FISCAL NOTE, 85TH LEGISLATURE 1st CALLED SESSION - 2017
August 12, 2017
TO:
Honorable John Zerwas, Chair, House Committee on Appropriations
FROM:
Ursula Parks, Director, Legislative Budget Board
IN RE:
SB19 by Nelson (Relating to bonuses for public school classroom teachers and state assistance for the Texas Public School Employees Group Insurance Program.), As Engrossed
Estimated Two-year Net Impact to General Revenue Related Funds for SB19, As Engrossed: an impact of $0 through the biennium ending August 31, 2019.
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
2018
$193,000,000
2019
($193,000,000)
2020
$0
2021
$0
2022
$0
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2018
$193,000,000
2019
($193,000,000)
2020
($201,800,000)
2021
($203,457,000)
2022
($205,127,000)
Fiscal Year
Probable Savings/(Cost) from Foundation School Fund 193
Probable Savings/(Cost) from General Revenue Fund 1
Probable Savings from General Revenue Fund 1
2018
$0
($212,000,000)
$405,000,000
2019
($193,000,000)
$0
$0
2020
$0
$0
$0
2021
$0
$0
$0
2022
$0
$0
$0
The tables above reflect Scenario 1, in which no further appropriations are made for purposes of classroom teacher bonuses starting in FY 2020.
The tables below reflect Scenario 2, in which new state appropriations are used for purposes of classroom teacher bonuses starting in FY 2020.
Fiscal Year
Probable Savings/(Cost) from Foundation School Fund 193
Probable Savings/(Cost) from General Revenue Fund 1
Probable Savings from General Revenue Fund 1
2018
$0
($212,000,000)
$405,000,000
2019
($193,000,000)
$0
$0
2020
($201,800,000)
$0
$0
2021
($203,457,000)
$0
$0
2022
($205,127,000)
$0
$0
Fiscal Analysis
The bill would amend the Education Code to require the Texas Education Agency (TEA) to, subject to appropriation, provide an annual bonus to each classroom teacher with at least six years of teaching experience at the beginning of the school year during which the bonus is provided. The bill would require the amount of the bonus to be established by appropriation, which may be based on the number of years of teaching experience. The authority to provide bonuses would apply beginning with the 2018-19 school year.
The bill would transfer from the Health and Human Services Commission $193 million in General Revenue appropriations made by Senate Bill 1, 85th Legislature, Regular Session, for the 2018-19 biennium to TEA to be used by the agency to provide: 1) a bonus of $600 to be paid in September 2018 for each classroom teacher with at least 6 but less than 11 years of teaching experience at the beginning of the 2018-19 school year; and 2) a bonus of $1,000 to be paid in September 2018 for each classroom teacher with at least 11 years of teaching experience at the beginning of the 2018-19 school year. HHSC is granted authority with respect to the strategies and programs from which the funds would be transferred, and depending on the approach adopted by HHSC to execute the transfer there could be an additional cost to supplemental appropriations in fiscal year 2019 and certain other methods of finance, including Federal Funds, could be affected.
The bill would transfer from the Health and Human Services Commission $212 million in General Revenue appropriations made by Senate Bill 1, 85th Legislature, Regular Session, for the 2018-19 biennium to the Teacher Retirement System of Texas (TRS) to be used to provide support to participants in the Texas Public School Employees Group Insurance Program (TRS-Care) by: 1) reducing costs for participants, including premiums, deductibles, and prescription drugs, during the 2018 and 2019 plan years; and 2) reducing the premium and maximum out-of-pocket cost for an enrolled adult child with a mental disability or a physical incapacity during the 2018 and 2019 plan years. HHSC is granted authority with respect to the strategies and programs from which the funds would be transferred, and depending on the approach adopted by HHSC to execute the transfer, there could be an additional cost to supplemental appropriations in fiscal year 2019 and certain other methods of finance, including Federal Funds, could be affected.
Methodology
The legislation internally limits the amount that may be provided for bonuses in the 2018-19 biennium to the $193 million transferred from HHSC. Based on the current count of the affected population, and a historical rate of growth, the amount needed to fully fund the $600 and $1,000 bonus amounts is estimated to be $200 million.
For fiscal year 2020 and beyond, two scenarios are provided, consistent with the language in Section 21.417 of the bill. Scenario 1 assumes that no further appropriations would be made from which TEA would pay bonuses. Scenario 2 estimates the cost of the bill's bonus provision if they were to be paid with new state appropriations. The estimated cost of bonuses is $201.8 million in 2020, growing thereafter by the historical rate of growth for teachers with at least six years of experience.
As noted above, these provisions would be financed in the 2018-19 biennium via a transfer from the Health and Human Services Commission.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies:
304 Comptroller of Public Accounts, 323 Teacher Retirement System, 529 Health and Human Services Commission, 701 Texas Education Agency