results in a cost to the state of $102 million for the 2002-03
biennium.
Section 3 of the bill provides additional state aid to school districts
experiencing precipitous declines in average daily attendance. TEA
estimates that the adjustment described by the bill would cost the state
of approximately $25 million per fiscal year.
Sections 4 and 5 of the bill impact the cost to the state of the Existing
Debt Allotment. Section 4 is estimated to increase state aid by
approximately $150 million for the 2002-03 biennium, and section 5 is
estimated to increase state aid by approximately $84 million for the
biennium.
Local Government Impact
The provisions of the bill generally increase available revenues to
school districts.
Source Agencies:
LBB Staff: JK, CT, UP