Honorable Dan Patrick, Lieutenant Governor, Senate
Ursula Parks, Director, Legislative Budget Board
SB1882 by Menéndez (Relating to a school district contract to partner with an open-enrollment charter school to operate a district campus. ), As Passed 2nd House
Estimated Two-year Net Impact to General Revenue Related Funds for SB1882, As Passed 2nd House: an impact of $0 through the biennium ending August 31, 2019.
The bill would have an estimated impact of $1.7 million in fiscal year 2020, $3.7 million in fiscal year 2021, and $6.1 million in fiscal year 2022, assuming the agency implements the program. The agency is not required to implement the legislation in the absence of an appropriation.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
Probable Savings/(Cost) from Foundation School Fund 193
The bill would exempt a school district campus from intervention for failure to satisfy academic performance standards during the first two years of operation if the school district contracts with the governing body of an open-enrollment charter school to operate the campus. The bill would require the charter to meet certain requirements in order for the district to receive additional funding and an exemption for intervention under the provisions of the bill. The bill would require the district campus to be granted under Subchapter C, Chapter 12 of the Education Code.
The bill would entitle the school district that enters into such an agreement to receive, for each student in average daily attendance, the difference between: 1) the amount of funding provided under Section 12.106 of the Education Code; and 2) the amount the district would be entitled under Chapter 42 of the Education Code if the difference would result in increased funding.
The bill would require the Texas Education Agency to implement the provisions of the bill only if the Legislature appropriates funding specifically for that purpose and would allow the agency to implement the provisions using other appropriations if available.
The bill would apply beginning with the 2017-18 school year.
The Texas Education Agency (TEA) indicates that the average adjusted allotment for school districts is $5,679 per student in average daily attendance (ADA), and the average adjusted allotment per ADA for charter schools is $6,453. As a result, under the provisions of the bill, TEA indicates that school district campuses that enter into an agreement with an open-enrollment charter school under the provisions of the bill would be entitled to an additional $774 per ADA.
TEA assumes that campuses that receive a D or F rating would be most likely to enter into an agreement with an open-enrollment charter school and that campuses would wait until the A-F accountability ratings are released for the first time in August 2018 to begin to implement the provisions of the bill. TEA also assumes that school districts would require at least an additional year to negotiate contracts with charter schools and hire staff.
TEA assumes that a total of 20 eligible campuses would enter into such an agreement in fiscal year 2020, increasing by 4 campuses per subsequent year. TEA indicated that the average campus size is 611 students. Of this total, TEA assumes that 25 percent of eligible students would have otherwise enrolled in a charter school, and as a result, would not incur any additional costs to the Foundation School Program. Of the remaining 75 percent of eligible students, TEA assumes that the new campus would begin with only one grade in fiscal year 2020, and increase by an additional grade in subsequent years. TEA also assumed the students would have a 95.7 percent attendance rate.
In total, based on these assumptions, TEA indicates that this would equate to approximately 2,193 ADA in fiscal year 2020, increasing to 7,827 ADA in 2022. At an assumed cost of $774 per ADA, this would equate to an anticipated cost of $1.7 million in fiscal year 2020, $3.7 million in fiscal year 2021, and $6.1 million in fiscal year 2022.
Local Government Impact
School districts and open-enrollment charter schools would be able to enter into contracts for the operation of certain campuses and potentially receive an increase in state aid through the Foundation School Program.