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On February 27 the House Subcommittee on Appropriations for Article III met to hear testimony on budget recommendations from several agencies. This report focuses on discussions with the Texas Education Agency, the Texas Permanent School Corporation, the Teacher Retirement Program, and the Optional Retirement Program. Click on the following links for details on the agenda and handouts (161 pages).

 

This report is intended to give you an overview and highlight of the discussions on the various topics taken up. It is not a verbatim transcript of the discussions but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.

 

Texas Education Agency (TEA)

LBB Staff

  • LBB presentation
  • Committee asked if numbers had an increase for basic allotment or if that was being recommended
    • Not being recommended in the numbers provided

 

Commissioner Mike Morath

  • Recruiting and supporting teachers and principals is the top focus
  • Weights are based on how many kids are enrolled in a system
  • Funding is included for cybersecurity in school districts
  • VanDeaver – there is no increase in the amount of golden penny just the value of golden pennies?
    • Correct
  • VanDeaver – The unspent fund for special ed (SpEd)? What happened?
    • This is an artifact of how funding look pre HB3
    • The feds make you spend a certain amount every year
    • In 2014-2015 we changed the tabulation with the feds because we were short
    • We should never have another special ed shortfall again, we put in a clause in HB 3 and fixed the issue
  • VanDeaver – Do you guys collect on what the $15,000 grant in special education buys?
    • Yes, we keep a tab on goods and services
    • The majority of funds are going into goods at the moment
    • Will provide the analysis to the committee
  • Martinez- We want to retrain talented staff, asked if teachers need a pay raise? Curious if increasing the allotment would help?
    • Yes
  • Martinez – What’s a good number to increase?
    • When you increase the allotment… 50% goes to teachers, the other half goes to districts
    • The funding isn’t per teacher it’s per kid
    • Each district decides what the teachers get paid
  • Martinez – We are below the national average by $8,000, so do you think a $15,000 raise for teachers would be a good number/ raise?
    • Supports increasing teacher pay
  • Martinez – does the allotment increase also go to charter schools?
    • Yes, it applies to all LEAs
    • The law covers both ISDs and charter schools equally
  • Martinez – Wants to know if Morath has a specific amount for teacher pay raise
    • Discusses the math to find the amounts depending on lawmakers desire, 370,000 teachers roughly, $1000 raise is a $400,000 pay raise
  • Martinez – questions why hasn’t not paying teachers enough to respect the profession
    • That is my number one priority
    • Lawmakers have policy options
    • Notes student teacher ratio could be increased so more funding can be available for staff
  • Martinez – Inquired about tests and typing courses
    • 2 benchmark test are given
    • The standards in elementary schools for years have included typing, fourth grade you should have full fluency
  • Martinez – Notes not investing enough in special education, and concerned on testing in special education and how this impacts school ratings
    • Schools are actually graded on proficiency and student growth
    • Federal law blocks below grade level assessments
  • Martinez – So they aren’t graded on their grade level?
    • Yes, the school is graded on proficiency and academic growth
  • Martinez – There are 571 school districts and how large the education funding gaps are? I feel as if districts are having to make up for us not funding special education.
    • We have funding broken down by LEA
    • Overall the larger the district, the more that funding gap
    • Notes there is a $1.8 billion dollar delta between funds provided and what districts actually spend on special education
    • This funding delta does not mean students don’t get the services they need since federal law requires certain services to be provided
  • Martinez – Discusses Texas not meeting federal law so they stepped in
    • Student who should have been admitted to special ed, were not getting tested
    • We have been fully in compliance with federal law for 24 months
  • Martinez – Who currently holds our school district accountable for testing accountability vs private schools and homeschool? How would this accountability work for vouchers? questions third parties monitoring instead of state agency
    • State monitors for public school district
    • Third parties for private and homeschools
    • It depends how you all structure it when it comes to the policy
  • Martinez – Asked about state fully funding all education
    • Fully funded is a gray area
    • Funds may look different in each school as there are managerial decisions that can change how the money is used
    • Staff is most important
  • Gervin-Hawkins- Testing is how we address accountability; the growth proficiency model is actually a very good model. Vouchers require the state to be able to watch over how those public funds are being used
    • Notes two issues
    • Points out there were three sperate years we failed to match federal funding number; HB 3 fixed this
    • Child find practices not doing well on the state and local level; but agency has hired more special education specialist and significantly increase the special ed rep in the state
  • Gervin-Hawkins – Asked about thought on overrepresentation of SpEd
    • The overrepresentation is a six-year-old federal rule and sets up a lot of odd incentives
    • Special ed is not a place, it is a service
    • No longer place based funding; it’s an intensity of service model
    • Need a statutory change to switch to the intensity of service model
    • If we don’t do this many schools have to dip into other funds to fund special ed
  • Gervin-Hawkins – Concern minority groups are overrepresented in SpEd, how do we change the understanding marketing?
    • We need to clarify for SpEd for districts and parents
  • Gervin-Hawkins – What’s your thoughts on paying schools for enrollment instead of attendance?
    • We do ADA based funding
    • Enrollment based system creates stability for funding vs ADA schools have a higher incentive of going out to find missing kids
    • One of the few states that still does ADA, believes ADA creates a system that goes after most at risk kids
    • Believes hybrid of both enrollment and ADA is best as it will still prioritize at risk kids
  • Gervin-Hawkins – Concerned with the ADA model because issues like COVID can completely mess up funding and enrollment-based funding is more stable.
  • Gervin-Hawkins – Asks how rural schools would be affected by enrollment since they have small amounts of students
    • Very small districts cannot operate with the same number of staffing agency as bigger districts
    • Statutory changes in the small midsize formula to offset the funding difference would be welcomed by the TEA
  • Gervin-Hawkins – What happened with the new windfall of federal dollars
    • For ESSER, there was a portion that was at state discretion and the rest has to be set by state standard
    • If you had zero low-income students you get no ESSER funds
  • Gervin-Hawkins – How does the state inform the eligible parents who can get the fund?
    • There are meetings and it’s required that we inform parents who are eligible
    • The waiting list is 15000+ so the funds will be used
  • Gervin-Hawkins – Where are the sentiments about the funds for teacher pay raise to increase $15,000 coming from?
    • It’s coming from bills in House and someone put it out to the press
  • Gervin Hawkins – What is the percent of teachers qualifying for TIA?
    • At least a third should qualify but it’s purely up to districts applying their funds and going through the process to set up TIA
    • It will probably take 5-8 years for it to fully be put into place
  • Gervin-Hawkins – What happens when the ESSER funds go away?
    • The bulk run out at the first year of this biennium
    • ESSER is about adding $5 billion dollars for the next 3 year, you went from $71 to $76 billion and then now we are returning back to $71
    • Houston got over a billion, the funding range is wide and based on low-income formulas from the federal government
  • Gervin-Hawkins – Is it possible to have standardized lesson plans?
    • If you’re a first-year teacher, w/ alternative certification, having unit plans and lesson plans is a huge improvement for teachers and students
    • There is a need for more funding than what is currently in the IMA to do this
  • Bryant – What outcome should be our objective
    • Have kids who finish public ed have fulfilling lives and careers
    • Mainly grade level reading and math are of biggest concern
  • Bryant – Is Texas meeting objectives and standards
    • Texas is not meeting standards especially in grade level reading
    • Less than or half are at reading grade level
    • There’s no simple answers
    • The outcomes we are getting today are better than the past the 30 years so there is an increase from the past
    • The last 10 years there was a lot of stagnation after the great recession
  • Bryant – Inquires about funding related to meeting standards
    • More funding is always welcomed, but how funding is used varies campus to campus
    • Investment in leadership is important
  • Bryant – Do you have you have a recommendation to the legislature to about what amount to increase funding by?
    • An increase In teacher comp is most needed and that can be done by increasing the basic allotment
  • Bryant – Do you support a $15,000 dollar pay base raise as introduced into the house? Asks for specific dollar amount
    • I’ve never been a fan of across the board pay raises because of difference in performance
    • There is a range of numbers that could have a positive impact on teacher retention
  • Bryant – Wants confirmation if talking about a core curriculum statewide?
    • Are you funding textbooks that would employee base lesson plans, yes additional resources to help develop those tools for teachers
  • Bryant – Will TEA ask for more money for developing a core curriculum, how much are you recommending?
    • Depends on what the legislature asks
    • Cost roughly $2 million per grade and per textbook, so depends on the grades and courses wanted
    • Rough estimate about $24 million
  • Bryant – Have you not had conversations with lawmakers on total amount of costs you will request?
    • In favor of money for districts to buy textbooks and more money for teacher pay
  • Bryant – asked if state share is keeping up? Have we dropped to 31.5%?
    • Believes that, as property values go up then state share declines
  • Martinez-Fischer – 35 days from today will discuss the budget, have a hard time explaining the reduction to school funding
    • As property values go up, school districts collect more and state share decreases
  • Martinez-Fischer – Property tax vs education
    • Role of legislature to determine how much they want to spend on public education
  • Martinez-Fischer – What should we put in for funding in education and teachers
    • Morath notes he will be a champion for additional resources for public education, question of how much is the challenge
    • Size of state, means numbers need to be big in order for them to be meaningful
  • Martinez-Fischer – Said not getting information he asked for, just wants to look back since this bill goes to committee markup in a few days
    • Apologies for that information taking time, looking for federal numbers to give full picture
    • Will have details on Thursday
    • Federal funding infusion has been significant but those funds dry up which has largely offset a chunk of that inflation
    • More discussion between Representative and agency staff
  • Martinez-Fischer – Asked about changes to estimations of student population
    • State demographer is predicting a plateau of enrollment, NCES provides estimate as well
    • NCES says there will be a decline in enrollment of public schools
    • Demographer is predicting a plateau and slow decline
    • But numbers from school districts show increase
    • To sum – no immediate decline, there is a historical delta on what occurs and what districts predict
    • Enrollment figures from Texas districts finally closed about 1 week ok, shows enrollment up by 1.8% in Fall of 22 over Fall of 21
    • Could end up seeing a supplemental bill to address if over predict, don’t want to be caught with increase in funds without the actual enrollment
    • Putting out supplemental data collection to get attendance rates in first semester
    • Don’t want rate to high that would cause legislature to put in less money
  • Tepper – What is avg amount Texas spends on each student?
    • $13k per student in 20-21 All in, including funding to Regional service providers, TRS, federal dollars, local dollar, etc.
  • Tepper – Does it change by area?
    • Different students are weighted by different amounts
    • There is no regional cost of living mechanism, there was once a CEI but it was done away with
  • Isaac – Do ISDs decide how much they pay teachers?
    • Yes, the only state policy is the state minimum salary schedule and set so low to be irrelevant
    • Agrees the school system can pay teachers more
  • Thimesch – Safety and security funding? Some campuses may meet minimum while others do not
    • Looking for guiding framework to determine how the funding is spent
    • Back in October proposed a set of safety standards
  • Bryant – State M&O contribution rose but if you look at state contribution only, difference is only $3.7 million and it looks like only the increase went into charters
    • Look at formulas
    • Bryant – interrupts, he asked the question his way and wants to go back that he sees no increase to school districts but the increase went to charter schools
    • Those numbers make sense but it is not the way the district budget works
    • Bryan and Morath have further discussion on calculations
  • Isaac – If state raises allotment for pay, there is not guarantee it will go to teachers?
    • Statute says 30% must be spent on compensation, multiple ways to address which includes just hiring staff
  • Morrison – Looking through all the demographics, says many remain outside public schools, how do you determine growth rate in public schools
    • Historically rely on attendance rate in public schools
  • Martinez – Breakdown of public school, homeschool, private school students
    • Could look at fiscal note of previous bills filed
  • Martinez – Asked about “maybe that’s one less 4th grade teacher” conversation by TEA staff; want to clarify TEA is not hurting public schools
    • Regrets conversation, there was a family that had already withdrawn
    • Will continue to devote self to supporting kids in public education
  • VanDeaver – Have not seen any response to community regarding that conversation, has that situation been handled
    • Regret it occurred, they did prepare a statement and will provide to committee
    • Short answer to question is yes

 

Permanent School Fund Corporation (PSFC)

LBB Staff

 

Tom Maynard, SBOE PSF

Holland Timmins, CEO PFS Corporation

  • Request a rider that would allow an increase of appropriations with the legislator being in charge of oversight
  • Requesting a new office space
  • VanDeaver – Asked about the space requirements for new office and if the Bush building would suffice
    • 150 people potentially in the next five to size years
    • We need a large space to attract and attain staff
  • Gervin Hawkins – Asked about current staff and staff increase
    • We have 90 and suspect 120 by the end of biennium
    • 50% investment professionals and 50% operational staff
  • Gervin Hawkins – Asked about current revenue
    • Around $2.2 million form the ASF is generated
  • Gervin Hawkins – Asked where the revenue goes
    • Everything is paid out of the PSF
  • Gervin Hawkins – Asked if the bill is a one time cost
    • The buying of the building is one time and the rent will be monthly
  • Bryant- Asks if the PSFC funds charter schools and what is the process of approval for PSFC bonds
    • The legislature put in place additional protection relative to school districts and that they have a minimum bond guarantee rating
    • The charter district reserve fund
    • The ability to have real estate protections funds helps fund as well
    • Those are the main three protections the legislature put into place for schools
  • Bryant- How many schools dropped below bond investment rate?
    • Didn’t have specific names

 

Teacher Retirement System

Mathilde Mogensen, Analyst – Legislative Budget Board

  • LBB Presentation Found Here
  • Increase for payroll of growth is recommended
  • $46.3 million increase in general revenue for TRS care
  • $105 million increase for administrative operations

Brian Guthrie, Executive Director – Teacher Retirement System

  • Manage three separate trust funds
    • Pension
    • Active members
    • Retirees
  • TRS members do not participate in social security, so TRS is their sole retirement benefit
  • TRS is below the threshold of what is actuarily sound
  • Negative return with the markets down
  • Years before got a return of 25%
  • $1.1 billion scaled cost for retirees
  • El Paso Office open and very successful requesting to open another onsite TRS center for access to more rural places
  • El Paso is a long distance from Austin, allow less travel for those members and getting access to their TRS
  • TRS Active Care is discussed
  • 90% of districts participate in active care
  • Active care issue, ARPA dollars $203 million to buffer for COVID, that fed money will not be there next year
  • Also received $435 million from the governors a office to offset expenses for COVID is the past two year which will also not be there anymore
  • The funds were used to hold premiums constant for active care
  • One time source, the premiums will go up if we don’t revise money to keep the premiums constant and low with inflation and without the additional funding unless the state funds some
  • Medical inflation is discussed as a main issue and concern
  • List three options to help stabilize the premiums in the next year
    • Option 1: 1.4 billion cost to hold the premiums constant for the next two years
    • Option 2: would be paying for medical inflations over the next years, would cost over 900 million dollars
    • Option 3: 400 million next biennial, increase premiums over a course of years instead of doing a big increase all at once
  • Removal of a rider to hire a communication consultant
  • Bryant- Asked how the funds operate
    • Three separate trust funds for each of three programs TRS has
  • Bryant- Asked if TRS is tracking the industry needs well
    • Hired a third party consultant to help track
    • Found that active care on average is 13% lower versus other providers
    • Usually 5% or less
  • VanDeaver- Based on your testimony and gap about federal funds, if we do appropriate 1.4 billion to not increase in premiums we are creating a cliff and making a bigger gap?
    • Yes
  • VanDeaver- Asked about if they just provide a cost of living adjustment (COLA) versus paying a one time bigger check what would happen
    • Says they need to be given a specific dollar amount and then we figure out how we structure it could be a one-time payment or a biweekly check
  • VanDeaver- Asked what would happen if they stopped surcharges
    • The surcharges are paid by the district if they hire a retiree back into an active position
    • $35 million in additional money is what we receive
    • If the state instead of the district were to pay that it would help save schools money
  • VanDeaver- What would the communication consultant cost
    • Very small amount just around $23,000 is the range we are looking for
  • Isaac – What percent of the school employee are eligible for the care?
    • They’re all eligible
    • We have a 50% participation rate
    • The districts that to do not participate in active care do not get any of the federal money in interim
    • Some districts saw a decrease, but month premiums were just capped at zero
    • The cost of healthcare depends on where you live as well with urban areas having higher medical costs
  • Bryant- Asks if for the past 23 years that have gone by there’s been and no cost of living adjustment (COLA) for this group of people (teachers)
    • Most other state agencies have a COLA put in place but we do not
  • Bryant- There’s been no ad hock COLA for the past years thought? How do our contribution rates compare to other states?
    • 5% and most other states make contributions to social security and pensions funds
    • We are the second to lowest in the country
  • Bryant- Asked the cost of righting the past 10 years of inflation and what the increase would have to be
    • It would be a significant amount of money and much more than the bills that have been discussed earlier
  • Bryant- If we started today and went forward how much would it cost to give all these retirees a price of living?
    • The contributions rates would have to double
    • A constitutional issue would happen
    • But could be changed with a legacy payment like the ones done for ERS last session to kind of structurally create a COLA
  • Bryant- So how much would agency payment then be?
    • 4-5 billion a year is an estimate
  • VanDeaver- you sold the building of red river are y’all still in there?
    • We still in there and it is not vacant we are just quiet tenants
    • We are moving our investment division to miller in the next years

 

Optional Retirement Program

Mathilde Mogensen, Analyst – Legislative Budget Board on ORP

  • Is offered as an alternative to the TRS
  • For higher education institutions who want the ability to move between states
  • 6% state contribution rate
  • No questions from members

 

Public Testimony

Christy Rome, Texas School Coalition

  • Recapture will reach $5 billion dollars this school year
  • Property tax relief is important
  • Increase base of allotment
  • $900 increase of allotment
  • To make dollars of schools have the same buying power they had 5 years ago
  • Bryant- The best way to help is by increasing allotment?
    • Yes

Robert Norse, on behalf of himself

  • Wants student enrollment instead of attendance based funding

 

 

 

Mary Lynn Pruneda, Texas 2036

  • Increase basic allotment to raise teacher pay
  • When looking at STAAR reading scores but 87% of campuses are rate A or B
  • For the first time in the history of STAAR exam through HB3 the highest rate of on Texas students on grade level

 

Dr. Douglas Killian, Superintendent of Pflugerville ISD

  • Invest in a separate school mental health allotment
  • Since HB3 inflation has grown around 4%
  • We want to provide a COLA for teachers and staff such as bus drivers and staff
  • $900 increase in the basic allotment
  • Gervin-Hawkins- This is the first time Pflugerville has ever paid?
    • We had a lot of growth and kids are not coming to school as much as they used to
    • Why we like the enrollment model better

 

Hailey McMahon, Texans Care for Children

  • HB1 allotment for a sperate school mental health allotment

 

Jon Sanchez, Operation Warm

  • Focusing on communication with parents
  • Connecting families to resources needed for their children to thrive
  • Request for $800,000 to match private funding provisions
  • We give coats to everyone not just students in need to destigmatize the facts that there’s some student who need a coat because they can’t afford it

 

Texas Mobile STEM Lab

  • Requesting 7-million-dollar fund increase
  • 13,000 students already been served

 

Steven Aleman, Disability Rights Texas

  • Underfunded by the state by 3.6 dollars for the biennium
  • Increase in transportation allotment
  • VanDeaver- Do you support the SSES program?
    • It is an outcome of the pandemic
    • It is a supplemental program which we are grateful
    • We first need to confirm the SpEd in school

 

Chandra Kring Villanueva, Every Texan

  • Larger benefit for the everyday Texas
  • Increase basic allotment
  • Move to enrollment based funding
  • Property tax is only benefiting only the wealthy
  • Isaac- Do you know property tax help the elderly?
    • The elderly have a freeze on their tax so this committee hurts renters
  • Bryant- Expand more on how the property tax only helps the wealthy?
    • The lowest quintile of wealth in the state are not helped
  • Bryant- We left out retired teachers with no COLA, have we met our responsibilities to school children and teachers would we have a surplus?
    • It is not a surplus it is a beginning budget, if we were paying more in the basic allotment they would be able to afford rent and they should have been properly funded
  • Isaac- We have a surplus because we overtaxed
    • We have a lot of unmet needs like keeping school funding being stagnant for the past four years

 

Will Hallman, Raise your Hand Texas

  • Inflationary adjustment to basic allotment as purchasing power decreases overtime
  • Teacher supports
    • School help programs
    • Fund the mentorship program
  • Evetime the increase of basic allotment happens only 30% goes to staffing so we would like for other ways to increase teacher funding

 

Chloe Burke, American Heart Association

  • AED and CPR training for all high school students

 

National Social Workers Association (NASW)

  • Advocating for a separate school mental health allotment

 

Patsy, Advocate

  • Have at least inflation adjustment per pupil amount
  • Buy foods for kids so teacher need the extra pay
  • Teacher Incentive Allotment only gives money through testing
  • Disincentivizes teaching kids with special needs
  • Only teachers teaching already high performing kids gets money
  • The raise needs to be give to support peroneal as well

 

Andrea Chevalier, PhD. Director of Governmental Relations at TCASE

  • 2 billion dollar underfunding of SpEd
  • HB1 funding is under recommended amount

 

Tasha Moore, CEO Communities In Schools of Texas

  • Largest provider of school based behavioral support for students

 

Rebekah Ozuna, AFT Union

  • TEA report
  • Also consider funds for teacher wellbeing

 

 

Carrie Griffith, Policy Staffer, TSTA

  • Properly fund infrastructure to support and maintain teachers
  • TIA is not predicted and obligated to create this plan
  • TIA is not eligible

 

Paige Williams, Texas Classroom Teachers Association

  • Teacher wide shortage
  • Teacher pay raise of at least 10,000 dollars
  • The State needs to direct districts to give funds to teachers
  • TRS is underfunded

 

Asian Texans for Justice

  • Fund a school mental health allotment
  • Suicide is the leading cause of death for ages 15-24 for AAPIs
  • Bullying, stereotypes, and intergenerational trauma
  • 34% are limited in English proficiency

 

ExeterPACT

  • Funding pay raise for all Texas educators
  • Increase for active employer funding insurance
  • Do this through budgetary factors not just through a bill or writer
  • COLAs for retirees and prefunding it

 

TRS Specific Public Testimony

TRS Staffer

  • We need livable retriable benefits
  • I do not have livable wage as a retired teacher

 

Rita Runnels, Texas Retirement Plus (AFT)

  • I retired in 2008 and have not had a COLA for 15 years
  • I was supposed to invest increases
  • We have data showing many retirees use their fund for their car, medicine, and pay for chronic illnesses
  • Many retirees are having to reenter to work force

 

Tim Lee, Director of Texas Retired Teachers Organization (TRTA)

  • Focused on writer 21
  • COLA raise
  • Inflation is a pay cut for retirees
  • Bryant- Would you guys propose a tiered system from a COLA?
    • Older teachers would need more help than a flat across the board increase
    • Many old teachers has lower wages when they worked