TO:	Honorable Dan Huberty, Chair, House Committee on Public Education
FROM:	Ursula Parks, Director, Legislative Budget Board
IN RE:	HB62 by Hinojosa, Gina (Relating to an adjustment under the foundation school program of the taxable value of property for school districts required to provide social security coverage for district employees.), As Introduced

The bill would have an indeterminate effect on equalized funding requirements and policies pertaining to the Foundation School Program. The bill would provide a percentage reduction in taxable value equal to the percentage of a district's required contribution for social security coverage. Anecdotal information indicates that approximately 5% of Texas school districts participate in social security to some extent.  For the majority of these districts participation is limited to auxiliary or part-time employees.  The information suggests that fewer than 20 districts participate for all employees in the district.  Districts participating in social security represent all ranges of property wealth per student.  The percentage reduction in taxable value proposed under the bill would result in increased state aid for districts that do not pay recapture and would reduce the amount of recapture owed for Chapter 41 districts.  The bill specifies a "percentage" reduction in taxable value equal to the "percentage" of a district's required contribution for social security.  If the suggested mechanism results in application of the same percentage to proportionally different bases, there could be significant variation in the level of benefit across districts.