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The Texas Commission on Public School Finance met on July 10 to hear invited testimony and to consider the Outcomes Working Group recommendations white paper. (link)

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

 

Opening Remarks

  • Chair Brister invited any comments related to this meeting
  • Have received a lot of input related to programs, have not received many recommendations on how to fund them

 

Leo Lopez, Chief School Finance Officer, Texas Education Agency

  • Link to TEA presentation
  • Discussed total public education funding in Texas
  • Comes from Federal Funds, State Funds, primarily sales tax, and Local Funds
  • State responsible for $22 billion
  • Recapture (as its own category) responsible for $1.7 billion
  • Local taxes $30.5 billion
  • Federal $6.2 billion
  • West – related to state expenditures by vendors how does that look?
  • Discussed chart showing related expenditures and what expenditures are in each category between state, local and federal (slide 4)
  • Total statewide funding has increased 53% from FY 2006 to FY 2017 ($39.6 billion to $60.6 billion respectively)
  • Brister – so this accounts for inflation?
    • Correct this is relative purchasing power
  • Bettencourt – you are showing that we are spending over $60 billion but this shows constant use of 2006 dollars
    • That is correct
  • Brister – clarified the graph
  • Ellis – this graph does not account for student growth?
    • That is correct
  • Conley Johnson – requested 2006 number with inflation for 2017
    • Will provide that, but it is just over $50 billion
    • Will provide the material to the committee
  • Per student funding and increased 29% from 2006 to 2017 ($8,800 to $11,349 respectively
  • Accounting for inflation, funding has outpaced inflation
  • West – graph appears to show that funding has not kept up with inflation
    • Clarified that the dollars spent in FY 2017 have kept up with inflation
    • Will provide the adjusted amounts
  • Ellis – this is based on student population, if you did this on WADA basis, what would it look like?
    • Have not conducted that analysis, would expect the trend line to look very similar but can provide that information to the committee
  • Killian – have you done this type of analysis with each type of funding source?
    • Did not feel like the inflation adjustment was necessary on each category but can provide that information
  • Discussed trends within each major funding source since 2008 (after tax compression)
    • Statewide funding has increased 14%
    • Statewide recapture revenue has increased 51%
    • Statewide local funding has increased 48%
    • Statewide federal funding has increased 47%
  • Brister – in terms of overall percentage it looks constant?
    • Since 2007 the ratios do appear to be consistent
  • Reviewed projected state and local share of funding for 18-19 biennium
    • Total shows about 58% local funding and 37.5% state funding and 4.5% recapture
  • Bettencourt – noted that this is a very good presentation showing relative numbers. page 9 charts showing the percentages is very helpful
  • West – in terms of operating costs for school districts, how do you differentiate revenues?
    • Did not differentiate between debt service, etc.
    • Districts do not report expenditures broken out between federal, state and local level
    • Could look at school district expenditures in operating versus non-operating
  • West – what would give us the truer sense of the state?
    • Can provide school district operating costs for the committee broken down in a similar way
  • Conley Johnson – can you break out the operating dollars with debt, to give a better sense? Debt service cannot be used for direct service to students
    • You would like to see charts in slide 6 and 7 without debt service, will provide that
  • Brister – concerned with taking out too many things to the point that they are not an accurate reflection of the current situation
  • Bernal – this is the second or third time that we have received this information, and concerned with changing the information to reflect a different narrative than we were told at the beginning of the process, and that there may be less of an imperative to act now than there was at the beginning
    • Clarified that this information does not include FSP
  • Brister – the comment implies that somebody is ‘rigging’ the numbers, and that is not accurate. The idea is that we can compare historical data to better figure out where we stand
  • Bettencourt – for the first time we are seeing the expenditures ‘all in’ and are able to finally give a good picture of education funding. We have received multiple versions of the information, but this is something new that we are seeing for the first time
  • West – need to decide what we consider ‘full funding’ of education is and if that is adequate then and adequate now. need to come out of this with definition of full funding
  • Killian – cautions the commission that the issue is in the details and that overall system awareness is good, but it is not the experience at the district level
  • Brister – there are many nuances and caveats to make but do not want to muddy the waters with bad information
  • Discussion of areas that have changed significantly in the last 10 years
  • Bettencourt – again having an all-in number is the baseline to see any changes or fluctuations in the expenditures

 

John McGeady, Assistant Director, Legislative Budget Board

  • Clarified goal and choices in the data and graphs shown in the TEA presentation
  • Much of the confusion in total expenditures comes from incorporation of federal funding which is typically left out because the state has no control of that amount, and federal funding is not relevant to how the funding flows through the system
  • LBB has approached the information with just state and local for clarity
  • West – why cat we take into consideration federal funding?
    • There are statues that the state cannot take that funding into account in planning and budgeting for education
  • Believes that people are asking different questions and require different data sets to answer them
  • Reviewed why PEIMS data is not used at LBB
    • LBB considers state appropriations and related expenditures not district expenditures
    • Budget analysis requires budget data
  • Brister – using budget data not expense data, and the question from the legislature is how much should it/have we spend to run the schools?
    • Correct
    • There are some differences like I&S revenue which is not eligible for FSP
    • Are focusing on what is spent by state agencies and will not include things that do not affect the state budget
  • Compared PEIMS data v. State Budget Data
    • Generally speaking the growth trends are consistent between the two
  • Bettencourt – have we ever broken this information down between classroom expenditures v non-classroom expenditures?
    • Do not believe so
    • Believes PEIMS data is well equipped to provide that information
  • Discussed trends in state share of spending
    • PEIMS data v. LBB numbers show very similar trendlines
  • Brister – FSP trends show state share is sliding down, due to things that are not included in PEIMS includes
    • State funding has stayed fairly level over the period of time in the charts while local has increased
  • Discussed LBB FSP state share calculation
    • FSP information only includes state aid and local revenue statutorily defined as part of the FSP
    • Fundamentally if local revenue goes up, state aid goes down all things being equal
  • Have historically considered recapture as local funds because of funding sources
    • State share calculation is intended to quantify the relationship between sources of revenue
    • May be some complications by redefining recapture as state funds
  • West: One of the things we need to do is come up with a characterization for this money. Whether its local dollars or state dollars.
  • Taylor – what we are finding is complications in reporting this data to the public
  • Discussed refining the figures and the footnotes

 

Outcomes Working Group Recommendations

  • Williams – discussed and described the Outcomes hearings and testimony lead to recommendations
  • Link to presentation
  • Reviewed charts showing school districts by size compared to STAAR ratings by campus poverty
    • Additionally, reviewed similar data for charter schools
  • Attempted to focus on the goal of 60X30TX plan
    • Currently at 40% or the 60% goal
    • Need to get 90,000 HS students per year to reach the goal of post graduate certificate
  • Discussed STAAR Benchmarks and expected outcomes from 2018
    • General trend shows 90% graduates with only 28% completing post grad certificate
  • Assuming standard trend, would not reach 60X30 goal until 2050
  • Bettencourt – does this information include migration?
    • It does
  • Bettencourt – we effectively have to rely on migration to reach that goal, why are we not capturing that in the data?
    • Effectively we are
  • Bettencourt – discussed graphs showing the trend that shows that Texas could not achieve the 60X30TX plan, just heard in a hearing that it is mathematically possible to reach the goal
    • Can get to the 60X30TX goal through heavy in-migration with consideration for those currently underserved students achievements
  • Bettencourt – discussed the need for the data to include migration
  • Reyna – concerned with const of higher education leading to lower numbers of those who achieve post graduate certificate
    • Noted that community college system in Texas in among the lowest in the country
  • Huberty – reviewed initial data shown, does not appear to show that we are not going to meet the goal
    • Attempting to show that we need to focus on those in Texas so there is less reliance on in-migration to reach the 60X30TX goal
  • Discussed potential earnings loss by those who are not completing post-graduation certification
  • Noted a significant mismatch between workforce and labor needs
  • Must meaningfully address low income student achievement
  • Premise of 60% achievement in K-12
    • Recommends spending more dollars in specific strategies targeting low income and English language learners
    • Noted 80% of k-12 growth came from low income students
  • If low performing low-income districts could perform at high performing levels would increase 44-55% achievement
  • Common theme #1 – ‘ready to learn’ – funding should ensure that the ~225,000 Texas Students annually failing to meet the state standard in 3rd grade reading is substantially reduced
  • Common theme #2 – ‘Ready to Teach’ Funding should ensure that top graduates view public education as a rewarding career, every new teacher candidate is financially incented to seek high quality teacher preparation programs, effective teachers are paid well enough and soon enough to stay in the profession, and effective educators are financially incented to teach students facing the most challenges
  • Common theme #3 – ‘Ready to Earn’ – funding should ensure that graduates are ready and do not require remediation in higher ed.
  • Common Theme #4 – Systematic Incentives Matter – Funding should ensure that financial incentives tied to the achievement of our most critical outcomes are put in place to overcome the systematic challenges
  • West – as it relates to school districts allocating resources, your analysis did not get into the detail level to determine if the administration of the school board and if it significantly affects student achievement?
    • Did not conduct that level of detail but can
  • Bettencourt – did not see the goals include PTECH to reach the 3rd grade reading goal?
    • Focused on the goal not the method
  • Bettencourt – noted Dallas areas achievement with low income students compared to Houston
  • Taylor – discussed population growth and ensuring that students across the board are prepared
  • Bernal – noted the need for statewide programming as opposed to specialized programs
  • Recommendations of the working group include investing more money in public school that is new dollars
  • Recommend that the funding flow through formulas not grants
  • Recommends funding include specific goals and incentives that are equitably determined and recognized increased poverty at a campus
  • Huberty – the expenditures group has worked through costs associated with the recommendation made by the outcomes group
  • West – funding only goes through school districts; how do you recommend that the funding get to the campus?
    • Appropriate incentives to get that funding to the campus will have to be determined, the goal in to incentive more funding for low income students and campuses
  • Incentive #1 – Funding for every 3rd grader meeting state’s ‘meets’ reading standard
    • Systematic changes will seek to improve: increased attendance into pre-k programs, kindergarten ready assessments, placement of better teachers in critical non-tested early grades
  • Discussed rates of kindergarten ready students across the state
  • Brister – what is the incentive?
    • The recommendation is to incentivize districts to fund programs that work toward improving 3rd grade reading
  • Brister – if it is a block grant, how does that go toward incentives and what is the lag time to see results?
    • If we apply an added weight to achievement in grades k-3 the incentive money should go toward programs which will increase achievement in 3rd grade reading levels
    • The additional weights and measures will show progress
  • Brister – what happens to schools that do not improve?
    • Follows achievement
  • Ellis – are the two parts linked?
    • They are absolutely linked
    • Believes that incentives should be enough to change actions but not encourage bad behavior
  • Incentive #2 – Funding for every 8th grader meeting state’s ‘meets’ standard in reading and in Algebra 1
    • Systematic changes would seek to improve: completion of P.S. degrees within 6 years of high school graduation, reduce gaps between high school graduation rates and college readiness
  • Bettencourt: Wants to make it clear that if you do not pass algebra 2, then there is no future for you in STEM. It is the foundation.
  • Incentive #3 – Funding for every H.S. graduate assessed as college/career ready who successfully achieves industry certificate or enrolls in P.S. or Military
    • Systematic changes would seek to improve: transparency into post-secondary outcomes, increase enrollment in cost-effective community college
  • Discussed post-secondary completion rates across the state
  • Incentive #4 – Provide Optional ability for districts to implement multi-measure evaluation system and receive state funding to better prepare, retain and strategically staff their better teachers
    • Systematic changes would seek to improve: increase in number of quality teachers
    • Discussed 10-year phase in of costs
  • Discussed teacher turnover statewide
    • Noted rate of teacher turnover in high poverty districts and campuses
  • Briefly discussed ACE Program and increased achievement
  • Recommends adjusting compensatory education funding in recognition that ‘free and reduced lunch’ percentages are a very simplistic measure
  • West – in terms of the use of poverty as the only variable, believes that other factors should be included
    • Certainly, take more into account that median income
  • Recommends strongly consider eliminating the five end-of-course STAAR assessments (use act/SAT as measure)
  • Discussed that EOCs are not accomplishing the mission they were intended for and by using something more understandable like ACT/SAT would be a better metric and something more understandable by students and administrators
  • Recommends districts choosing to implement a full day pre-k program, consider crediting the appropriate full-day attendance for purposes of funding within the Foundation School Program
  • Recommends that TEA financially incent the use of dual credit language strategies with ELL learners and disallow this as an accepted approach toward ELL instruction for larger districts exceeding 5,000 students
  • Recommends align current CTE weight toward CTE programs of study that are vigorously tied to attainment of living wage credentials aligned with current workforce needs and allow CTE weights to be applied to 8th grade students taking high school CTE courses allowing for a coherent sequence/pathway
  • Discussed need for real purpose of CTE programs by working with labor groups
  • Killian – would like to add 8th grade CTE funding and not limit them to industry certifications
  • Recommends amending legislation to allow school reconstitution by the end of year 3 for failing ISD elementary and middle school campuses with an ACE-like school turnaround program with the state providing matching funds to reduce district costs
  • Could be implemented after being in IR for 2 years
  • Ellis – is there something like ACE for rural districts with one campus?
    • Do not have an answer at present, but is a very important thing to look at
  • Recommends TEA amend the accountability system to not penalize school districts in helping formerly incarcerated individuals receive their high school diploma or GED
  • Recommends state funding target professional development training towards schools/districts willing to launch learning and personalized learning pilots that help students wishing to matriculate faster that their peers
  • Recommends additional state funding be awarded if a high school achieves the post -secondary readiness academic distinction
  • Recommends allowing 3 and 4-year old children of Texas public school educators to be eligible for free public pre-k funding
  • Taylor – discussed using free pre-k as a retention tool and likes the idea
  • Conley-Johnson – concerned that the incentives are wide ranging enough to be applied broadly, would you recognize incentives for schools that are closing gaps? And what about consideration for differentiated goals for students with disabilities? Would like to see severely disabled students able to benefit from CTE funding for life skills programs
  • Welcomes additional feedback on the recommendations, expecting the feedback will help members of the expenditure group
  • Bernal – would expect to get feedback and provide revised recommendations
  • Discussed the potential for incentives causing high stakes testing to become more high stakes
    • Want the incentives to be based on multiyear proficiency
    • Do not want the incentives to be high enough to cause bad actors
  • Believes each session the legislature should evaluate progress against the 60% goal along key steps in pk-12/higher ed pipeline
  • Discussed testimony highlights from the workgroup
  • Discussed value of incentivizing goals and of the value for students achieving post-secondary credential
  • Bettencourt – discussed math associated with expenses related to incentives
  • West – did you take into consideration of the impact of the costs of medical and incarceration rates as mentioned in the recommendations?
    • Knows that more educated population reduces the costs associated with incarceration
  • Brister – how can we incentivize the principal/superintendent/school board to move forward with programs?
    • Cannot legislate judgement and leadership but leaders do focus on revenues and budgets
  • Ellis – have you considered how much the base should be compared to incentives to be a benefit toward retention?
    • Have not but the expenditures work group will have thoughts on that
  • Brister – proposing an increased weight for 3rd grade reading, teacher incentives and incentivized outcomes?
    • Correct
  • Brister – discussed potential teacher incentive programs and equity between the programs
    • Believes that the programs will be locally determined and controlled with some guardrails
  • Brister – what is the charge back to the working group?
    • Will work with higher educating working group to ensure that the numbers related to 60x30TX plan are accurate
  • Huberty – have spent a lot of time and money on testing, related to getting rid of EOC, did you hear anything related to cost savings? And what did you hear about unfunded mandates?
    • The trade off for the EOCs would be relatively cost neutral, with some savings to districts that are already paying for that
    • Did hear and include in the white paper, should provide much more flexibility to districts on how to spend the incentive money
    • Also need to be sure that the accountability system follows or is in line with the goals and incentives set out by the commission

 

Closing Remarks

  • Brister – discusses various meeting dates, Expenditures will be meeting Aug 9th and they will cancel the full commission hearing in Aug. The Full Commission will meet in September. Dates will be circulated to the members for options in September or October.
  • Bettencourt-  noted the Revenues working group is having several ideas scored currently such as the Governor’s Plan weening off Robin Hood System, and several other items they have discussed
  • Huberty-  The Expenditures working group has compiled 200 recommendations. The TEA is preparing the specific recommendations. Would like to try to get through them to a vote and then would need to prepare a final report… for example CEI may have several different recommendations they need to work through.
  • West- Asked about procedure, will commission members receive all reports from working groups and then vote on them?
  • Brister – thinks presentation today was a wealth of information, all programs mentioned sound like great ideas, the Commission needs a bit more information but notes he likes prioritization in the working group report
  • Brister – It will be up to the working group to draw up the reports but the Commission will vote on them. He does want to come up with a final report to present to the legislature.