Austin, Texas
March 7, 2017

Honorable Dan Huberty, Chair, House Committee on Public Education
Ursula Parks, Director, Legislative Budget Board
HB21 by Huberty (Relating to the public school finance system.), As Introduced

The bill would make formula and structural changes to the Foundation School Program. The bill contains a number of elements that would be anticipated to improve equity among Texas school districts relative to current law.
The bill would repeal several funding streams that either flow outside the Foundation School Program's (FSP) equalized system or are not fully realized by all school districts. Among these provisions are: aid provided for the purpose of paying nonprofessional staff wage supplements which currently flows entirely outside the equalized system; the high school allotment which is codified as a Tier 1 FSP allotment but, per statute, flows outside of the operation of the Tier 1 equalized system; and the transportation allotment which also is codified as a Tier 1 allotment but stops short of functioning fully since its lack of inclusion in the calculation of weighted average daily attendance (WADA) prevents a reduction in recapture similar to that experienced for standard Tier 1 allotments, such as the regular program allotment. Flowing similar or increased levels of funding through the basic allotment in place of the existing structures would move the revenue inside the equalized system of the FSP.
The bill would repeal statute that results in a higher equalized wealth level for certain districts based on the district's 1992-93 revenue per student plus the indexed change between the current equalized wealth level and the level established in 1993. Having a higher equalized wealth level allows a district to keep more revenue per WADA than an equally wealthy district that is held to the statutory equalized wealth level. The repeal of Section 41.002(e)-(g), Education Code, proposed under the bill would eliminate this access to additional unequalized revenue by ensuring that the standard equalized wealth level applies to all districts.
Beginning in fiscal year 2018, the bill would provide increased FSP entitlement for about 95% of school districts and 98% of students through the equalized FSP formula system.

Source Agencies:
LBB Staff: