Honorable Jimmie Don Aycock, Chair, House Committee on Public Education
FROM:
Ursula Parks, Director, Legislative Budget Board
IN RE:
HB1100 by Johnson (Relating to a gold standard full-day prekindergarten program provided by public school districts.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB1100, As Introduced: a negative impact of ($412,298,333) through the biennium ending August 31, 2017.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2016
($184,190,378)
2017
($228,107,955)
2018
($273,644,962)
2019
($320,387,895)
2020
($368,107,890)
Fiscal Year
Probable Savings/(Cost) from General Revenue Fund 1
Change in Number of State Employees from FY 2015
2016
($184,190,378)
6.0
2017
($228,107,955)
6.0
2018
($273,644,962)
6.0
2019
($320,387,895)
6.0
2020
($368,107,890)
6.0
Fiscal Analysis
The bill would create the gold standard prekindergarten program at the Texas Education Agency (TEA), which would award funds to school districts and open-enrollment charter schools to implement a full-day prekindergarten program for eligible students who are at least four years of age on September 1 of the year the child begins the program. The bill would require a district to apply to TEA to receive a gold standard prekindergarten program distinction. To achieve this distinction, a district would need to meet certain requirements related to curriculum, instruction standards, and teacher certification. The bill would require the district to develop and implement parent engagement plans. The bill would require districts to administer TEA approved diagnostic assessments to students in the program, but would prohibit the administration of standardized tests.
In addition to Foundation School Program funding currently available for eligible prekindergarten students in a half-day program, a school district operating a gold standard prekindergarten program would be entitled to receive an additional $3,650 for every student in average daily attendance in a gold standard prekindergarten program.
The bill would require TEA to collect and report data from all prekindergarten classes, including gold standard prekindergarten programs, and make the information available on the agency's website. The bill would require TEA to assess the effectiveness of the program, and to develop and approve additional methods by which a school district may assess the program within their own district. The bill would require the Commissioner of Education to establish benchmarks to determine the effectiveness of a school district's program.
The bill would take apply beginning with the 2015-16 school year.
Methodology
Based on information provided by TEA, there is estimated to be a prekindergarten ADA of 104,156 in fiscal year 2016, increasing to 110,541 in fiscal year 2020. Based on information provided by TEA, this analysis assumes 45 percent of prekindergarten students would be in a participating program in fiscal year 2016, with an increase in participation of 10 percent per year, until a total participation rate of 85 percent is reached in fiscal year 2020. At an additional $3,650 per student in average daily attendance in a gold standard prekindergarten program, this analysis assumes an additional $171.1 million would be provided to districts to implement the program in fiscal year 2016, $212.3 million in fiscal year 2017, and increasing to $343.0 million in fiscal year 2020.
The bill indicates that implementation of the gold standard prekindergarten program is subject to appropriations, but does not specify a level of funding for the program. This analysis assumes costs based on anticipated program participation and the funding level per eligible prekindergarten student. However, actual program costs would be limited to amounts appropriated for that purpose.
Based on information provided by TEA, 5 new FTEs would be required to review gold standard prekindergarten program district plans, review and approve prekindergarten curriculum and assessments, assess the effectiveness of the programs, establish benchmarks, monitor progress, propose changes to programs that are not making satisfactory progress, and provide other technical assistance. The bill would require one additional FTE to administer the funding portion of the gold standard prekindergarten program. The estimated cost of these FTEs, including salary, benefits, travel and other operating expenses, would be $569,503 in fiscal year 2016 and $521,503 in subsequent years.
TEA estimates $256,944 in fiscal year 2016 in technology costs to update the agency's Early Childhood Data System and eGrants system.
The state would incur additional costs in the form of contributions to the Teacher Retirement System (TRS) for additional teachers hired for the gold standard prekindergarten program. This analysis assumes that at a student to teacher ratio of 25:1, an additional 3,750 teachers would be required statewide in fiscal year 2016, 4,654 teachers would be required in fiscal year 2017, increasing to 7,517 teachers in fiscal year 2020. TEA reports an average teacher salary for fiscal year 2014 of $48,192 for teachers assigned to prekindergarten classrooms. Based on a state TRS contribution rate of 6.8 percent, the projected additional state cost of the additional teachers would be $12.3 million in fiscal year 2016, $15.3 million in fiscal year 2017, and increasing to $24.6 million in fiscal year 2020.
Technology
TEA estimates $0.3 million in fiscal year 2016 in technology costs to update the agency's Early Childhood Data System and eGrants system.
Local Government Impact
Based on information provided by TEA, it is assumed that school districts could incur additional costs to collect additional prekindergarten data, although costs would vary by district. TEA also notes that districts would likely incur costs related to the administration of gold standard prekindergarten programs, but that those costs would be covered by program funding.
Among the local costs districts would incur include the salary costs for the additional teachers required to implement the provisions of the bill, assumed to cost $180.7 million in fiscal year 2016, $224.3 million in fiscal year 2017, and increasing to $362.2 million in fiscal year 2020.
This analysis assumes that certain districts would incur costs associated with the construction of additional facilities related to the expansion from a half-day prekindergarten program to a full-day prekindergarten program. Assuming that districts either must build additional instructional space or purchase portable classrooms for this purpose, the total cost of capital outlay could vary significantly, depending on the scenario, with these costs most likely spread across several years in the form of annual debt service or lease payments. However, it is unknown the extent to which districts may have existing capacity to expand services within these scenarios, and districts may arrange to provide prekindergarten programs in non-school settings, which could mitigate facilities costs.