Honorable Dan Huberty, Chair, House Committee on Public Education
FROM:
Ursula Parks, Director, Legislative Budget Board
IN RE:
HB2282 by Johnson, Eric (Relating to a gold standard full-day prekindergarten program provided by public school districts and the elimination of the high school allotment under the Foundation School Program.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB2282, As Introduced: a negative impact of ($449,248,649) 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
($212,344,105)
2019
($236,904,544)
2020
($267,098,795)
2021
($289,434,657)
2022
($315,550,782)
Fiscal Year
Probable Savings/(Cost) from General Revenue Fund 1
Probable Savings/(Cost) from Foundation School Fund 193
Change in Number of State Employees from FY 2015
2018
($22,762,462)
($189,581,643)
5.0
2019
($23,165,579)
($213,738,965)
5.0
2020
($23,525,556)
($243,573,239)
5.0
2021
($23,986,576)
($265,448,081)
5.0
2022
($24,456,816)
($291,093,966)
5.0
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.
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 eliminate the High School Allotment within the Foundation School Program (FSP).
The bill would create the Gold Standard Prekindergarten Allotment, which would provide an annual allotment equal to a school district's adjusted basic allotment multiplied by 0.5 for each student in average daily attendance in a gold standard prekindergarten program.
The bill would take apply beginning with the 2017-18 school year.
Methodology
TEA assumed the participation of the gold standard prekindergarten program would be similar to the high quality prekindergarten program because of similar requirements. TEA indicated that the high quality prekindergarten program served 158,862 students in fiscal year 2017 and assumed the same number of students would participate in the gold standard prekindergarten program in fiscal year 2018. TEA assumed participation in the program would grow by approximately two percent per year, in alignment with overall student growth.
TEA used its school finance model to estimate the costs of the bill. TEA converted the assumed participation noted above to average daily attendance (ADA), and applied this amount to the adjusted allotment and a funding weight of 0.5. TEA also eliminated the High School Allotment in its school finance model to offset some of the cost of the bill. In total, TEA estimated the cost to the Foundation School Program from implementing the provision of the bill to be $189.6 million in fiscal year 2018, $213.7 million in fiscal year 2019, increasing to $291.1 million in fiscal year 2022.
Based on information provided by TEA, 5 new FTEs would be required to review gold standard prekindergarten program district applications, curricula, diagnostic assessments, and program effectiveness assessments. The estimated cost of these FTEs, including salary, benefits, and other operating expenses, would be $514,561 in fiscal year 2018 and $474,561 in subsequent years.
TEA estimates $92,004 in fiscal years 2018 and 2019 in technology costs to update the agency's information technology systems.
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 6,353 teachers would be required statewide in fiscal year 2018, 6,480 teachers would be required in fiscal year 2019, increasing to 6,877 teachers in fiscal year 2022. TEA reports an average teacher salary for fiscal year 2017 of $51,286 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 $22.2 million in fiscal year 2018, $22.6 million in fiscal year 2019, and increasing to $24.0 million in fiscal year 2022.
Depending on the disposition of similar programs, some costs related to administration, technology, and TRS would be mitigated.
Technology
TEA estimates $1.8 million in the 2018-19 biennium in technology costs to update the agency's information technology systems.
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 $325.8 million in fiscal year 2018, $332.3 million in fiscal year 2019, and increasing to $352.7 million in fiscal year 2022.
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.