TO:	Honorable Joan Huffman, Chair, Senate Committee on Finance

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	SB2 by Creighton (Relating to a local optional teacher designation system implemented by a school district, a security officer employed by a school district, the basic allotment and guaranteed yield under the public school finance system, and certain allotments under the Foundation School Program; making an appropriation.), As Introduced

Fiscal Year	Appropriation out of General Revenue Fund 1
2024	$598,250,000
2025	$598,250,000

Fiscal Year	Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2024	($2,486,322,474)
2025	($2,706,532,109)
2026	($2,853,205,231)
2027	($3,111,205,231)
2028	($3,215,505,231)

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 2023
2024	($53,622,474)	($2,432,700,000)	11.0
2025	($54,832,109)	($2,651,700,000)	11.0
2026	($53,405,231)	($2,799,800,000)	11.0
2027	($53,505,231)	($3,057,700,000)	11.0
2028	($53,705,231)	($3,161,800,000)	11.0

The bill would amend the Teacher Incentive Allotment (TIA) designations. A new designation, "acknowledged", would be added to existing Local Optional Teacher Designation System designations. The bill would also change the designation of national board certified teachers from "recognized" to “nationally board certified.”

The bill would require the Texas Education Agency (TEA) to provide technical assistance that would include providing examples of local optional teacher designation systems; establish partnerships between districts and schools; apply performance and validity standards that would be established by the Commissioner; provide centralized support for the analysis of the results of assessments; and facilitate effective communication and promotion of local optional teacher designation systems.

The bill would establish the local optional teacher designation system grant program. From funds appropriated or available, TEA would develop and administer a grant program with money and technical assistance for districts and open-enrollment charter schools to expand implementation of local optional teacher designations system and increase the number of teachers eligible for a designation. Grants that would be awarded under this section would be required to meet the needs of individual school districts and enable regional leadership capacity.

The bill would amend and establish various allotments under the Foundation School Program (FSP).

The bill would amend the associated allotment amounts under the Teacher Incentive Allotment.

The bill would establish the Teacher Retention Bonus for the 2023-24 school year and the Teacher Retention Allotment, starting with the 2024-25 school year, which would entitle districts to an allotment of $3,000 per classroom teacher in districts with more than 5,000 enrolled students, and $10,000 per classroom teacher in districts with 5,000 or fewer enrolled students.

The bill would increase the Basic Allotment to $6,235 beginning in fiscal year 2024.

The bill would amend the School Safety Allotment. Under the provisions on the bill, a school district would be entitled to $30,000 per campus and $20 per student in average daily attendance. School districts would also be entitled to $1 per student in average daily attendance for every $50 basic allotment increase above $6,235.

TEA estimates that grants to local education agencies for the local optional teacher designation system grant program would total $30.0 million per fiscal year.

This analysis assumes that TEA would require an additional 11.0 FTEs to implement provisions of the bill and support schools at a total cost of $1.4 million annually in fiscal years 2024-2028.

The bill would amend or create allotments under the FSP as outlined in the Fiscal Analysis section above. As the bill would not require an increase to the basic allotment above $6,235, this analysis assumes a school safety allotment of $30,000 per campus and $20 per student.

This analysis assumes that the total cost to the FSP would be $2.4 billion in fiscal year 2024, $2.7 billion in fiscal year 2025, increasing to $3.2 billion in fiscal year 2028.

This analysis assumes the amendments to the School Safety Allotment and Basic Allotment, and the creation of the Teacher Retention Bonus and the Teacher Retention Allotment would have a fiscal impact on funding provided under TEC Section 48.2543, Additional State Aid for Homestead Exemption. However, the fiscal impact cannot be determined at this time.

Additionally, this analysis assumes state cost of additional 1.25 percent TRS-Care contributions resulting from the required salary increases under the bill would be $22 million annually beginning in fiscal year 2024.

TEA estimates that the cost to develop and implement the requirements of the bill in the Teacher Incentive Allotment SCOMS application would be $542,293 in fiscal year 2024 and $1,626,878 in fiscal year 2025. This analysis assumes that TEA would incur Data Center Service (DCS) costs, including a onetime hardware/software cost of $11,532 and an annual ongoing cost of $108,756. This analysis assumes that provisions of the bill would require an additional 3 technology staff at TEA, included in FTE counts and costs included above in Methodology.

The bill would provide compensation increases to classroom teachers and would establish allotments under the FSP to fund them. This analysis assumes the teacher pay raises required by the bill would result in local employer benefits costs of 8.25 percent for TRS retirement and 0.75 percent for TRS-Care.

The bill would repeal TEC Sections 48.051(c) through 48.051(d), which removes certain spending requirements for LEAs during a year in which the basic allotment is increased.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 88TH LEGISLATURE 3rd CALLED SESSION 2023


October 9, 2023