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The Expenditures working group of the Texas Commission on Public School Finance met on September 13, 2018 to review their recommendations.

This report is intended to give you an overview and highlight of the discussions on the various topics the committee took up. It is not a verbatim transcript of the hearing, 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.

Chair Dan Huberty

  • Have heard a need to holistically change the system
  • Will walk through items but points out the discussion is about reallocating funds not eliminating funds

Royce West

  • Viewed it about putting new money in system and reallocation
  • Have a recapture issue in State of Texas
  • Trying to put more money in basic allotment to help deal with issues such as recapture
  • Still hopes there will be chances later to find new monies to put into the system

Keven Ellis

  • One to make sure all these pieces work together as one unit

Four Groups for Consideration

Reallocation of Resources – approx. $5.3 billion

Reallocate CEI investment – $2.9 billion

  • Leo Lopez, TEA – cost of providing education has changed over time, taken money used on CEI and move it to spend in other ways
  • Huberty – LBB was supposed to study it and give an update, woefully behind and this is not practical anymore so it creates a pool of money to reallocate to a different line item

Reallocate Hold Harmless from 1990’s – $30 million

  • Huberty – part of formula that needs to be updated

Reallocate CH 41 early agreement – $50 million

  • Lopez– purchasing attendance credits, if contract is submitted by Sept. 1 district would get a discount so this would eliminate that discount that is not based on any district or student characteristic so this funding could increase pot of available school funds
  • Ellis – this is not about a pre-payment discount but one for just agreeing to pay

Reallocate Gifted and Talented Allotment (GTE) – $165 million

  • Huberty – Cap is a 5% and 99.9% are getting maximum cap, not suggesting programs go away but its additional paperwork so not eliminating the funding but reallocate those resources
  • Lopez – not expecting the district to stop those services, streamline formulas that deliver those funds
  • West – and we could put those funds in basic allotment which would also have an impact on recapture

Reallocate High School Allotment – $400 million

  • Huberty – check the box, and every get this with no reason or rationale

Property values used for current year – $1.8 billion

  • Lopez – Right now prior tax year is used, fast growth districts get to keep lag money (keep extra funding) vs. districts in declining property values then there is a gap so this would bring everyone in line
  • Huberty – sums by saying trying to keep it on a level playing field
  • West – would this burden districts by changing current year values, local collections would still come in as usual but would change is state would have to fund an estimated property values and then do settle up when they get Comptroller values

Items to Change to Existing Programs

Increase Comp Ed Allotment – $1.2 billion increase

  • Lopez – each district would get a blended weight based on the makeup of their campuses between .225 to .275 per each campus composite weight based on the makeup of each campus
  • West – current weight is?
    • Lopez – .2
  • Ellis – asked about methods to determine?
    • Lopez – free and reduced price lunch is still the measure for the estimate but they can use a different indicator
  • Huberty – key is that the weight has not changed this since 1984 so it is out of date, campus is getting money because of their demographics

Transportation Allotment change to Mileage – N/A

  • Huberty – Figured out cost is about .80-.83 cents per mile, suggestion is to set this by appropriations but points out that only 25% of cost of transportation are currently being covered
  • Huberty – suggests look at costs plus CPI
  • Huberty – up to legislature to decided ultimately in appropriations so it could be a cost neutral approach
  • Huberty – don’t want to reward inefficiencies so that is why they are talking about mileage

Transportation Allotment – $60 million increase

  • Huberty – for 41 districts since today they are not abled to get compensated for their transportation allotment

Stand Alone Small-size and Mid-size District Adjustment – $0-$400 million increase

  • Huberty – goal to increase basic allotment but need to add additional money anywhere from $0 to $400 million, need this to be transparent and identify cost and this ultimately depends on the basic allotment

Increase NIFA – $76.25 million increase

  • Huberty – Increase total to $100 million, intent of NIFA is to help fast growth school districts to open up their campuses
  • Ellis – would that fully fund NIFA?
    • Lopez – would be very close

Expanding CTE to include 6-8th grade – $20 million

  • Ellis – also points out the number courses in HS may not be proportional to those in MS due to campus limitations

 

New Programs

Dual Language Allotment (weight .15) – $15-50 million

  • Lopez – assuming some students will move from the bilingual program to the dual language program and costs will increase as more move into the program

Dyslexia Allotment (weight .1)- $100 million

  • Huberty – believes since this is not being funded that children are not being identified
  • Lopez – this allotment would be its own stand alone allotment

K-3 Economically Disadvantaged/ELL Allotment (this label will be changed) – $780 million

  • Lopez – trying to provide education in early grades and this funding could be used for full day pre-K
  • West – believes title needs to be tweak so schools can use this for all day pre-K if they want
  • Huberty – early education resource options would be provided with this allotment
  • Ellis – would this be incentive based?
    • Lopez – based on students identified

Grade 3 Reading Bonus – $400 million

  • Lopez – incentive for performance as recommended by the outcome working group, weight can be adjusted depending on Commission decision for eligibility and population Commission wants
  • Huberty – all students are included in this recommendation
  • Lopez – this allotment is based around 160k students

College Career Military Readiness (CCMR) – $400 million

  • Huberty – this is not a weight but an amount
  • Lopez – taking reallocation for high school allotment and making those funds available for this program for students meeting any one of those criteria
  • Huberty – this measure aims at 60×30 goals

Teacher Compensation Program – $100 million

  • Huberty – no weight but suggesting an amount, a variety of programs could be used but suggesting incentive based for teachers and thinks it’s important to reward excellent teachers
  • Huberty – not talking about making this a grant but statutorily putting it in and then grow it, it will take time to get this developed
  • Huberty – created by school districts and then submitted to TEA for approval
  • West – wants to continue to encourage teachers to be at schools they need to be at
  • Lopez – notes there may not be fiscal allotment in year one depending on how long it takes to ramp up
  • Huberty – agrees fiscal impact would be in 2021

Extended Year Summer Pilot – $50 million

  • Huberty – could also grow into this program, need to create rules for this program
  • Lopez – up to an additional 30 days for instruction for students

Additional Items and Changes to Current System  

Using remaining allocation to increase basic allotment (BA) and put into statue

Tier 2 Guaranteed Yield Changed to % of Basic Allotment

  • Huberty – targets the copper pennies
  • Lopez – $3195 yield meant 88% of students in system were equalized but over time this % has decreased
  • Lopez – Instead of hard number, possibly indexing yield to some percentage of basic allotment which would have an effect of reducing recapture for Ch 41 and aid for property poor districts
  • Brister – how this impacts court efficiency argument, does it change ratio on efficiency rationale?
    • Still maintain current structure just changing the level

Tier 1 Guaranteed Yield Decoupled from Austin ISD

  • Lopez – the golden pennies are more than double what the basic allotment is, recommendations to decouple from Austin ISD they could still pick a percentage but would not have an automatic level that pushes in based on what is occurring at one specific district
  • Huberty – don’t know what this market will look like years from now so this is about making holistic changes, not picking a percentage today so there will need to be study on it

Concluding Remarks

West – Looking at reallocations and increases and sees a difference of about $1.69 billion in these numbers in terms of what should be put back into the system, argument of state share and that state assuming a greater responsibility

Huberty – that is my view of the percentages as we go

Huberty – trying to make holistic changes, recommendation help everybody (recapture districts, small, rural, etc)

All items were approved and report will be pulled together to submit to Commission