TO:	Honorable Dan Huberty, Chair, House Committee on Public Education
FROM:	John McGeady, Assistant Director     Sarah Keyton, Assistant Director Legislative Budget Board
IN RE:	HB3 by Huberty ( relating to public school finance and public education.), Committee Report 1st House, Substituted

The bill would make formula and/or 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 additional state aid for homestead exemption. 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 gradually diminish the benefits experienced by certain districts that resulted in a higher equalized wealth level in fiscal year 2019, 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.

The new method of calculating recapture would improve equity relative to current law.