LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 10, 2001
TO: Honorable Paul Sadler, Chair, House Committee on Public
Education
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB2955 by Hardcastle (Relating to certain public school
students receiving educational services from a school
district other than the district in which the students
reside.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB2955, As Introduced: negative impact of $(13,200,000) 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 $(6,600,000) *
* 2003 (6,600,000) *
* 2004 (6,600,000) *
* 2005 (6,600,000) *
* 2006 (6,600,000) *
****************************************************
All Funds, Five-Year Impact:
*****************************************************
* Fiscal Year Probable Savings/(Cost) from *
* Foundation School Fund *
* 0193 *
* 2002 $(6,600,000) *
* 2003 (6,600,000) *
* 2004 (6,600,000) *
* 2005 (6,600,000) *
* 2006 (6,600,000) *
*****************************************************
Fiscal Analysis
The bill changes the computation of tuition limits for certain districts
and the counting of students for purposes of determining the wealth level
of districts for purposes of Chapter 41.
The bill allows districts to agree to a higher level of tuition than
permitted under Commissioner's rules for students that transfer to
neighboring school districts because their grades are not offered in the
district of residence.
Students that transfer to a neighboring school, because their grades are
not offered in the district of residence could be counted by the district
of residence for purposes of determining property wealth per weighted
student.
The bill allows a property-wealthy school district to receive a credit
for its tuition expenses against its cost to exercise a Chapter 41 option
only if the district provides instruction in kindergarten through grade
12.
Section 41.124(c) is repealed. This section currently restricts the
ability of a district receiving and educating transfer students from
being funded in the district providing services if tuition is received
from the property-wealthy sending district.
Methodology
Section 1 of the bill allows districts to agree to higher tuition rates
than permissible in current rules. The level of increased costs would
depend on local agreements, and therefore a precise estimate of
additional cost cannot readily be determined. The Texas Education Agency
(TEA) anticipates that, based on a few arrangements that have
traditionally existed, the cost to the state of this provision would
exceed $2 million per year.
The bill allows a property-wealthy district not offering all grades and
paying tuition for the education of its resident students outside the
district to count the students in the measurement of its property-wealth.
In the current year, there are 39 districts that are receiving no
credit for the students that have transferred to a neighboring district.
TEA estimates that the change in this section would result in a
reduction in recapture receipts of about $8.0 million for about 2200
additional WADA that would be credited to the district of residence.
The bill would allow a credit for tuition payments in the reduction of
Chapter 41 recapture expenses only if the paying district provides
education in all twelve grades. For the most part, districts providing
all twelve grades generally do not pay tuition for the education of their
students in neighboring school districts. It is not expected that this
change will create a significant cost for the state. Under current law,
any property wealthy district may receive a credit for tuition paid for
education of its above-grade students, but that credit is subject to
commissioner's rules that limit the amount of tuition that may be
charged. Removal of the authorization for above-grade tuition to be
treated as a credit against recapture expenses would likely reduce the
current credits by $3.4 million, thereby producing more revenue for the
state and offsetting some of the costs described above.
The estimates above are based on current populations and property values,
and could change significantly in any given year.
Local Government Impact
Certain school districts would experience a positive fiscal impact as a
result of the bill.
Source Agencies: 701 Texas Education Agency
LBB Staff: JK, CT, PF, UP