Honorable Larry Taylor, Chair, Senate Committee on Education
FROM:
John McGeady, Assistant Director Sarah Keyton, Assistant Director Legislative Budget Board
IN RE:
SB1455 by Taylor (Relating to the state virtual school network; changing a fee.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for SB1455, As Introduced: a negative impact of ($231,670,768) through the biennium ending August 31, 2021.
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
2020
($115,037,636)
2021
($116,633,132)
2022
($118,588,311)
2023
($120,576,727)
2024
($122,598,947)
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 2019
2020
($1,949,636)
($113,088,000)
13.0
2021
($1,622,636)
($115,010,496)
13.0
2022
($1,622,636)
($116,965,675)
13.0
2023
($1,622,636)
($118,954,091)
13.0
2024
($1,622,636)
($120,976,311)
13.0
Fiscal Analysis
The bill would amend the Education Code as it relates to the state virtual school network.
Full-Time Virtual Schools
The bill would repeal a requirement that a student be enrolled in a Texas public school in the preceding year in order to be eligible to enroll in a full-time virtual school. The bill would add private entities or corporations and institutions of higher education to the list of entities eligible to operate a full-time virtual school through an open-enrollment charter application. The bill would entitle those and other entities operating full-time virtual schools to earn Foundation School Program funds for students who meet eligibility requirements to enroll in public school in Texas. Entities could charge tuition fees to students who do not meet eligibility requirements to enroll in public school in Texas, including students who reside in other states and adults.
The bill also repeals a restriction that limits funding for full-time virtual schools to programs that were in operation no later than January 1, 2013.
Virtual Statewide Course Catalog
The bill would provide state funding for students enrolled in electronic courses through the statewide electronic course catalog who reside in the state but not are enrolled in a school district or open-enrollment charter school. Such students would be considered for the purposes of accountability if the student takes more than three courses through a school district or open enrollment charter school in a school year. Such a student would entitle a school district or charter school from which the student took the online courses to funding through the Foundation School Program. For such a school district, TEA would aggregate up to three courses offered during the year to such students at the district or charter school and divide by five to establish the number of possible students in average daily attendance, rounding up to the half-day average daily attendance.
Course Review and Approval
The bill would require TEA to establish the cost of providing an electronic course offered through the statewide course catalog. The bill would also require an entity submitting a course for review and approval to pay a fee equal to the agency's cost of evaluating and approving the course.
Other Provisions
The bill would require the Commissioner of Education to adopt rules governing procedures for reporting and verifying the attendance of students enrolled in virtual schools. The bill would also require students enrolled in full-time virtual schools to take each assessment that is administered to students who are provided instruction in the course material in a traditional classroom setting.
Effective Dates
The bill would apply beginning with the 2019-2020 school year. The bill would take immediate effect if it receives a two-thirds vote in each house of the Legislature. Otherwise the bill would take effect September 1, 2019.
Methodology
Full-Time Virtual Schools
The bill's elimination of the current law requirement that full-time virtual school network participants were enrolled in a Texas public school in the preceding school year will have a significant fiscal impact. Based on an assumption of 300,000 home-schooled students in the state and an assumption that three percent of those students would choose to enroll in a full-time virtual school program, TEA estimates that the bill would generate $86.2 million in additional state cost for FSP entitlement in fiscal year 2020, growing to $90.7 million by 2024, assuming a 1.7 percent growth rate. Costs could be higher if a larger share of home-schooled students chose to enroll or if the number of students grew more rapidly.
Virtual Statewide Course Catalog
Based on an assumption of 300,000 home-schooled students in the state and an assumption that five percent of those students would choose to enroll in one course through the statewide course catalog, TEA estimates that the bill would generate $28.2 million in additional state cost for FSP entitlement in fiscal year 2020, growing to $30.2 million by fiscal year 2024, assuming a 1.7 percent growth rate. Costs could be higher if a larger share of home-schooled students chose to enroll or if the number of students grew more rapidly.
Other Costs
According the TEA, the bill would likely lead to significant expansion of the Virtual School Network, necessitating additional staffing and IT-related resources. TEA estimates that 13.0 additional FTEs would be required to implement the provisions of the bill. Five FTEs would be required to provide program support and technical assistance to new full-time virtual schools. This would include ensuring that online course offerings are appropriately aligned to the TEKS. These staff would also ensure timely submission of data to verify instructor qualifications and to ensure compliance with Informed Choice Report requirements.
Five FTEs would be required to assist with rulemaking and with the implementation and oversight of additional full-time online charter schools, including private entities authorized under the bill.
Two FTEs would be required to oversee creation and maintenance of new systems; update various existing systems including accounting and invoicing systems, the course catalog system, and the course review system; and conduct data collection related to the TXVSN. One FTE would be required for indirect administration. Costs associated with the addition of 13.0 FTEs would total $1.9 million in fiscal year 2020 and $1.6 million in subsequent fiscal years.
Technology
$525,000 for professional services contracting in fiscal year 2020 would be required to complete all necessary programming changes with existing systems and to stand up new systems. Professional services costs related to maintaining these systems would be $250,000 in subsequent years.
Local Government Impact
According to TEA, the bill's requirement that students enrolled in full-time virtual schools take each assessment instrument in traditional classroom settings could have significant costs for local school districts. In order to implement this provision, an infrastructure of testing centers or traveling proctors would have to be established.
Entities choosing to participate in the Virtual School Network full-time virtual school program or online course catalog could see start-up or ongoing costs that exceed FSP funding earned for each students. However, participation in the Virtual School Network program would be voluntary.