| TO: | Honorable Steve Ogden, Chair, Senate Committee on Finance |
| FROM: | John S. O'Brien, Deputy Director, Legislative Budget Board |
| IN RE: | HB1 by Chisum (Relating to public school finance, property tax relief, public school accountability and programs, and related matters; making an appropriation.), Committee Report 2nd House, Substituted |
| Fiscal Year | Appropriation out of FOUNDATION SCHOOL FUND 193 |
|---|---|
| 2006 | $0 |
| 2007 | $3,825,000,000 |
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2007 | ($3,825,000,000) |
| 2008 | ($8,406,932,048) |
| 2009 | ($9,637,023,711) |
| 2010 | ($9,272,529,651) |
| 2011 | ($9,670,189,329) |
| Fiscal Year | Probable Savings/(Cost) from GENERAL REVENUE FUND 1 |
Probable Savings/(Cost) from FOUNDATION SCHOOL FUND 193 |
Probable Revenue Gain/(Loss) from School Districts |
Change in Number of State Employees from FY 2007 |
|---|---|---|---|---|
| 2007 | ($74,920,564) | ($3,750,079,436) | ($1,666,400,000) | 18.0 |
| 2008 | ($58,396,048) | ($8,348,536,000) | ($5,753,900,000) | 18.0 |
| 2009 | ($112,037,711) | ($9,524,986,000) | ($5,692,300,000) | 18.0 |
| 2010 | ($114,323,651) | ($9,158,206,000) | ($5,620,900,000) | 18.0 |
| 2011 | ($112,932,921) | ($9,557,256,408) | ($5,538,400,000) | 18.0 |
The bill provides state aid to school districts in fiscal year 2007, in amounts equivalent to a reduction to their nominal maintenance and operations (M&O) tax rate at 88.67 percent of the M&O rate adopted for the 2005 tax year -- hereafter referred to as the compressed rate. In the fiscal year 2008, state aid is in an amount equivalent to a reduction of 66.67 percent of the district’s 2005 adopted M&O rate. For example, for a district taxing at $1.50 per $100 of valuation in fiscal year 2006, this yields a compressed rate of $1.33 for fiscal year 2007 and $1.00 for fiscal year 2008. For fiscal year 2009 and beyond, the level of state aid is determined by a state compression percentage, as established by the commissioner and based on appropriations from the property tax relief fund, or from another funding source.
The bill entitles districts to state aid sufficient to guarantee state and local revenue per student in weighted average daily attendance (WADA) in an amount equal to the greater of (1) what the district would be entitled to in the 2006-07 school year under current law, or (2) 2006 revenue per WADA, including state aid districts received for property value decline and wealth-sharing arrangements. Districts also are entitled to state funding in amounts of $2,500 for each employee subject to the minimum salary schedule (MSS), and a high school allotment of $207 for each student in average daily attendance in grades 9-12.
This revenue is delivered to districts by an increase the school finance funding formulas to the equivalent of the yield generated by the 88th percentile of WADA, estimated as a Basic Allotment of $2,748, a Guaranteed Yield of $31.95 and an Equalized Wealth Level of $319,500. Districts not receiving their entitlement amount as determined by Section 42.2516 through the formula increases receive additional state aid to raise them to their entitlement. Districts receiving more than their entitlement amount through the formula increases have their state aid reduced to their entitlement amount. For a district subject to recapture, the additional revenue it is entitled to receive to maintain this revenue target may be received as a downward adjustment to its recapture payment.
Pennies of tax effort in excess of the compressed rate – or “enrichment” pennies – have varying levels of equalization and recapture. Enrichment pennies that are below the state compression percentage applied to $1.50 (1.33 in 2007, $1.00 in 2008) earn the same yield as the base tiers – 88th percentile, and any local revenue above that level is recaptured. The first 4 pennies above the state compression rate (from $1.34-$1.37 in 2007) are equalized at the 96th percentile, with no recapture. However, if the state provides funds to equalize these four pennies at some amount less than the 96th percentile, the bill reinstates recapture on those pennies above whatever level at which the state equalizes. Pennies in excess of the first 4 (above $1.37 in 2007) earn a yield of $27.14 per penny per WADA, with recapture on districts with wealth per WADA of 305,000 and over.
In the 2006 tax year (2007 fiscal year), a district's rollback rate (prior to the addition of the current debt rate) is calculated as 88.67 of its 2005 adopted M&O rate plus 4 cents, plus its debt rate. In subsequent years, the rollback rate is set at the lesser of (1) the state compression percentage applied to $1.50, plus 4 cents, plus whatever “enrichment” pennies the district has adopted over its compressed rate, plus its debt rate, or (2) the districts effective M&O tax rate plus 5 cents, plus its debt rate. The bill contains an equivalent rollback provision for districts currently permitted under special law to tax in excess of $1.50. Rates adopted beyond the rollback rate are subject to a rollback election.
The bill would require that the final installment of districts' annual entitlement under the Foundation School Program be made on or before the 25th of August in each fiscal year, beginning in fiscal year 2009.
The bill provides a methodology by which the comptroller shall establish property values in school districts meeting certain criteria.
The bill provides to the
Section 2.01 would authorize the commissioners of education and higher education to establish as many as three centers for education research.
Section 2.02 would require the commissioner of education to contract with a third-party to develop and implement procedures to make all school district and campus level financial and academic performance data available on the Texas Education Agency (TEA) website by August 1, 2007.
Section 2.02 would also require TEA in coordination with the Legislative Budget Board (LBB) to establish an online clearinghouse of information relating to the best practices of school districts for instruction, resource allocation, and business practices.
Section 2.07 would require the commissioner of education to contract with a third party to conduct a review of school district accounting systems.
Section 2.08 would require the State Board of Education (SBOE) to evaluate and report to the legislature by January 1, 2007 the benefits of providing school districts with standard accounting software.
Section 2.09 would require the commissioner to develop annual spending targets for school district expenditures. The bill would require local school boards to pass a resolution in order to exceed the spending targets.
Section 3.01 would establish a statewide electronic student records system according to standards approved by the commissioners of education and higher education to be implemented by the beginning of the 2007-08 school year.
Section 3.07 of the bill would require the commissioner of education to develop a measure of annual improvement in student achievement and would require the reporting of the comparative measure to school districts, teachers, and parents.
Sections 3.15-3.19 would add and amend provisions concerning the accountability system and sanctions imposed on campuses.
Section 3.20 would specify procedures by which a district may challenge an accountability rating or sanction. The process would require the district to appeal the decision to the State Office of Administrative Hearings (SOAH) under the procedures provided under Chapter 2001, Government Code.
Section 4.01 of the bill would require TEA to develop and operate a school leadership pilot program for principals and persons interested in becoming principals in cooperation with a nonprofit organization and in consultation with institutions of higher education with course work focusing on management and business training.
Section 4.02 would entitle certain charter school employees to a salary increase of $2,500 or $2,000 beginning in fiscal year 2007 dependent on the charter school’s participation in the Texas School Employees Group Health Coverage program (TRS-Active Care). The bill would entitle other employees of certain charter schools to a salary increase in fiscal year 2007 of either $500 or $250. The section would provide state aid to support he salary increases to charter schools in fiscal year 2007.
Section 4.04 would entitle certain employees of the Windham school district to a $2,000 salary increase in fiscal year 2007. Section 4.03 would provide additional state aid to the Windham school district in like amounts.
Section 4.05 would provide a $2,500 salary increase in 2006-07 for school district employees subject to the state minimum salary schedule.
Section 4.07 would authorize school districts to provide mentors to each classroom teacher with less than two years of teaching experience.
Section 4.08 of the bill would add new Subchapter N, Chapter 21, Education Code to establish an awards for student achievement program under which the commissioner would provide grants to eligible campuses not to exceed an annual total of $98 million statewide beginning in fiscal year 2007.
Section 4.08 of the bill would add new Subchapter O, Chapter 21, Texas Education Code to establish an educator excellence awards program. The provisions would require the commissioner to provide grants to school districts for the purpose of providing incentive payments to employees under the terms of locally developed awards plans approved by the commissioner.
Section 4.09 would convert the compensation supplement mechanism to an authorization for eligible school district employees to defer a portion of salary for the purpose of contributing to a cafeteria plan or paying health care premiums through premium conversion. Section 4.07 would entitle school district employees who currently are eligible for the compensation supplement but are not subject to the minimum salary schedule to a wage increase of $500 for full-time employees and $250 for part-time employees in fiscal year 2007.
Section 4.10 would entitle school districts to additional state aid sufficient to fund the salary increases to school district full-time and part-time support personnel proposed in Article 4 of the bill.
Section 5.01 would require the commissioner of education and the Texas Higher Education Coordinating Board (THECB) to establish vertical teams composed of high school and higher education faculty for the purpose of aligning the high school curriculum with the higher education curriculum and expectations, including the joint development of courses aimed at assisting students requiring additional preparation in advance of college-level work.
Section 5.02 would direct the State Board of Education to adopt rules to ensure that four years of English, math, science, and social studies are required for graduation and that one or more required courses include a research writing component.
Section 5.04 would establish Texas Governor’s Schools as short-term summer residential programs for high-achieving high school students. Public senior colleges and universities would be eligible to apply to the commissioner of education for grants of up to $750,000 from funds appropriated for that purpose.
Section 5.06 would require the Texas Education Agency (TEA) to develop standards for evaluating the success of high school completion and success and college readiness programs, provide guidance to school districts in establishing these programs, and develop standards for selecting and recognizing school districts with exceptional programs. This section would direct the use of funds received under the high school allotment.
Section 5.08 would require the P-16 Council to develop a college-readiness and success strategic plan to improve college readiness and reduce the need for developmental course work in institutions of higher education. This section would require THECB to implement a course redesign project aimed at improving the delivery and cost-effectiveness of college-level courses.
Section 6.01 would make children of active duty members of the armed forces of the United States or members of the armed forces of the United States who are injured or killed while on active duty eligible for enrollment in state funded prekindergarten classes.
Section 7.02 entitles teachers at the Texas School for the Deaf to assignment stipends for which teachers in the Austin Independent School District are eligible.
Section 8.01 would extend the existence of TEA under the Texas Sunset Act to September 1, 2012.
Section 9.01 would prohibit a school district from receiving a waiver for the requirements for the first day of instruction under Section 25.0811, Texas Education Code.
Section 9.02 would amend section 25.0811(a), Texas Education Code to specify that the first instructional day of the school year may not be before the fourth Monday in August beginning with the 200708 school year.
Section 10.02 would allow students to self-administer prescription anaphylaxis medicine with written authorization from a parent.
Section 11.01 would require that certain local elections be held on the same day.
Section 12.01 would allow students who reside with a student who has been reassigned to a district campus other than the one which the student would attend based on residence for the purpose of receiving special education services to transfer to the same school. School districts would not be required to provide transportation services.
Section 13.01 makes an appropriation of $3.825 billion in fiscal year 2007.
Section 13.02 of the bill would authorize the use of federal funds, including consolidated administrative or innovative program funds, to fund several provisions of the bill. If sufficient federal funds are not available, Section 8.02 authorizes the use of state General Revenue funds.
Section 13.03 would repeal subsection (a) of Rider 97 following the appropriations to TEA in the 2006-07 General Appropriations Act, 79th Legislature, Regular Session, 2005.
Section 13.04 expresses the intent of the legislature that the SBOE rescind Proclamation 2005 and forego future issuances on proclamations for textbook purchases until the legislature has implemented reforms to the manner in which textbooks are purchased.
In fiscal year 2007, this bill results in a total net state cost estimated to be $3,817 million. Of this amount, approximately $2,148 million represents the equivalent of a dollar-for-dollar replacement of state aid for local revenue in the school finance system, at the state compression percentage of 88.67. Another $802 million is the estimated cost of the $2,500 per MSS employee, and $240 million is for the $207 per
Other provisions in the calculation of a district's revenue target, including guaranteeing the higher of 2007 current law revenue or 2006 revenue per WADA, allowing districts to include revenue gained in excess of entitlement from wealth-sharing arrangements, and including revenue for property value decline, add approximately $65 million in state costs in 2007.
The provision allowing districts to access pennies above their compression rate results in additional local revenue and state equalization costs. For fiscal year 2007, it is assumed that districts, on a statewide average basis, access the equivalent of four pennies above their compression rate. Depending on whether the district was taxing at the maximum rate of $1.50 in fiscal year 2006, some or all of the 4 assumed enrichment pennies may be equalized and recaptured at the 88th percentile (for enrichment pennies below $1.33), and some or all of the 4 assumed pennies may be equalized at the 96th percentile with no recapture. It is estimated that state equalization on these four pennies results in a net state cost of approximately $466 million in 2007. Local retained revenue is estimated to increase by $481 million in 2007.
The bill's reduction in district local revenue, combined with the effect of netting out a district's recapture payments against its hold harmless revenue guarantee, reduces recapture payments statewide from an estimated $1.8 billion to a little less than $1.1 billion in 2007.
For 2008 and beyond, state costs of the bill increase significantly, driven primarily by the additional state aid for tax rate compression, down to 66.67 percent of a district’s 2005 adopted rate. State costs related to replacing lost local revenue due to tax compression are estimated to be nearly $6.6 billion in fiscal year 2008. For 2009 and beyond, the state compression rate is based on appropriations from the property tax relief fund and any other revenue source. For the purposes of this fiscal note, it is assumed that the state aid for tax rate compression in 2009 and beyond remains equivalent to the 2008 percentage of 66.67 percent. WADA growth is estimated to increase state costs for tax relief to $6.9 billion in 2009, and costs will continue to rise similarly in the out years. However, for 2009 and beyond, should appropriations for this purpose vary from this estimate, state costs will vary in a corresponding manner. Additionally, out-year increases are enhanced by a revenue benefit certain districts gain by using 2006 revenue per WADA as their revenue target, but are somewhat offset by the bill's revenue target calculation, which limits the revenue benefit certain districts otherwise would receive from property value increases.
Out-year costs of the teacher salary increase and the high school allotment will grow based on growth in MSS employees and high school
The bill would require that the final installment of districts' annual entitlement under the Foundation School Program be made on or before the 25th of August in each fiscal year, beginning in fiscal year 2009, which would incur a state cost of $800 million in fiscal year 2009.
The bill provides a methodology by which the comptroller shall establish property values in school districts meeting certain criteria. Estimated increases in cost to the Foundation School Program resulting from this provision are $300,000 per year beginning in fiscal year 2009.
Section 2.01 would authorize the commissioners of education and of higher education to establish up to three centers for education research. The cost is estimated at $3 million in General Revenue in fiscal year 2007. After the first year, the bill stipulates that the centers be supported through gifts, grants, and fees.
Section 2.02 of the bill would require the commissioner of education to contract with a third-party to develop and implement procedures to make all school district and campus level financial and academic performance data available on the TEA website. The cost is estimated at $750,000 in General Revenue in fiscal year 2007.
Section 2.02 would require TEA in coordination with the Legislative Budget Board (LBB) to establish an online clearinghouse of information relating to the best practices of school districts for instruction, resource allocation, and business practices. The bill would require the TEA to contract with one or more third-party contractors to develop a system of collecting and evaluating best practices or school districts. The bill would authorize the commissioner to purchase curriculum and other instructional tools identified by the clearinghouse for use by school districts. State cost is estimated at $3.5 million in general revenue in fiscal year 2007 and $350,000 in each subsequent year.
Section 2.07 would require the commissioner of education to contract with a third party to conduct a review of school district accounting systems for the purpose of providing recommendations to improve transparency of spending, enhanced information concerning campus spending, and facilitate program evaluations. The commissioner would be required to report the results of the review to the legislature before January 1, 2007. The cost of the review is estimated at $300,000 in General Revenue in fiscal year 2007.
Section 2.08 would require the SBOE to evaluate school district accounting software and report to the legislature by January 1, 2007 the benefits of providing school districts with standard accounting software. The cost of the study is estimated at $2 million in fiscal year 2007.
Section 2.09 would requie the commissioner to develop annual spending targets for school district expenditures. The bill would require local school boards to pass a resolution in order to exceed the spending targets. The estimated cost for developing and maintaining annual spending targets is $1.1 million in General Revenue in fiscal year 2007 and $100,000 in each subsequent year.
Section 3.01would establish a statewide electronic student records system according to standards approved by the commissioners of education and higher education to be implemented by the beginning of the 2007-08 school year. State cost for development is estimated at $2 million in general revenue in fiscal year 2007 with on-going maintenance costs of $300,000 in each subsequent year.
Section 3.07 of the bill would require the commissioner of education to develop a measure of annual improvement in student achievement. The cost to develop the measure is estimated at $2,000,000 in General Revenue in fiscal year 2007.
Sections 3.15-3.19 would add and amend provisions concerning sanctions imposed on campuses, including a requirement that a technical assistance team be assigned to each campus that is rated academically acceptable for the current school year but would be rated academically unacceptable if performance standards to be used in the following school year were applied to the current school year. For campuses that are rated academically unacceptable for two consecutive school years, the bill would require reconstitution and assignment of a campus intervention team or alternative management. If a campus remains academically unacceptable for two consecutive years after reconstitution the bill would require the campus to be closed or placed under alternative management. State costs for the management of intervention operations are estimated at $176,000 in general revenue each year, beginning in fiscal year 2007.
Section 3.20 would specify procedures by which a district may challenge an accountability rating or sanction. The process would require the district to appeal the decision to SOAH under the procedures provided under Chapter 2001, Government code. Assuming the provisions would generate 33 SOAH hearings in fiscal year 2007at a cost of $6,000 per hearing, the cost is estimated at $198,000 in General Revenue in fiscal year 2007. Costs would increase to $360,000 in fiscal year 2008 for an estimated 60 hearings and would be expected to level off to a $150,000 annual cost in subsequent years.
Section 4.01 of the bill would require TEA to develop and operate a school leadership pilot program for principals and persons interested in becoming principals in cooperation with a nonprofit organization and in consultation with institutions of higher education with course work focusing on management and business training. The bill would require the TEA to conduct an evaluation of the program’s effectiveness during the first semester of the 2008-09 school year and report the results of the evaluation to the governor, legislative leadership, and standing committees by January 1, 2009. The program would limited to funding of $3.6 million in General Revenue for fiscal year 2007. It is assumed that costs would remain at that level in fiscal year 2008, fiscal year 2009, and fiscal year 2010.
Section 4.02 would entitle charter school employees who would be subject to the minimum salary schedule if they were employed by a school district to a salary increase of $2,500 or $2,000 beginning in fiscal year 2007 dependent on the charter school’s participation in the Texas School Employees Group Health Coverage program (TRS-Active Care). The bill would require charter schools that are TRS-Active Care participants to provide a wage increase in fiscal year 2007 equivalent to an average of $500 per full-time and $250 per part-time non-administrator employees not eligible for the $2,500 increase. The section would provide state aid in like amounts to charter schools beginning in fiscal year 2007. The estimated cost of additional state aid is $13 million in general revenue in fiscal year 2007, increasing to $14.4 million by fiscal year 2011. Increases in public education employee salaries have an impact on the state’s contributions to TRS. At the current state contribution rate of 6 percent, the additional state contribution to TRS associated with the salary provisions in this section is $631,000 in general revenue in fiscal year 2007, increasing to $780,000 by fiscal year 2011.
Section 4.04 of the bill would entitle classroom teachers, full-time libarians, full-time counselors, and full-time school nurses employed by the Windham school district to a salary increase of $2,000 beginning in fiscal year 2007. Section 4.03 would provide state aid to the Windham school district in amounts sufficient to fund the salary increase. The estimated cost in additional state aid to the Windham School district for this purpose is $1.9 million per year in General Revenue. The additional cost of state contributions to TRS associated with these provisions would be an estimated $110,000 per year in General Revenue.
Section 4.05 would entitle school district employees subject to the state minimum salary schedule to a $2,500 salary increase in 2006-07. At the current state contribution rate of 6 percent, the estimated cost of increased state contributions to TRS associated with the proposed salary increase would range from $41 million in general revenue in fiscal year 2007 to $44 million in fiscal year 2011. Estimated state contributions to TRS have been adjusted to reflect changes to the compensation supplement program contemplated elsewhere in this bill.
Section 4.07 of the bill would authorize school districts to provide mentors to each classroom teacher with fewer than two years of teaching experience. The commissioner would adopt rules to implement the program and would provide funding to school districts from funds appropriated for that purpose. State cost is estimated at $13.3 million in general revenue in fiscal year 2007, increasing to $14.4 million by fiscal year 2011.
Section 4.08 of the bill would add new Subchapter N, Chapter 21, Texas Education Code to establish an awards for student achievement program under which the commissioner of education would provide grants to eligible campuses. Eligibility would be determined based on the percentage of educationally disadvantaged students enrolled at the campus and the campus accountability rating. The bill would require participating campuses to have an approved campus incentive plan that describes the use of grant funding and meets minimum criteria described in the bill. The commissioner would determine grant award amounts, not to exceed $98 million in general revenue in fiscal year 2007. In fiscal year 2008 and subsequent years, awards would be paid from the amounts not to exceed $100 million per year deposited to the credit of the Educator Excellence Fund to be established within Subchapter O, Chapter 21, Education Code under the bill.
Section 4.08 of the bill would add new Subchapter O, Chapter 21, Texas Education Code to establish an educator excellence awards program. The provisions would require the commissioner of education to provide grants to school districts for the purpose of providing incentive payments to employees under the terms of locally developed awards plans approved by the commissioner. The bill would establish an educator excellence fund within the general revenue fund and would require the commissioner of education to deposit an amount equal to $840 multiplied by the number of classroom teachers in fiscal year 2008 increasing to $1,000 per teacher in fiscal year 2009 and subsequent years. Funding for each district would be determined on the basis of average daily attendance. State cost is estimated at $261 million in general revenue in fiscal year 2008, increasing to $328 million by fiscal year 2011.
Stipends or bonuses received by teachers under the Awards for Student Achievement and the Educator Excellence Awards program would be considered compensation for purposes of contributions to TRS. Additional state TRS contributions associated with these programs are estimated at $4.4 million in fiscal year 2007, increasing to $10.9 million by fiscal year 2011.
Section 4.09 would reenact and amend Subchapter D, Chapter 22 of the Texas Education Code to convert the compensation supplement for public education employees to an authorization to allow school district employees who are members of TRS, employees of charter schools that participate in TRS Active Care, and employees of regional education service centers to elect to defer a portion of salary for the purpose of contributing to a cafeteria plan or paying health care premiums through premium conversion. Administrators would not be eligible to elect a deferral under this section.
Deferral amounts would be limited by applicable federal law. The reenactment and amendment of this subchapter would result in a savings to the state of $275 million in fiscal year 2007 in funds appropriated for the purpose of funding the compensation supplement as it exists in current law. Under current law, the rate at which the compensation supplement is paid is to be set by rider in the General Appropriations Act. Assuming that the rate would have remained at the current level established by the legislature, $500 per full-time employee and $250 per part-time employee, in future biennia, the provisions of this bill would result in a savings of $297 million in general revenue million in fiscal year 2008, increasing to $313 million in fiscal year 2011.
Up to $1,000 of deferred compensation would not be considered compensation for the purpose of retirement contributions to TRS.
Section 4.09 would entitle full-time and part-time non-administrative school district employees not subject to the minimum salary schedule to a wage increase of $500 and $250 respectively in fiscal year 2007. The estimated increase in the state’s contribution to TRS associated with the wage increase is $2.5 million in fiscal year 2007. Estimated state contributions to TRS have been adjusted to reflect changes to the compensation supplement program contemplated elsewhere in this bill.
Section 4.10 of the bill would provide state aid to school districts sufficient to fund the salary increases to support staff required by this bill. State cost is estimated at $141 million in general revenue in fiscal year 2007.
Section 5.01 would require the commissioner of education and the Higher Education Coordinating Board (THECB) to establish vertical teams composed of high school and higher education faculty for the purpose of aligning the high school curriculum with higher education curriculum and expectations, including the joint development of courses aimed at assisting students requiring additional preparation in advance of college-level work. The cost of curriculum development is estimated at $1,000,000 in fiscal year 2007.
Section 5.04 would establish Texas Governor’s Schools to be funded through grants of $750,000 per year per approved governor’s school program. Assuming that two programs were established, the state cost is estimated at $1.5 million in general revenue per year beginning in fiscal year 2007.
Section 5.06 would require the Texas Education Agency (TEA) to develop standards for evaluating the success of high school completion and success and college readiness programs, provide guidance to school districts in establishing these programs, and develop standards for selecting and recognizing school districts with exceptional programs. This section would direct the use of funds received under the high school allotment provided through provisions in Article I of this bill.
Section 5.08 would require the P-16 Council to develop a college-readiness and success strategic plan. This section would require THECB to implement a course redesign project aimed at improving the delivery and cost-effectiveness of college-level courses. Total costs for the provisions of this section are estimated at $11.8 million in fiscal year 2007 and $7.2 million annually in subsequent years. These costs represent functions that would be required for TEA and THECB.
Section 6.01 would make children of active duty members of the armed forces of the United States or members of the armed forces of the United States who are injured or killed while on active duty eligible for enrollment in state-funded prekindergarten classes. Based on an average cost of $4,390 per student in average daily attendance enrolled in prekindergarten programs, the annual cost to the Foundation School Program is estimated at $6.3 million.
Section 13.01 would make an appropriation of $3.825 billion in fiscal year 2007.
Section 13.02 of the bill would authorize the use of federal funds, including consolidated administrative or innovative program funds, to fund several provisions of the bill. If sufficient federal funds are not available, Section 8.02 authorizes the use of state General Revenue funds.
Section 13.03 would repeal subsection (a) of Rider 97 following the appropriations to TEA in the 2006-07 General Appropriations Act, 79th Legislature, Regular Session, 2005.
The estimated TEA administrative cost associated with the provisions of the bill is $600,000 in each year to fund 10 full-time-equivalent employees. The estimated THECB administrative cost associated with the provisions of the bill is $650,000 in each year to fund 8 full-time-equivalent employees.
School districts would see a decrease in local revenue due to the bill's tax rate reduction and an increase to state aid due to the bill's revenue guarantee provision.
Districts' local revenue loss from an 11.33 percent tax rate reduction is estimated to be $2,148 million in 2007. For 2008, the 33.33 percent reduction is estimated to be $6,587 million, increasing by 4-5 percent each year thereafter. However, for the purposes of the fiscal note it is assumed that districts would access, on a statewide average basis, the equivalent of four pennies above their compression rate in 2007, which would generate an estimated $481 million in retained local revenue, resulting in a net local revenue loss of approximately $1,666 million. In fiscal year 2008, under the assumption of seven additional pennies over the compression rate (the four levied in 2007 and another 3 in 2008), the local revenue loss prior to enrichment cited above would be offset by a gain of $834 million in retained local revenue on those seven pennies. For 2009 to 2011, it is assumed that districts would add an average of three pennies each year, with corresponding impacts to local revenue and state aid.
The bill would impose new requirements on districts related to employee compensation and would provide for state funding sufficient to fund these requirements. The bill would create a mentoring program, the Awards for Student Achievement program, and the Educator Excellence Awards program for which state funds would be allocated to eligible districts. The bill would provide additional state funds to eligible school districts based on the number of students in average daily attendance in grades nine through twelve.
Section 5.02 would direct the State Board of Education to adopt rules to ensure that four years of English, math, science, and social studies are required for graduation and that one or more required courses include a research writing component. Implementation of this requirement may incur significant local cost for additional teachers, classroom facilities, and laboratories.
| Source Agencies: | 304 Comptroller of Public Accounts, 701 Central Education Agency
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| LBB Staff: | JOB, SD, CT, UP, JSc
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