LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session April 16, 2001 TO: Honorable Paul Sadler, Chair, House Committee on Public Education FROM: John Keel, Director, Legislative Budget Board IN RE: HB3131 by King, Phil (Relating to a virtual classroom program for certain public school students.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB3131, As Introduced: negative impact of $(15,929,394) 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 $(6,631,758) * * 2003 (9,297,636) * * 2004 (11,963,515) * * 2005 (14,596,454) * * 2006 (17,262,333) * **************************************************** All Funds, Five-Year Impact: ************************************************************************** *Fiscal Probable Probable Change in Number of * * Year Savings/(Cost) from Savings/(Cost) from State Employees from * * General Revenue Fund Foundation School FY 2001 * * 0001 Fund * * 0193 * * 2002 $(6,500,000) $(131,758) 2.0 * * 2003 (9,100,000) (197,636) 3.0 * * 2004 (11,700,000) (263,515) 4.0 * * 2005 (14,300,000) (296,454) 4.5 * * 2006 (16,900,000) (362,333) 5.5 * ************************************************************************** Fiscal Analysis The bill authorizes school districts to operate a virtual classroom program on an extended year basis, not to exceed 45 additional days. The bill also requires the Texas Education Agency (TEA) to monitor, evaluate, and assess the development and implementation of each virtual classroom program. Methodology According to the TEA, there are approximately 2,500 campuses offering the grades at which the virtual classroom program could be implemented. It is assumed that in fiscal year 2002, five percent of campuses would create a program (125 campuses), and that each year thereafter, an additional two percent of campuses (50 campuses) would implement a new program. It is further assumed that 40 students at each site would generate extended year funding worth $1,300 each (approximately 1/4th of a year of funding). In fiscal year 2002, 40 students at the estimated 125 campuses equals 5,000 students funded on an extended year basis, for a cost to the state of $6,500,000. With an additional 50 campuses (and 2,000 students) each year, state costs are estimated to increase $2,600,000 each year after 2002. Regarding the state costs for monitoring and evaluating virtual classroom programs, the TEA estimates that it would need one additional professional employee for every 60 programs that districts implement. This assumption would mean two such employees in fiscal 2002, with a total salary, benefits, and travel cost of $131,758, and steadily increasing each year thereafter. It is assumed that, at some point after fiscal year 2006, the monitoring and evaluation requirements would require less direct intervention by the TEA staff, and staffing needs would increase more slowly. Local Government Impact School districts that choose to create a virtual classroom environment may be able to realize savings from being able to instruct students with fewer staff. However, there may be higher technology costs associated with the particular virtual classroom design. School districts also should experience higher revenues to the extent extended year arrangements are adopted. Source Agencies: 367 Telecommunications Infrastructure Fund Board, 701 Texas Education Agency LBB Staff: JK, CT, PF, JM