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The Texas Commission on Public School Finance met on May 3rd  to take up their agenda with a focus on revenue, finance, and tax.

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.

Early Childhood Education
Alexandra Hales, Executive Director, Good Reason Houston – Early Matters: A Historic Coalition on Early Education

  • Provided details on Pre-K being instrumental to helping children read on grade level by 3rd grade which is linked to future success
  • Brister – asked if statistics were controlled for various backgrounds, please just let them know as presentation continues
    • Details are overall but will point out as she continues
  • When disaggregated details by income and race, there is a bleaker picture on children attending Pre-K and obtaining kinder readiness
  • Points out districts in recapture are not able to count students in full day Pre-K
  • Pre-K also helps with reduction in certain social risk factors in addition to increased Kindergarten readiness
  • Low income parents are unable to enroll their children in a half day program
  • Makes the following recommendations: funding full day Pre-K, provide incentives for districts that meet 3rd grade reading standards, provide recapture districts full ADA credit
  • King – asked for a total dollar figure if did full day pre-K?
    • TEA estimate is about $515 million said Williams but cost would not incur day one
  • Bernal – asked witness to elaborate on incentivizing districts and why they recommended it
    • Teachers may be moved into tested grades
    • Williams – its all about changing incentives for principals and staffing
  • Ellis – asked about 3-year-old vs 4-year-old Pre-K?
    • Does not have those details by notes Susan will have more details
  • Brister – asked if low enrollment may be reflect parent involvement, motivated parents get their kids there
    • Half day Pre-K is problematic, if it was full day believes more would participate

Susan Dawson, President and Executive Director, E3 Alliance – Child Outcomes

  • Has data to show significantly high enrollment and attendance from full day programs vs. half day programs
  • Highlighted Ready Set K, readiness aligned for Pre-K progress monitoring and assessment
  • Argues $30 million a year could be returned to the state if children eligible but not enrolled in Pre-K readiness
    • Uses Lori Taylor study on return on investment/costs
    • Believes there are even additional cost savings not covered in student
  • Summary is that Pre-K is important for kindergarten readiness and Kinder ready is large predictor of students’ success to approaching standard in 3rd grade
  • Jesus Garza, former CEO with Seton Health Care, as part of E3 presentation, spoke and argued that indicators show that children were ill prepared to enter the workforce and that preparation happens at an early age
  • Taylor – did I head you say if we spent more on Pre-K we could save more long term?
    • Dawson – yes from lower retention in grades, required interventions to bring student back on grade level, etc
  • Ellis – how far out did you look regarding grades?
    • At first was to 3rd grade but can now go back and review more grades
  • Regarding Killian’s question on trends in central Texas, noted she has seen a drop in kinder readiness about 2 years ago and have gone back to study it
  • Killian – can Pre-K help with this?
    • Found that services that would have been available to families with low income were cut at a federal and state level in 2010 and there was a significant reduction in services as a result
    • Teachers are saying that children coming in don’t have self-regulation and underdeveloped social emotion so need services which are coming back and pre-K
  • Johnson – asked about ROI regarding non low-income Pre-K students or potential savings?
    • Have not looked at return on investment but have looked at outcomes and both groups of students benefit but there is a higher benefit from low income Pre-K students

 

Ruth Lopez Turley, Professor of Sociology, Director, Houston Education Research Consortium, Associate Director, Kinder Institute for Urban Research – PreK in Houston ISD

  • Found student significantly more likely to be school ready if they attended Pre-K
  • Argues there is room for improvement, found number of variations in benchmarks
  • Notes teacher professional development and specialized training in early childhood education improvements is most likely to have an impact on student outcomes
  • Recommends target Economic disadvantage and especially Limited English Proficiency students
  • Brister – asked what training should include? Training on classroom management, psychology – what are you taught in that area?
    • Any program focused specifically on early childhood education
    • Williams – things there is a movement in North Texas to train teachers in this space but it includes all the things Brister mentioned
  • Brister – can we get colleges to pay for this rather than the state paying for it? If education departments are not teaching teachers how to teach Pre-K and shifting burden to the state, why?
    • Side comment on alternative certification process

Dr. Esperanza Zendejas, Superintendent, Brownsville ISD – Reaching our Goals: Expanding BISD’s Pre-K Program

  • Reviewed funding source for their Pre-K funding, includes retrieving funds from early high school graduates but they still have to put in approx. $1 million of their general funds additionally also use
    • Tax increase
    • Tuition from parents
  • Issues include need for transportation and need to keep school open until 5:30p, supper program now feeds nearly 18k students
  • The have 3 year old and 4 year old programs
  • Recommends considering using average attendance for 1st -5th for attendance for Pre-K through K
  • Brister – asked for more details on the recommendation
    • Enrollment attendance is also critical because it averages out, when parents keep children home it hurts districts ADA
    • Dawson – Pre-K has worst attendance and different patterns of attendance which shows students are out much more because of more exposure so getting less funding
  • Williams – if only half-day funding in Pre-K and lower attendance, do you get dinged?
    • Johnson – All grades treated the same, funded for Average Daily Attendance and not enrollment
    • Johnson – districts have already experienced outlay for expense whether student attends or not
  • Brister – asked about early high school graduation program, is that more through dual college credit or certifications?
    • Through early college high school courses
    • Some students have need to support the family and get an early start in their careers
  • Bernal – is there a profile of a student who graduates early? Anxious to get to work force or college early?
    • Many of them come from high poverty families, many kids are extremely smart so they are academic achievers who have pressure to support the family
  • Williams – pointed out her district out performs the state and has more economically disadvantaged students
  • Brister – About $1 billion for Pre-K, what do we tell teachers when we can’t give them a raise because we are investing in Pre-K, how do we tell them that Pre-K investment is better than an across the board raise
    • Jesus Garza– in his budget background, if you need more money then taxpayer is willing to pay more for children
    • Brister – heard that from a lot of folks but pressure to lower property taxes
    • Brister – if commission wants to recommend investing $1 billion , any suggestions or arguments on where money is coming from or why this is better than that
    • Zendejas – in other state, more flexibility was given to district on how they spend funds so they determine where best to put the funds
    • Dawson – there are many dollars going to district that may or may not be specific to that purpose so flexibility may be a good idea & there is a way to say investing in Pre-K would provide return on investment within a few years
    • Williams – need to get arms around spend for grade level retention, the other thing is to ask Superintendent on requirements from state that have little value that can be stopped
  • Brister – asked about eligible kids for Pre-K
    • Approximate numbers were provided by members

Linus Wright, Former Superintendent, Dallas ISD and Former Undersecretary of Education, USDE – Testimony

  • Can achieve far more by spending money on a full day program than any other improvement they might make
  • Suggests 4 structural changes – mandate full day Pre-K education of 3 and 5yr old, require more rigorous certification for elementary teachers, eliminate the 12th grade to pay for the 3 and 4 year olds since 12th grade is most worthless and most expensive for schools and allow high schools to use adjunct teachers following the community college model
  • Made other recommendations identified as a “way out recommendations” – such as partner with day care centers
  • Ways to save money – encourage community college partnerships and daycare centers
  • If follow 4 restructuring suggestions – provide for better academic achievement
  • King – Noted there are pathways opened up for partnerships, agrees with concept that 12th grade is useless, how much money would it save asked King?
    • Does not know, but there is a pilot program in Dallas for Pre-K funding for those that graduate in 3 years
    • Williams provides some statistics
  • Brister – don’t want to drive kids away who need 4th year of study
    • Can do it in three just reduce elective courses
  • Martin – trying not to be offended as teacher of CTE courses to Seniors, asked about mandating Pre-K and parents getting to choose to send their students
    • Brister – we mandate 1-12 but there are alternatives, so mandatory does not mean truancy risk
    • Didn’t even have attendance until 1949
    • Legislature has to do what’s right for all not just a few
  • Williams – 12th grade is about prepared for post-secondary education, Brister said maybe we can get colleges to pay for it, King – for colleges they stop looking after Junior year
  • Bernal – would like to hear from Higher Ed on this suggestion, some schools require 4 years of something but given 60×30 plan, how does eliminating the senior year affect that?

 

Weights and Allotments
 Leo Lopez, Chief School Finance Officer, and Justin Porter, Executive Director of Special Populations, Texas Education Agency – Weighted Student Funding Trends under the Foundation School Program

  • Lopez – Gave details on allotments, weighted categories and historical program data
  • Lopez – In FYI 2018, Texas will spend over $10.2 billion on weighted student funding allotments or 28% of Total Tier 1 funds
  • Brister – asked for confirmation on what $37.1 billion or the Total Tier 1 funds were spent on
  • Johnson – this amount on slides is the amount of revenue or allotments provided to districts not necessarily what the districts spend
  • Lopez points out that student enrollment has increased by 63% but the five major special program allotments have increased by 772% – notes there are more details provided in the appendix he can provide later such as how this works in regards to inflation
  • Lopez – Anticipates special education spend will be over $3 billion in FY 2018 and has a minimum direct spending requirement of 52%
  • Porter – provides evaluation and transition guidelines noting LEAs are required to identify, locate and evaluate for special education
  • Lopez – State compensatory education for economically disadvantaged is 0.20
  • Brister clarifies that 0.20 is 20%
    • That is correct, 20% of whatever adjusted basic allotment is
    • Has a direct spend of 52%
  • Taylor – asked about pregnancy related services amounts and what it does for education?
    • Similar to special education so there is a contact hour multiplier so the amounts are not as high as it appears (2.41)
    • If required bed rest, teacher will go to home and will provide list to committee
    • Taylor – students can go online, perhaps the teacher does not need to go to the home
    • Does not have a one year lag on this revenue
  • Williams – asked for more details on the math and methodology regarding the weights, could get an average for comp ed but using the multiplier
  • Johnson – how much of spending is directed by compliance rules rather than actual spending?
    • Could look at what districts are spending but weight is only as good as data is reported that could artificially inflate
  • Porter – activities vary around program; of note in order to be in compliance with ESSA, Texas is moving to one test
  • Johnson – expenses may not reflect true cost such as cost of providing bilingual education, not being able to cost back to program code may result in underreporting of cost and suggest TEA going back and consider compliance rules
  • Taylor – did you say bilingual cannot be used for teachers?
    • Johnson – cannot go to teacher salaries
    • Brister – kinda for salaries but not base salaries
    • Johnson – if limited it to just stipends, materials and books then cost may not be reflected; an underrepresentation on actual amount being spent
    • Williams – spending about $1250 on comp ed but we spend on this money on compliance, instead need to move toward outcomes vs compliance and reporting
  • King – problem for small schools for bilingual is that you may not have access to highly qualified teacher, if don’t have that then you send money back to the state
  • Taylor – to find can’t use funds for salaries is antithetical to what they are trying to do
  • Taylor – asked about SAT/ACT passing rates
    • Will find out more details and get them back to the committee
  • Bernal – asked if this data could be separated by the two different test, scoring is different for each one
    • That should be possible
  • Lopez – If greater flexibility is provided to bilingual then would be just increasing the amount of expenditures reported, change is not needed to make the minimum direct spend requirement
  • Lopez – decrease seeing is more about managerial efforts in expenditures
  • Bettencourt – looking at 30-40% drop in just one year, asked about trend
    • Lopez – would prefer to wait a few years to remark on trend
  • Johnson – this allotment requires spend on stipends and materials so you could see districts that cannot afford stipends but need to buy down class sizes and get teachers
  • Porter – reviews state programmatic guidelines for English Learners (EL), dual language
  • Lopez – continues with discussions on allotments and allowable expenditures for CTE and GT
  • Lopez – under GT believes some districts are reporting costs related to advance placement courses but they should only be counted if part of GT program, believes there is some confusion out there
  • Williams – curious if all districts are at the 5% cap
    • Porter – believes the difference could be in those districts that are identifying more students
    • Brister – maybe just tell us how many districts don’t take the 5%
  • Lopez – Public Education Grants Allotment go to schools who are taking students from underperforming schools
  • Brister – for districts letting students transfers into the school
    • Correct
  • Williams – asked if the total is based on how many are eligible or how many take advantage of the program
    • Will confirm and get back details to the committee
  • Lopez – reviews high school allotments

Israel Cordero, Dallas ISD Deputy Superintendent

  • Overview of P-TECH and outcomes
  • Reviewed national statistics on Early College High School – it raises bar in terms of Associates Degrees and Dual Credit Earned
  • P-TECH is a STEM focused model, Dallas ISD has gone from 5 to 23 campuses
  • Bettencourt – asked who are major partners?
    • American Airlines, Fluor, Accenture, Southwest Airlines, etc – 63 industry partners
  • Bettencourt – calls it a wow moment, stunning achievement on growth of partners and campuses
    • Model allows for 200 partners
  • Bettencourt – what do you need for us to help you be more successful?
    • Will get to later in presentation
  • Secret sauce is building a collaborative charter with colleges in area- progress monitor every week
  • Have 27 guided pathways based on labor market analysis
  • Reviewed cost per campus – about $1 million for the planning year and estimated annual net cost and reviewed financial support such as increased funding for dual credit textbooks, weighted funding for transportation for dual credit, increased opportunities to partner with 4-year colleges and new instructional facility allotment could possibly provide additional allocation for new schools in the school within a school model
  • Did apply for industry cluster and P-TECH Success Grant
  • Williams – Took $795k cost – avg would be about $2k per student but not having to hire teachers for students in program in Junior and Senior year?
    • Community college is helping but working on credentialing teachers but most has been done by adjunct teachers
  • Williams – think about spending $2k for student in program so they get living wage when they graduate so thinking about taxes they pay in workforce and sales tax – funding comes back to state
  • Bernal – how is cooperation between college and district on tuition?
    • Have entire tuition covered in college by scholarship but DISD covers textbook and transportation
  • Bernal – could this program proliferate if the community college charged any tuition?
    • Families that come from low income would not be able to participate
  • Ellis – where he comes from the student is paying, asked if IMA funds could be used for textbooks?
    • Believe can pay for it with IMA funds but many may have already been allocated for specific purposes
  • Bettencourt – what is actual contribution, is philanthropy covering contribution effectively?
    • Many costs pointed out are not philanthropy
  • Williams – said after high school the completion rates just plummet so in model presented community college is making investment
    • Bettencourt – could see why they would do it, will make a better student
  • Johnson – have to pay portion of funding with community college in Austin
  • Ellis – to go statewide will need to look at this together puling together partnerships

 

Dottie Smith, Best in Class Coalition

  • Provided overview of biggest talent changes and how to address and fund
  • Retention was listed as an issue, just 33% of new teachers hired came from IHEs, seeing increase proportion of teachers from alternative certification
  • Second concern is teachers who are student taught or attended IHE’s feel well prepared to teach
  • Brister – who supplies most effective way to train teachers but we don’t have a way to measure
    • Correct
    • Brister – if you could wave a wand to find most effective teachers, what would you look at?
    • Ensure looking at multiple measures, include observation measures like current evaluation system, would include student achievement and student surveys so combination has been shown to lead to fairly accurate way to measure
  • Brister – does anyone gather that? Does TEA?
    • Not sure, some districts have multiple measure evaluation model
  • Strategic staffing is recommended of way to address equitable access to educators
  • Reviewed ACE statistics – implementing ACE components cost about $1300 per student and total excludes cost of identifying a district’s most effective educators
  • Grow your own programs – answering need for more diverse pipelines
  • Recommendations
    • Expand SB 1882 to include strategic staffing models
    • Maintain and if possible grow TEA grants for grow your own grants
  • Brister – is expanding SB 1882 more money?
    • Huberty – it’s a bill that allows for IR campuses to put a plan in place that allows them to create district partnerships
    • Bettencourt – ways to incentive pathways and to do as best practices
  • Believes a strong multi-measure evaluation system can give nuance detail and target development for teacher
  • Williams – hard to see data measured in ACE schools across board without change in systemic behavior and provide resources
  • Johnson – are you suggesting that districts could keep governance , suggesting that districts could still do an internal program
  • Johnson – Confirms witness is saying governance would include local school board but require an external implementing partner
  • Bettencourt – speaks about recent HISD discussion and notes that not all the good options were never presented in HISD
  • Taylor – a very important part of ACE is identifying best teachers, best way to do that?
    • Help districts develop multiple measure evaluation measure and in the interim could use a vendor to help with data analysis as well as walk throughs, and qualitative checks

Permanent School Fund
Rachel Quenemoen, Retired from University of Minnesota, National Center for Educational Outcomes (Special Education) – Students with disabilities: What should we expect?

  • The education system has grappled with defining two groups: those with the most serious cognitive disabilities (who may benefit from alternative standards), and students that are persistently low-performing and in “the gap” between regular assessments/standards and alternative assessments/standards (includes students with and without disabilities)
  • When given decreased standards for students with disabilities, they out-performed expectations
  • Still trying to figure out how to set appropriate academic standards so that students with disabilities will have modified, but challenging expectations
  • Changes to test construction were experimented, but it appears to be “reading level, test-taking strategies, and possible lack of instruction” that are the actual ‘barriers’ to reading
  • Many educators do not have the knowledge and skill needed to successfully instruct low performing students with disabilities
  • We have learned how to define the 1st group (students with the most serious cognitive disabilities) who can benefit from alternative but appropriate academic standards
  • We need to ensure that the material is actually taught to low-performing students
  • We also need to ensure that educators have the knowledge and skills needed to successfully instruct low-performing students with disabilities
  • We don’t know who will or will not learn the material until we ensure that it is being taught in and effective manner
  • If we don’t expect students to learn and do not offer them material to do so, they will not learn
  • If we expect them to learn, some still will not
  • Low performing students with disabilities need teachers that are equipped effectively for instruction
  • Taylor – Do we have a percentage of students in the “gap” that are not reaching the current academic standards?
    • Audio cut out. *Came back*
    • Generally, we see that 2% of students especially lagging, but these are the students that we can identify and adjust their standards
    • The real issue lies with those students in the “gap”, and there have been little or no cases where these students are taught the material in a way they would actually learn
  • Taylor – Have we found any cases of students that are being taught effectively, what percentage of those students underperform?
    • We don’t know specific percentages of that population
  • Taylor- The point of my question is that how can we define success with that population if we don’t know how many, even with proper instruction, still don’t attain the levels we need?
    • What we do know is that kids in this group move around frequently, but as to actual percentages of underperforming, we do not know
  • Brister – Are there any examples of other states in your research that have successfully identified and educated low-performing students?
    • Movingyournumbers.org shows examples of districts with long term commitment
    • Every state will say they cannot solve the problem until every student can be taught
    • Eventually these students will be in the workforce, equipped with whatever knowledge they attained from public schools
    • Empowering teachers to work well with them and supporting families is important
    • Kids with disabilities have to work harder than other students, with support of families and teachers
    • It’s on the district level that you can find successful examples of educating students with disabilities
  • Bettencourt – Did you say you don’t know practices were in the classroom or that there wouldn’t be a way of documenting best practices?
  • We do have some sense of what it would take, which is a combination of remediation and acceleration
    • The states measured opportunity to learn, which is just based on what material was presented in what way

 

David Bradley, Board Member, Texas State Board of Education – Texas Permanent School Fund Distributions to the Available School Fund

David Bradley and Holland Timmons, State Board of Education

  • Gave history of public school funding beginning with the statehood of Texas
  • Texas’ natural resource wealth is what contributed to the growth of the public-school fund
  • Bond guarantee program added charter schools a couple years back and that has saved the state millions
  • Intergenerational equity is an important concept because it provides for future generations
  • Intergenerational equity is maintained by attempting to pay out a constant distribution per student after adjusting for inflation
  • The spending rate is determined by looking at total expected return, minus rate of inflation, minus student population growth, minus administrative expenses, plus GLO contributions
  • There is a GLO PSF, and an SBOE PSF, which are both Permanent School Fund assets but different sectors
  • We pay out distributions based on our assets and the GLO contributions (0-6%)
  • We will be adopting a new distribution rate before next session, if board fails to decide then the decision goes to the legislature
  • We are currently meeting the needs of a growing population, and keeping up with inflation
  • Brister – If we empty the entire permanent school fund you would only have enough for one year?
    • That might be correct.
  • Brister- You aren’t supposed to break into your endowment like a college would, correct?
    • We had a budget crisis, where some were prepared to spend an additional $2 billion to fix this temporary problem
    • This would have set PSF back 10-20 years
  • Bettencourt – How far back was it that you were able to fully fund investment classes?
    • The first diversified asset allocation was in 2008
    • The challenge has been real estate and private equity. Asset allocations have been made by the board.
  • PSF is the largest educational trust in the U.S. now?
    • I think we passed up Harvard, so yes.
  • Can you tell me some of the restrictions that PSF has on investments?
    • We do not invest in junk bonds. We only invest in BBB or higher. The typical restrictions that are put on by the legislature.
    • This is a business, and some have told us not to invest in certain groups, like tobacco and Disney, but we are trying to make money in order to set ourselves up for the future

 

  • Brister – Why do we have a split between GLO and SBOE, is it purely historical?
    • That happened in 2002 and cannot speak to the author and intent?
  • Johnson- Can you share some about the performance of the fund, income for example? Where does some of the dispersal of liquidity go?
    • Payments made by our liquidity are given by the comptroller in the end of the 2nd year of the biennium, given to the Available School Fund (formerly known as the Textbook Fund)
    • Sometimes we buy and sell over $1 billion in securities over one quarter
    • As to performance, the fund return was 16.03% which outperformed the benchmark by over 107 basis points
    • Over the past five years, the fund return has been 8.53% which outperformed the benchmark by about 42 basis points
  • Johnson- You’ve been performing well, but if we were to add to the fund maybe 10 or $11 billion, but you could increase earnings?
    • The total pot in the financial crisis was about $17 billion, and we have added another $17 billion since then
    • Good performance obviously adds to this, but we don’t want to put all our eggs in one basket