80(R) HB 1601 - Introduced version

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 80TH LEGISLATIVE REGULAR SESSION


April 11, 2007

TO:	Honorable Rob Eissler, Chair, House Committee on Public Education

FROM:	John S. O'Brien, Director, Legislative Budget Board

IN RE:	HB1601 by Madden (Relating to the expulsion of a public school student for certain offenses committed on or off school property.), As Introduced

Estimated Two-year Net Impact to General Revenue Related Funds for HB1601, As Introduced: a negative impact of ($8,076,059) through the biennium ending August 31, 2009.

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
2008	($3,403,130)
2009	($4,672,929)
2010	($4,672,929)
2011	($4,672,929)
2012	($4,672,929)

All Funds, Five-Year Impact:

Fiscal Year	Probable Savings/(Cost) from FOUNDATION SCHOOL FUND 193
2008	($3,403,130)
2009	($4,672,929)
2010	($4,672,929)
2011	($4,672,929)
2012	($4,672,929)

The bill would expand mandatory expulsions to require that students be expelled from school for committing certain serious offenses without regard to whether the student is on or off-campus or whether or not the student is attending a school-related event at the time the offense is committed. School districts would be required to readmit students expelled under the provisions of the bill upon notification that the student's case has been dropped or dismissed or that the student has been found not guilty.

The expansion of offenses requiring mandatory expulsion would increase the number of mandatory placements in juvenile justice alternative education programs (JJAEPs). The state reimburses JJAEPs at a rate of $59 per student per day for mandatory placements. Based on data regarding arrests of juveniles for relevant offenses, prosecution and conviction rates, and other factors, the Juvenile Probation Commission estimates that the provisions of the bill would result in 3,096 additional students served in JJAEPs in FY 2008 for an increase in student attendance days of 175,536 and 4,513 additional students served in JJAEPs in FY 2009 for an increase in student attendance days of 238,742. Assuming 85 percent attendance, at the state reimbursement rate of $59 per student attendance days, additional state reimbursement for JJAEPs would be estimated at $8.8 million in FY2008 and $12.0 million in FY2009. It is assumed that costs beyond FY2009 would be similar.

Additional appropriations needed for JJAEP reimbursements would be paid through reductions to districts' Tier 1 compensatory education allotments. However, due to the changes in school finance made by House Bill 1, 79th Legislature, 3rd Called, a reduction in a district's Tier 1 state aid would result in an increase of hold harmless state aid in order to reach a total revenue target. Therefore, increases in appropriations for set-aside programs result in increased state cost. However, since school districts are not allowed to count students who are placed in JJAEPs under mandatory expulsion criteria in average daily attendance (ADA) for state funding purposes, the state costs noted above would be offset in part by a reduction in the amount of state aid generated by school districts. If it is assumed that the days counted in the calculation of average daily attendance for Foundation School Program purposes would decline by the same amount as the estimated increase in days of attendance in JJAEPs, costs for state aid under the Foundation School Program would be reduced by an estimated $5.4 million in FY2008 and $7.3 million in FY2009.

The resulting net increase in state cost would be approximatley $3.4 million in FY2008 and $4.7 million in FY2009 and subsequent years. In the event Education Code, 42.2516 were changed to restore set-aside funding to its pre-House Bill 1 (79-3) functionality, the bill would have no net state fiscal impact.

Local Government Impact

The average cost of operating a JJAEP is $125 per student attendance day. To the extent that state reimbursements are not sufficient to cover the cost of additional placements, local costs may be incurred. Local costs would be expected to vary widely.