Honorable Brandon Creighton, Chair, Senate Committee on Education K-16
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
HB4 by Buckley (Relating to public school accountability, including the implementation of an instructionally supportive assessment program and the adoption and administration of assessment instruments in public schools, indicators of achievement and public school performance ratings under the public school accountability system, a grant program for school district local accountability plans, and actions challenging Texas Education Agency decisions related to public school accountability.), As Engrossed
Estimated Two-year Net Impact to General Revenue Related Funds for HB4, As Engrossed: a negative impact of ($197,735,128) through the biennium ending August 31, 2027.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
The potential impact to federal funding eligibility could not be determined; however, the Texas Education Agency indicates that if the state falls out of compliance with federal assessment requirements, federal funds may be withheld.
General Revenue-Related Funds, Five- Year Impact:
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2026
($98,834,372)
2027
($98,900,756)
2028
($98,764,017)
2029
($98,764,017)
2030
($98,764,017)
All Funds, Five-Year Impact:
Fiscal Year
Probable Savings/(Cost) from General Revenue Fund 1
Change in Number of State Employees from FY 2025
2026
($98,834,372)
5.0
2027
($98,900,756)
5.0
2028
($98,764,017)
5.0
2029
($98,764,017)
5.0
2030
($98,764,017)
5.0
Fiscal Analysis
The bill would require the adoption of a nationally norm-referenced assessment instrument with certain requirements to be administered three times a year.
The bill would amend the requirement for administration of certain assessment instruments for social studies in grade 8.
The bill would require the Texas Education Agency (TEA) to review annually the readability and alignment of test questions on the adopted assessment instrument.
The bill would allow a school district to elect to use a writing portfolio assessment as an alternative to a portion of certain reading language arts assessments. The bill would require districts to design the assessment in consultation with a public or private institution of higher education.
The bill would require the commissioner to adopt a norm-referenced assessment system to evaluate academic progress of all emergent bilingual students.
The bill would modify the accountability system by adjusting the military readiness indicators and providing districts with the option to request the inclusion of additional indicators in their accountability calculations.
The bill would require TEA to establish a grant program with capacity to assist at least one school district per education service center region in developing a local accountability system with certain requirements.
The bill would limit actions challenging certain agency decisions and require a trial court to expedite the action and render a final order or judgment according to certain timelines.
Methodology
TEA estimates that the cost to adopt a nationally norm-reference assessment with certain requirements would be $156.1 million each fiscal year.
TEA estimates an annual savings of $81.4 million for the discontinuation of the State of Texas Assessments of Academic Readiness (STAAR).
TEA estimates the cost of item standards alignment and readability studies for the adopted assessment instrument would be $18.5 million annually.
This analysis assumes costs of implementing optional writing portfolios in consultation with institutions of higher education could be absorbed with existing resources.
TEA indicates that if writing portfolios were to be adopted by districts for use in place of required assessments, TEA anticipates it would incur costs to ensure compliance with federal requirements to prevent the loss of federal funds. The agency estimates these costs to be $2.3 million annually for providing training modules and resources for writing portfolio assessments; $5.8 million annually for special research studies for comparability; and $7.6 million annually to host training and calibration committees. The agency estimates an additional cost for website hosting of writing portfolios of $0.1 million for the biennium. However, these activities are not explicitly required by the bill, therefore the costs are excluded from estimates above.
TEA indicates that the cost of a norm-referenced assessment system for emergent bilingual students could not be determined. If an appropriate assessment system is not available, the agency indicates it would be a multi-year process to solicit a vendor and to design, test, and implement the system statewide. TEA indicates that during this development period, the state risks being out of compliance with federal assessment requirements.
TEA assumes an annual cost of $5.0 million in grants to schools for the local accountability grant program.
This analysis assumes TEA could implement provisions of the bill with 5.0 FTEs at a cost of $0.6 million annually.
The costs to the state judicial system could not be determined as the volume and complexity of the potential legal proceedings that could result from provisions of the bill are unknown.
TEA indicates that the bill's provisions create a risk that the state will no longer be compliant with federal assessment requirements and that any sustained failure to administer a test consistent with federal statutes would likely result in the withholding of approximately $2.5 billion a year in federal funding.
Technology
TEA estimates total IT development costs to be approximately $0.2 million for the 2026-27 biennium.
Local Government Impact
Public schools may incur costs related to modifying their assessments and instructional materials to match the new national assessments. This analysis assumes the cost may be significant; however, the fiscal implication cannot be determined at this time.