Author Archives: Monty Exter

Did lawmakers make the grade on updating the accountability system?

skd282694sdcDid lawmakers make the grade on updating the accountability system? You be the judge.

House Bill (HB) 22 by Representative Dan Huberty (R-Kingwood) is likely the most broadly impactful piece of education legislation passed this session. It represents a compromise that was crafted by a conference committee of 10 legislators after the House and Senate passed differing versions of the accountability bill. Over the next two years, HB 22 will affect every district, campus, and charter school. Below are questions and answers about how ATPE perceives this latest iteration of the accountability system will work.

Does HB 22 maintain an A-F accountability system?

Yes, despite parents, educators, administrators, board members, students, and a host of other advocacy groups expressing their concerns about moving forward with an A-F accountability system, the Senate, largely at the direction of the Lt Governor, made it clear that no bill eliminating A-F would be allowed to pass.

When does the new bill go into effect?

Having been passed by more than two thirds of each chamber, HB 22 will go into effect as soon as the governor signs it. However, not all portions of the bill are immediately applicable. Most of HB 22’s provisions will first begin to be implemented during the 2017-18 school year, including assignment of district-level A-F ratings.  Campus-level A-F ratings will not be assigned until the 2018-19 school year. However, the commissioner of education will produce a report that will include non-official campus level ratings using 2017-18 data to be turned into the legislature by Jan. 1, 2019.

Is the HB 22 accountability system based on STAAR test scores?

At least in part, yes. To what degree depends largely on how the commissioner writes the administrative rules to implement the new law. HB 22 certainly allows the commissioner to develop a system that is highly dependent on STAAR test data, particularly at the elementary and middle school levels.

What will the new domains be under the state accountability system?

HB 22 calls for a system with three state-level domains, down from five.  The domains include the following:

Student Achievement This domain includes students’ absolute performance on the STAAR test. For high schools, it also includes the following other factors: TSI, AP, and IB tests; completion of dual credit courses; military enlistment; earning an industry certification; being accepted into certain post-secondary industry certification programs; successful completion of a college prep course under TEC 28.014; “successfully [meeting] standards on a composite of indicators that through research indicates the student ’s preparation to enroll and succeed, without remediation, in an entry-level general education course for a baccalaureate degree or associate degree;” graduation rates; successful completion of an OnRamps™ dual enrollment course; and award of an associate’s degree.
School Progress This domain includes student growth as measured by the percentage of students who met the standard for improvement on the STAAR test and an evaluation of performance as compared to similar districts or campuses. It is unclear whether the “performance” being compared is exclusively STAAR performance or if it will be broader.
Closing the Gaps This domain measures the differences for various categories of sub-populations such as racial, socioeconomic, special education, low mobility, and high mobility students. The bill does not specify which differentiated data is too be used for this purpose. Will it be only STAAR data, or will other data be used as well? The statute is also silent on how the sub-populations will be compared. For example, will gaps be compared to similar districts, or will they be compared within individual districts over time to determine if the gaps are closing, widening, or staying about the same?

Note: there is nothing in the statute as changed by HB 22 that would preclude the commissioner from creating a state-level accountability system that evaluates elementary and middle school campuses entirely on different manipulations of STAAR data.

What is a local accountability system?

Under HB 22, a district may create locally developed accountability domains and may use those domains in addition to the domains required by TEA to award district and campus accountability ratings, including overall ratings. Local domains must be assigned an A-F rating, must be valid and reliable, and must be capable of being audited by a third party. The commissioner of education will write administrative rules on the use of local accountability plans, and TEA will have authority to review and approve those plans.

Districts choosing to use a local accountability system are responsible for producing district and campus report cards locally.

How will the summative or overall grade be calculated under the new accountability system?

Each of the three state-level domains will receive a letter grade. At least 30 percent of the summative grade must be based on domain three (Closing the Gaps). The better of the two grades for domain one (Student Achievement) and domain two (School Performance, a/k/a student growth) will make up the remaining calculation for the summative grade, up to 70%. There is an exception, however, if a district or campus receives an F grade on either domain one or domain two; in that case, the highest grade it can receive for that part of the calculation is a B.

In case it’s not immediately clear, much will depend on the commissioner’s rules to implement HB 22. If the commissioner goes with a breakdown of 30% and 70% as contemplated above, the effect will be that a higher grade in domain three can never bring a district’s or campus’ summative grade up a letter; by contrast, a lower grade in domain three would always bring a district’s or campus’ summative grade down a letter. #AintMathFun

If that’s not already complex enough, here is where it gets really tricky. If one or more districts choose to develop one or more local domains to add to their accountability system, the commissioner can, but does not have to, write rules that would allow for up to half of the overall performance rating for that district or campus to be based on the ratings of the local domain(s). That is unless the campus or district would receive a D or an F on the overall performance rating using only the state level domains. The statute is not really clear what overall performance rating the district or campus would receive under that scenario.

How do A-F ratings relate to acceptable and unacceptable performance?

There are several laws in the Texas Education Code that continue to reference either “acceptable” or “unacceptable” performance as triggers for various actions to occur. As opposed to changing all of those references throughout state law, legislators simply benchmarked the new A-F labels to the existing terms.

When A-F was first rolled out, the cut point between acceptable and unacceptable was between grades C and D. In the current accountability system as it exists prior to HB 22, improvement required (IR) constitutes unacceptable performance. IR correlates to an F, not a D, under the A-F system. Because of this, setting unacceptable performance at a D under the new system would represent an expansion of what the state considers unacceptable performance. This would result in spreading state resources for turning around struggling schools among a larger group of campuses and districts, which would take the focus off those with the greatest need for intervention. HB 22 has resolved this issue by resetting the unacceptable cut point at the F rating.

The new A-F labels will coordinate with previous labels as follows:

Acceptable level of performance

A

Exemplary Met Standard
Acceptable level of performance

B

Recognized Met Standard
Acceptable level of performance

C

Acceptable Met Standard
Acceptable level of performance

D

Needs Improvement* Met Standard
Unacceptable level of performance

F

Unacceptable Improvement Required

* This is a new label created by HB 22 that does not correspond to an older system.

What is the difference between a D and F grade under HB 22?

Before HB 22, there was little to no differentiation between getting a D or an F in terms of consequences. Under HB 22, getting a D will no longer trigger the immediate accountability sanctions associated with an unacceptable level of performance. However, there are some requirements attached to this next to lowest ranking.

Year 1 of a D rating in either a single domain or overall The Commissioner shall instruct the district’s board of trustees to develop a local district or campus improvement plan.
Years 2 and beyond with a D rating overall The Commissioner shall implement interventions and sanctions that apply to an unacceptable campus until the district or campus is ranked C or higher on the overall rating.
Years 2 and beyond with better than a D rating overall but a D rating in a single domain The Commissioner shall instruct the district’s board of trustees to develop a local district or campus improvement plan.


How will stakeholders be involved under the new law?

Through multiple, sometimes broad grants of rulemaking authority, the Commissioner has been given a massive amount of latitude in structuring how the new accountability system under HB 22 will actually work. Thanks to amendment language requested by ATPE, this authority will be balanced at least to some degree by a statutory requirement to involve a stakeholder group in those decisions. HB 22 requires that the group must include  school board members, administrators and teachers employed by school districts, parents of students enrolled in school districts, and other interested stakeholders.

 

Additional changes made by HB 22:

Public education grants and mandatory access to transfers

A student at a campus that receives an unacceptable rating in both the student achievement and school progress domains must be allowed to transfer to another campus in the district and will be eligible for public education grant (PEG) funding.

Extra- and co-curricular indicator study

The commissioner shall study the feasibility of including an indicator that accounts for extracurricular and co-curricular student activity. By the year 2022, the commissioner shall either incorporate the indicator into the accountability system or present a feasibility report to the legislature.

Adopting indicators and setting cut scores

The commissioner may adopt indicators for the accountability system or standards (cut scores) at any point during the school year prior to evaluation of the district or campus. In setting the cut score for all indicators yearly, the commissioner shall consult with educators, parents, and business and industry representatives. The standards are to be modified in a way that promotes continuous improvement in student achievement and closing education gaps.

Reporting

Each school year, the commissioner shall provide each school district a document in a simple, accessible format that explains the accountability performance measures, methods, and procedures.

Thanks to language requested by ATPE, the commissioner, in consultation with stakeholders, must also develop language for each domain that clearly describes the district and campus performance on the indicators used to determine those assigned performance ratings.

A-F reform: Will they or won’t they act?

House Bill (HB) 22 by Rep. Dan Huberty (R-Kingwood) has been filed to try to modify the state’s recently adopted “A through F” accountability system, which has been widely panned by parents, administrators, and teachers. It passed the House with broad support but underwent some fairly significant changes in the Senate. In its current form, the bill is eligible to cross the finish line in the legislature and head to the Governor’s desk this evening at 7:20 pm. However, there is some question as to whether or not Huberty, who chairs the House Public Education Committee, will accept the Senate’s version of his bill.

ThinkstockPhotos-478554066_F gradeAs the bill progressed this session, both chambers decreased the number of domains in the accountability system and increased what criteria can be considered within each domain. However, the House version of HB 22 was structured in a way to ensure more reliance on non-test-based measures than in the Senate’s version. Likewise, both versions of the bill created differentiation between a D and an F rating, but the Senate version places punitive measures on a D rating that the House version did not include; ostensibly, the House wanted the state, or the Texas Education Agency (TEA), to focus all of its limited resources on the most struggling schools. The Senate’s version of the bill would keep in place a largely unpopular requirement that schools and districts receive a summative or overall accountability grade, while the House version of HB 22 stopped at grading only the individual domains.

Chairman Huberty must decide if he will recommend that the House accept the Senate’s language through a motion to concur in Senate amendments to HB 22, or ask the House to reject the Senate’s version of his bill and appoint a conference committee to work on compromise language before time runs out. Under House rules, that decision must be made by midnight tonight. If no action is taken on the Senate amendments by midnight tonight, then the bill dies and the legislature loses its ability to make statutory changes to the current accountability system for two more years.

If Chairman Huberty chooses to send HB 22 to a conference committee to continue negotiating, that move will only buy the bill about 24 more hours of life at this late date in the session. A conference committee could allow Huberty and his House colleagues an opportunity to improve the bill, but a deal would have to be struck with the Senate conferees by midnight Saturday night; otherwise, further inaction would kill the bill. Should Chairman Huberty decide that HB 22 in its current form as passed by the Senate is better than no change at all, he can accept the Senate amendments and finally pass the bill tonight. Then, it would be up to Governor Abbott to either veto or sign the bill, or let it pass into law without a signature.

As it currently stands, HB 22 contains two amendments specifically added at ATPE’s request. One adds a teacher quality measure into the accountability system that would be based on criteria other than value-added measures of student performance via test scores. The other ATPE-requested change would require TEA to add additional explanations beyond merely a letter grade to describe how each school or district has performed in each domain. HB 22 also contains language about inclusion of a stakeholder group that ATPE requested, but the Senate’s version of the bill limits the role of that stakeholder group considerably compared to the preferred House language.

Stay tuned to Teach the Vote this weekend for updates and follow @TeachtheVote on Twitter for the latest developments.

Update: The House voted Friday afternoon to appoint a conference committee for HB 22.

Update on TRS-Care legislation

Drugs and MoneyThe Texas Senate is expected to vote soon on House Bill (HB) 3976 by Rep. Trent Ashby (R-Lufkin), a bill to reform the state’s healthcare program for retired educators. The Texas House approved the bill unanimously earlier this month. Here’s a look at the background and history of the legislation, as well as its current status.

Part I: How did we get here?

For at least the past four years, the TRS retiree health insurance program known as TRS-Care, has been headed toward a financial disaster. During the 83rd legislative session in 2013, the legislature began supplementing formula funding for TRS-Care to cover a projected shortfall. In the 84th legislative session in 2015, lawmakers increased the amount of supplemental funds to $768 million again to cover the TRS-Care shortfall. Covering the projected shortfall this session would take more than $1 billion above and beyond what the current funding formulas call for. That amount, already considered unsustainable, is only projected to rise in future years.

The issues driving TRS-Care toward disaster are runaway health care inflation and a statutory requirement to offer a free health insurance option.

TRS-Care presently has three funding streams: premiums associated with TRS-Care 2 and TRS-Care 3, since TRS-Care 1 is free; formula funding generated from the state, school districts, and active TRS members; and Medicare reimbursements from those over 65 who are on Medicare. The formula funded part of the equation is based on active TRS member payroll. Specifically, the state pays 1 percent of payroll into the fund while school districts pay .55 percent and active members pay .25 percent. Active TRS members’ total payroll generally increases over time at about 2 percent each year. This in turn means the formula funding for TRS-Care similarly increases over time at about 2 percent.

ThinkstockPhotos-177774022-docUnfortunately, healthcare costs have increased at over 7 percent annually for many years. This has led to a situation where the costs for TRS to pay healthcare claims has dramatically exceeded the funding available to pay for those claims, and the gap between funding and costs is only growing.

Without the legislature writing a check to cover the funding gap described above, TRS-Care would go into what is known as a death spiral. TRS would be forced to dramatically raise the premiums on TRS-Care 2 and 3, which are the current paid options offered to retirees, in order to cover the cost of all TRS-Care claims. The dramatic increase in the cost of these optional plans would drive more retirees to choose TRS-Care 1, the free option. As more retirees migrated to TRS-Care 1, the funding stream from premiums would dry up, further increasing the gap between revenueand the cost of paying claims, and the whole system would collapse.

How has the state responded?  The short answer is – not well!

State lawmakers currently have, and have previously had, only three options for addressing the TRS-Care problem. One, they can work to legitimately bring down the costs of retiree health care. Two, they can pay the additionally costs. Three, they can shift the costs to someone other than the state, i.e. retirees, school districts, and active teachers.

Legitimately bringing down healthcare costs, while likely possible, is challenging at the state level and at best a long-term process. Much of what impacts healthcare costs involves federal law over which state legislators have little or no control. Effectively that leaves as the only viable options putting in more money, either from the state or from somewhere else.

Knowing that this problem was approaching, legislators could have taken action six or eight years ago and aggressively pushed TRS-Care participants toward healthier and therefore cheaper outcomes, eliminated the free option under TRS, and at the same time increased the TRS-care formulas. Had they made these changes back then, before TRS-Care was facing a giant funding deficit, the pain to the state and to retirees would have been very minimal. However, back when these issues weren’t yet urgent, it was easier to keep ongoing state costs at a minimum and keep the potent voting block of retired teachers happy by ignoring future realities. Even when deficits between TRS funding and the cost of paying claims began to appear over the last two sessions, while times were good and state coffers were flush, it was easier to simply write one-time checks to prop up the system and ignore the oncoming train wreck.

Now that state revenues are lean and the TRS-Care deficit has grown into a billion dollar hole, it’s too late to reap the slow savings associated with bringing down costs. Lawmakers are unwilling to take on billion dollar ongoing funding increases, and the pain that retirees will experience from the state’s shifting the cost of covering the funding gap to them will be substantial, and in some cases, possibly lethal.

Part II: Where are we now?

The Senate State Affairs committee has legislative oversight for TRS-related issues in the upper chamber, and it is chaired by Sen. Joan Huffman (R-Houston). Having no intention of asking her colleagues to fund the TRS-Care deficit for a third session, Sen. Huffman starting crafting a plan during last year’s interim that was designed primarily to shift the cost of paying for TRS-Care to retirees. Stakeholders, including active and retired teachers, were given an opportunity to provide their input at one perfunctory hearing. However, by the time of that hearing, the majority of the plan that was to become Senate Bill (SB) 788 was already in place.

In early February 2017, SB 788 was filed. As originally filed the bill eliminated TRS-Care plans 1-3 and replaced them with two plans: one plan for retirees under the age of 65 and one plan for retirees age 65 and older.

  • The under 65 plan was a high deductible plan with a first deductible of $4,000. After the participant hit $4,000 in out-of-pocket costs, the plan would have transitioned to offering 80/20 coinsurance coverage up to a maximum out-of-pocket cost of $7,150. After hitting the max out-of-pocket cost in a given plan year, the plan would have covered additional in-network costs at 100 percent. Like all high deductible plans, there are no medical or drug co-payments; you simply pay 100 percent (or 20 percent after the first $4,000 deductible has been met) of the full contracted price for the drug or medical service. As filed, the SB 788 plan was projected to require premiums of $430 a month. Thus, the total annual cost for participants covered by the plan would have been between $5,160 and $12,310. (For perspective, the average TRS annuity is approximately $24,000 a year.)
  • The 65 and over plan in SB 788 would have replaced all current TRS plans with a Medicare Advantage plan. Under a Medicare Advantage plan, Medicare is the primary insurance and the advantage plan is supplemental insurance designed to cover what Medicare does not. The deducible for this plan was projected to be $500 with monthly premiums of $140.

ThinkstockPhotos-162674067-pillsEven with these changes delineated under SB 788, TRS projected that TRS-Care would still have a funding deficit of approximately $300 million during the upcoming biennium and increasing deficits in subsequent years. As filed, the Senate plan did not increase the TRS-Care funding formulas. Instead, the Senate envisioned writing another one-time supplemental check to cover the balance of this biennium’s deficit, leaving a continuing and growing problem for future legislators to address.

Thanks to the tireless efforts of active and retired teacher advocates and receptive House members, the plans for TRS-Care while far from perfect have continued to improve over the course of this legislative session. SB 788 has been left pending, as the House bill, HB 3976, continues to proceed.

As it stands today, the TRS-Care bill moving forward still eliminates the current structure and replaces it with two age-dependent options.

  • The under 65 plan is still a high deductible plan with an out-of-pocket first deductible of $3,000 and maximum out-of-pocket cost of $7,150. The monthly premium will start at $200 a month for the first year and will increase for the following three years to approximately $370 a month. The plan also includes language that lets a TRS retiree opt out of the pre-65 plan and opt back into TRS for the 65-and-over plan once the retiree becomes Medicare eligible. Additionally, members under 65 who have retired due to a disability before January 1, 2017, will not have to pay premiums for the first four years. The plan will also cover a list of generic maintenance drugs, such as blood pressure and cholesterol medications, free of charge.
  • The 65-and-over plan is essentially the same as filed, but TRS at the request of multiple legislators is committed to expanding access to medical providers willing to take the TRS-Care Medicare Advantage plan. Restricted access to doctors has been one of the primary concerns about the Medicare Advantage plan.

In addition to better plan design, HB 3976 as it currently stands increases the state’s share of the funding formulas from 1 percent to 1.25 percent and increases the district’s share from .55 percent to .75 percent. The active employee share is not being increased at this time. These increases in formula funding give some assurance of a continued increase in regular appropriated spending in future years. This is a very important step for the continued existence of the retired educators’ health insurance program.

For those educators who have retired, especially those under age 65, or for those considering retirement in the near future, the changes to TRS-Care contemplated in SB 788 and HB 3976 are a lot to consider. ATPE members may contact our Governmental Relations team if you have specific questions about the bill. We also highly encourage you to contact TRS directly for questions about your retirement or your specific coverage questions about TRS-Care. You can contact Senate author Sen. Huffman or House author Rep. Ashby if you want to express your support, opposition, or any commentary on the legislation. Please remember to be courteous and respectful if you choose to contact one or both of the legislators, and remember that while this bill is not by any stretch perfect, TRS-Care health insurance will cease to exist altogether if no bill passes at all.

Senate committee approves budget proposal

ThinkstockPhotos-185034697_gavelcashThe committee substitute to Senate Bill (SB) 1, the Senate’s budget bill, was voted favorably out of the Senate Finance Committee on a vote of 15 to 0 this morning. The SB 1 committee substitute, which appropriates $106.3 billion in general revenue, reflects all of the recommended modifications to individual articles of the budget made by the work groups and adopted by the full Finance Committee.

In her comments, committee chairwoman Sen. Jane Nelson (R-Flower Mound) stated that SB 1 fully funds the Foundation School Program (FSP), including $2.6 billion for enrollment growth. Nelson also touted $25 million in spending for broadband expansion through the e-Rate program; $65 million to a new public / private partnership for pre-K (the committee substitute cuts $180 million in pre-K grants from SB 1 as it was originally filed); and $316 million to fund SB 788 by Sen. Joan Huffman (R-Houston), which would reform TRS-Care.

Senator Royce West (D-Dallas) probed staff from the Legislative Budget Board (LBB) on how to reconcile claims that SB1 fully funds the FSP while spending nearly $1.4 billion less in general revenue on the program. In response, LBB staff confirmed that SB 1 does fund the amount that current law calls for in FSP entitlements, but the funding level is $1.4 billion lower this session because increases in local property values mean that less funding is required through state general revenue. Due to this continued supplanting of state funding with local property taxes, the proportion of the state’s share of FSP funding is projected to decline to 38% or less by the end of the biennium.

SB 1 as substituted is expected to be brought up for a vote on the floor of the full Senate on Tuesday, March 28.

House committee hears from ATPE, others on education funding challenges

Dollar fanThe House Appropriations committee began meetings this week for its subcommittees assigned to work on various parts of the Texas state budget. This includes the Article III Subcommittee, which covers education funding and began taking testimony on Monday, Feb. 20. The subcommittee’s first day agenda involved looking at funding for the Texas Education Agency (TEA), including the Foundation School Program; the Teacher Retirement System (TRS), including both pension and health insurance funds; the state schools for the visually impaired and the deaf, the Windham School District; and community and junior colleges.

After the Legislative Budget Board (LBB) laid out the budget documents on TEA and the Foundation School Program, the committee heard from Texas Commissioner of Education Mike Morath. Commissioner Morath began by thanking the committee and restating his dedication to the goal of improving student outcomes for all students. The commissioner then laid out his agency’s priorities beginning with ensuring and improving teacher quality as the “most important in-school factor” in a student’s education outcomes. Next, Morath addressed the agency’s second key priority to promote a strong foundation in reading and math, and spoke about the affect of achieving this goal on closing the achievement grant. To facilitate this goal, the commissioner talked about continuing to push for expanding high quality pre-K. He also promoted TEA’s goal to scale the math innovation zones program statewide. The agency’s third priority is to connect K-12 education to higher education and career opportunities. The next priority is to improve struggling schools, Morath explained. He reported that TEA is working to do this through systemic system-wide improvements. In addition to budget items tied to the agency’s larger priorities, Morath also addressed specific targeted budget requests like funding the E-rate match to complete the build-out of statewide broadband access.

Early Childhood EducationThe Commissioner was well received by the subcommittee. The majority of questions to the commissioner from committee members tended to focus on supporting pre-K. In responding to an offshoot of this questioning, the commissioner indicated that the State Board for Educator Certification will likely institute a new certificate for grades EC-3 that would be more focused on early childhood education.

Later in the hearing, the committee heard from TRS Executive Director Brian Guthrie. Guthrie gave brief remarks about the overall performance of the TRS trust fund before turning to the more pressing issue of the billion dollar shortfall in the TRS-Care fund. He impressed upon the committee that TRS has done everything it can do internally to control costs without legislative action. On TRS-Care the plan laid out to the House budget committee would include a “shared pain” approach where the state would cover half of the cost of the shortfall, retirees would cover 25 percent of the costs, and districts and active teachers would each cover 12.5 percent of the cost. While this plan is more generous than what has already been laid out in the Senate, it still puts additional pressure on active teachers, many of whom are drowning in the cost of their own health insurance premiums. Additionally, the strategy laid out did not contemplate changing the state paid formula for TRS-Care, which is currently set at 1 percent of payroll for all school districts statewide. The TRS board of directors is also meeting this week.

After hearing from LBB and invited witnesses, the Article III subcommittee took public testimony, including testimony from ATPE. Our testimony focused on the need to address active teacher health care costs through additional state funding, not just a denigration of benefits; the benefits of closing the education gap early in a student’s career thorough pre-K; and finally the need to address equity through more appropriately funding students based on their needs, individually and at the campus level.

TRS healthcare bill offers fewer options, no savings

Drugs and MoneyLast fall, ATPE reported on an interim legislative study of healthcare programs administered through the Teacher Retirement System (TRS). Now that the 85th legislative session is in full swing, we’ve had a chance to see actual legislation pursuing some of the dramatic proposals outlined in that interim report. The primary vehicle for these changes would be Senate Bill (SB) 789  by Sen. Joan Huffman (R-Houston), which seeks to reorganize TRS-ActiveCare, the current health insurance program for many of our state’s actively employed educators.

Under current law, all school districts that did not previously opt out of TRS-ActiveCare offer their employees access to two health insurance options through ActiveCare: one high-deductible plan and one traditional plan featuring co-insurance and co-payments. The state contributes $75 per employee toward the monthly premiums associated with either plan and requires school districts to cover an additional $150 per employee towards premiums; many districts cover more than the minimum $150 contribution that is required, however.

If passed, SB 789 would limit districts that may participate in TRS-ActiveCare to those with 1,000 or fewer employees or fewer. The bill would also eliminate the traditional co-payment insurance plan option, leaving only the high-deductible option for employees who remain covered through ActiveCare. The bill also would give those districts with fewer than 1,000 employees another one-time opportunity to voluntarily opt out of TRS-ActiveCare.

SB 789 does not increase the amount of money the state will be spending toward employee health care premiums, nor does it increase the requirement for the amount that districts must spend toward those premiums. This is significant because compared to the private sector, our state’s employer contribution (the combination of state and district payments) toward public education employees’ health care premium cost is dramatically underfunded. When the TRS healthcare program was started years ago, the ISD/state contribution was in line with average private sector employer contributions. However, as private business has worked to keep pace with healthcare inflation, the state has never increased its contribution on behalf of school employees.

Falling US MoneyIt is also worth noting that SB 789 does not save the state any money. TRS-ActiveCare is considered a pass-through program. That means the state puts in a fixed amount of money and any increases in premiums get passed directly down to educators for them to cover. Restructuring ActiveCare as proposed in Sen. Huffman’s bill will not change this dynamic. The state pays the same amount and any changes in overall premium costs will only impact educators.

Thus, SB 786 takes away choices without saving educators money. The cost for the new high-deductible plan is estimated to be more expensive than the cost of the high-deductible plan offered under the current system. While premiums for this new high-deductible plan may be slightly less than the cost for the traditional co-pay plan under the current system, the premium combined with out-of-pocket costs for educators could very likely be more. Additionally, educators who have currently selected the traditional co-pay plan have voluntarily chosen to pay a higher premium at no additional cost to the state and no required additional cost to the district. Taking away this option without any resulting savings to either the school district or the state makes little sense.

For the 82 school districts that will be required to exit ActiveCare if this bill passes, their administrative costs will increase. Those districts will now have to hire additional personnel to administer an employee healthcare plan at the district level. That additional cost will in turn reduce the amount of money these districts will have to spend in the classroom on other needs. The same will be true of any districts that voluntarily opt out of ActiveCare because they prefer to offer their employees the option of more than one health insurance plan.

SB 789 decreases benefit options for educators while increasing district expenses, and it does so without increasing state support to educators, lowering the healthcare cost for educators, or decreasing the cost to state taxpayers. Therefore, we can find no reason for ATPE to support this bill.

Dan Patrick’s voucher bill

Near the beginning of session before senators starting filing their bills, the lieutenant governor routinely reserves a block of the first fifteen to twenty bill numbers for high priorities. This year, Lt. Gov. Dan Patrick reserved numbers one through thirty for his preferred bills. While Lt. Gov. Patrick cannot file bills himself, he works with various senators to carry what are unquestionably his priorities and marks them as such with one of his low bill numbers.

Vouchers have always been a top political priority for Lt. Gov. Patrick. This session, Senate Bill 1 (SB 1) is the state budget bill; SB 2 is the lieutenant governor’s tax relief bill; and third on the list, SB 3, is the lieutenant governor’s voucher bill.

SB 3 contains both an education savings account (ESA) and a tax credit scholarship. While each program funnels public tax dollars to private, non-transparent, and largely unaccountable education settings, making both programs clearly voucher programs, the mechanics of how they shift those dollars are separate and distinct. Here’s a more detailed look at each program contained in SB 3:

Dan Patrick’s ESA program:

The ESA program as proposed in SB 3 would apply to any child who either has been in the public school system during the preceding school year or has never been in the public school system but was born after September 1, 2012. It would give those children access to a bank account from which their parent or guardian can at their discretion pay for “educational expenditures” using a debit card. The amount that a child would receive under the program is dependent on two factors, household income and student disability. Here is an approximate breakdown based on a family of five (two parents, three kids):

  • A family with a household income over $105,118 would receive $5,510 for each eligible child.
  • A family with a household income under $105,118 would receive $6,888 for each eligible child.
  • A child who is eligible to participate in an ISD special education program or has a Section 504 designation would receive $8,266 regardless of household income.

The numbers above are based on a percentage of the average state and local public education funding a child receives in Texas, which is approximately $9,184*. That amount does not include federal funding; nor does it include additional weighted funding a student in the free or reduced price lunch program or a student identified as needing special education services may receive. For reference, the median household income in Texas is $55,653.

In every circumstance, a student receives less funding under an ESA program than the child would receive as a student of a public school.

As stated above in the ESA plan, parents may legally spend entitlement dollars on “educational expenditures.” These would include:

  • Tuition and fees at:
    • an accredited private school (ex. – IQA, Winston School);
    • a postsecondary educational institution; or
    • an online educational course or program (ex. – K-12 Inc.);
  • Textbooks or other instructional materials
    (Under an ESA neither the content nor quality of textbooks or instructional materials is publically vetted as they are for public schools. Here are examples of some texts that could be published using tax dollars under an ESA program for use in a non-public school: Sharia Law, Wicca, Young Earth Science.);
  • Curriculum
    (Much like textbooks, neither the quality nor content of curriculum is vetted under an ESA program. Here is an example of a commercially available curriculum program that could be paid for with public money under an ESA, although it would never be found in a public school - ATI (what is ATI);
  • Fees for classes or other educational services provided by a public school, if the classes or services do not qualify the child to be included in the school ’s average daily attendance;
  • Fees for services provided by a private tutor or teaching service (so vague it could cover almost anything);
  • Fees for educational therapies for a child with a disability;
  • Computer hardware and software and other technological devices, not to exceed in any year 10 percent of the total amount paid to the program participant’s account that year (ex. $551 – $826, multiplied by the number of children with a voucher, toward a new flat screen TV);
  • Fees for a nationally norm-referenced achievement test or examination, an assessment instrument adopted by the agency under Section 39.023, an advanced placement test or similar examination, or any examination related to college or university admission; and
  • Fees for the management of the participant’s account charged by a financial institution.

Swiping Credit CardSome parents will, of course, seek to cash in their student’s entitlement or directly spend the taxpayers’ money on unsanctioned purchases, such as rent, food, or even less scrupulous items. The primary means of deterring financial mismanagement on behalf the parent or guardian, assuming they get caught, is criminal prosecution. Having an incarcerated parent is not typically a precursor to improved academic performance.

The competing plan in SB 3 is a Tax Credit Scholarship.

Dan Patrick’s Tax Credit Scholarship program:

This part of SB 3 would allow an insurance company to redirect tax dollars out of state general revenue and into the coffers of a private vendor, which would then use those dollars to selectively grant scholarships for private schools. The bill also creates the bureaucratic framework under which the vendor would be awarded this lucrative administrative contract from the state.

Under SB 3, the Texas Comptroller would select a single 501(c)(3) nonprofit entity (such as a religious organization or private school operator) to serve as the states “Educational Assistance Organization” (EAO). In exchange for a 10% administrative fee retained on all the money it takes in, the EAO first receives dollars from insurance companies and issues those companies a receipt they can give to the comptroller for a dollar-for-dollar deduction on their taxes, up to half of their total tax bill. The EA then disperses those scholarships directly to private schools in accordance with SB 3. So for every $100 million the EAO takes in, it gets to keep $10 million in administrative fees right off the top. Additionally, the EAO can hold onto the money it collects for up to two years meaning that it could also quite easily invest that money (e.g. in a jumbo CD or other investment that carries virtually no risk) and collect yet another $1 -$3 million in profits off the earnings. All in all, this is a pretty good deal for the vendor that lands the contract.

The initial cap on the Tax Credit program in SB 3 is $100 million, but it would rise to approximately $260 million over the first 10 years and more than a billion dollars within 25 years. At that point, the EAO vendor would be able to draw approximately $130 million off the program annually.

Under the tax credit scholarship plan, the EAO vendor can make two different types of payments:

  • a scholarship payment of either 75 percent of average ADA ($6,888 for 2015-16) or 50 percent of average ADA ($4,592 for 2015-16); or
  • an educational expense assistance (EEA) payment of $500 (this amount increases by 5% each year).

An eligible student may be awarded both a scholarship payment and an educational assistance payment. In order to be eligible a student must meet the following eligibility requirements:

Income: The family’s income cannot exceed double the free or reduced lunch guidelines, which is $105,118 for our family of five.

The student must also:

  • be in foster care;
  • be in institutional care; or
  • have a parent on active duty in the military

Additionally, the student must:

  • have attended public school the preceding year;
  • have never attended public school, but be starting school in Texas for the first time (this could be a kindergarten student, first grader, or out of state/country student); or
  • be the sibling of an eligible student. (This would make students who had been attending a private school but who have a sibling who is eligible under the former bullets also eligible.)

Using 2015-16 numbers, a private school could be awarded a scholarship of $4,592 plus $500 in EEA money for a student from a family of five with an income between $78,839 and $105,118. A private school could be awarded a scholarship of $6,888 plus $500 in EEA money for a student from a family of five earning less than $78,839. Again for reference, the median household income in Texas is $55,653. A public school could be awarded $500 in EEA money for a student from a family earning less than $105,118. However there is no requirement, or even encouragement, in SB 3 to award any money to public school students.

Unlike SB 3′s ESA plan, these tax credit scholarships, don’t go to parents, but rather they go directly from the private EAO to the private school(s). This vendor preference and enhanced level of control have made this the voucher of choice for the Catholic Dioceses of Texas and its network of private religious schools, as well as for the Private School Association of Texas.

What if the Legislature were to pass both provisions of this bill?

NO VOUCHERS

If both of Gov. Patrick’s vouchers were to come to fruition under the current language of SB 3, many students would be eligible to double dip from both programs.

In any scenario, these vouchers are a reckless choice for the 85th legislature to pursue.

* There are many ways to calculate average state and local funding which result in variations in the total.

Senate Bill 1: The budget’s starting point

Background with money american hundred dollar billsThe Senate Finance Committee this week began a string of meetings to flesh out plans for a Texas state budget for the next two years. Following an organizational meeting on Monday, the committee began hearing testimony Tuesday on Article III of the budget, which includes public education. Both in her written statement and over and over again in comments during Monday’s and Tuesday’s hearings, committee chairwoman Sen. Jane Nelson (R-Flower Mound) called Senate Bill (SB) 1 a “starting point” from which the senators on the finance committee, and eventually the entire Senate, can work to produce the Senate’s eventual budget proposal.

So where did Chairwoman Nelson and her colleagues start?

On Monday, Nelson began by laying out a budget that spends roughly $3 billion less in general revenue than its predecessor over the last biennium (House Bill 1 of 2015) and $4-6 billion less than would be needed to maintain the level of services funded during the current biennium considering inflation and population growth. She also started lowering expectations by laying out a budget proposal that spends about a billion dollars less than the revenue the state is projected to bring in, according to the comptroller.

While the numbers were not promising, the chairwoman also started the process by announcing two work groups that would be tasked with proposing solutions for two of the state’s most pressing budgetary and policy trouble areas, school finance and the out-of-control cost of health care. The two areas of the budget that these issues impact account for more than 85 percent of the state’s discretionary budget.

On Tuesday, the actual work of going through the budget one agency at a time began. First up; Texas Education Agency (TEA), which includes the $42 billion Foundation School Program (FSP), followed by the Teacher’s Retirement System (TRS), and Texas’s schools for the visually impaired and the deaf.

Several members of the committee spent the majority of Tuesday morning trying to prove, while convincing no one, several points: (1) That the state is not under-funding education; (2) thet neither local property taxes nor recapture dollars have been spent outside of the education budget; and (3) that high property taxes and the disparity between significant increases in local revenue dedicated to education versus much smaller increases in state revenue going to education should be blamed on local tax assessors and school boards, not the legislature. The committee also heard from TEA staff about spending on the various projects administered by the agency outside the Foundation School Program. Many of these standalone programs are funded at levels below the current biennium, and several have been zeroed out completely in the base budget.

Tuesday afternoon, the committee heard from the Commissioner of Education and from executive directors of TRS, the Texas School for the Visually Impaired, and the Texas School for the Deaf. Each presented their exceptional items, budget requests above and beyond the agencies’ base budget needs. Brian Guthrie, the executive director of TRS, had the most challenging reception from the senators, several of whom would like to abandon Texas’s defined benefit pension system and replace it with a defined contribution 401(k)-style system that would both reduce state liability and result in increased profits for wealthy campaign donors. Ultimately, Sen. Joan Huffman (R-Houston) redirected questioning away from the TRS pension trust fund, which is in reasonably good health, and toward the separate TRS-Care health insurance fund, which over the years has become unsustainable in its current form and will run out of money in the upcoming biennium without significant structural changes and increased funding.

After the committee concluded the testimony from the state agency heads, they heard public testimony, including from ATPE. In addition to a general plea for prioritizing education spending, we requested the committee’s consideration in three specific areas. First, we asked that the senate approve TEA’s full funding request of $236 million for the high quality pre-kindergarten grant created last session, for which the current draft of SB 1 provides only $150 million. Second, we asked that the legislature increase state funding for health insurance for active educators. The state has not increased its share of funding for TRS-ActiveCare since that program began in 2001, and funding that was once in line with what private employers provide is now far less than the private market and woefully inadequate. Finally, ATPE echoed much of the rest of the education community in requesting that additional school property tax revenue collected due to increased property values be used to increase the education budget instead of being used to replace state dollars that legislators want to spend elsewhere – in other words, the concepts of “supplement not supplant” and property tax transparency.

If this was the Senate’s starting point, what are the next steps?

Today, Jan. 27, the work group tasked with reimagining the school finance system will meet for the first of what will likely be several times. It is a joint meeting with the Senate Education Committee, chaired by Sen. Larry Taylor (R-Friendswood). They will be taking invited testimony from several stakeholder and school finance experts. At some point in the coming weeks, the Article III (education) subcommittee will also meet and begin to negotiate potential changes from the base budget. The work of these two groups will eventually inform both the budget and a separate school finance bill that would then have to be negotiated with the House, before a final budget and possibly and school finance bill finally makes its way to the governor’s desk.

Stay tuned to Teach the Vote and atpe.org/advocacy for updates as the budget-writing process continues.

Both chambers release versions of proposed Texas budget

Lt. Gov. Dan Patrick confirmed yesterday that Senator Jane Nelson (R – Flower Mound) will continue to serve as the chair of the Senate Finance Committee for the 85th legislative session. Upon her reappointment, Sen. Nelson filed the Senate’s budget bill, Senate Bill 1.  SB 1 spends $103.6 billion in state revenue over the next two years, which is $1.3 billion less than the Comptroller’s 2018 and 2019 revenue projection.

The Senate issued a press release highlighting the fact that the budget includes “$2.65 billion to cover enrollment growth in public schools and $32 million more for high-quality pre-k programs.” This is $86 million less than the additional $118 million that would be needed to extend current pre-k funding to cover both years of the upcoming biennium.

Girl showing bank notesAs filed, SB 1 represents a continuation of current school funding formulas. However, according to the Senate press release, Nelson calls  “making sure the school finance system better meets the needs of students” a critical decision to be made by lawmakers this session.

Other specific items outlined in the budget per the SB 1 press release include:

  • $1 billion to address state hospital and mental health facility needs;
  • $63 million to clear the waitlist for community mental health services;
  • $20 million for a program to help veterans dealing with PTSD or other mental health issues;
  • $260 million to improve Child Protective Services;
  • $25 million for high caliber bulletproof vests for Texas law enforcement officers;
  • $800 million for border security measures approved last session; and
  • A 1.5 percent across-the-board spending reduction for all expenditures not related to public education.

The Senate press release on SB 1 can be found here.

On the House side, Speaker Joe Straus has not yet named which representative will replace former Rep. John Otto (R – Dayton) as the new chairman of the House Appropriations Committee. Otto did not seek re-election in 2016. Still, the House did release its version of a plan for the base budget yesterday, too. The Speaker’s press release touts the House budget plan as one that “puts additional resources into public education, child protection and mental health while increasing state spending by less than 1 percent.”

The House budget proposal:

  • Funds enrollment growth of about 165,000 students over the next two years;
  • Includes an additional $1.5 billion for public education that is contingent upon the passage of legislation that reduces recapture and improves equity in the school finance system; and
  • Includes $108.9 billion in general revenue.

The Speaker’s press release can be found here.

And so begins the tenure of the 85th Texas Legislature…

ThinkstockPhotos-99674144Today marked the first official day of the 85th legislative session. At noon today, 181 legislators were sworn in before their families and other invited guests in their respective chambers. In the upper chamber, Senator Kel Seliger (R) of Amarillo was elected President pro tempore, while across the rotunda, Representative Joe Straus (R) of San Antonio was re-elected to his fifth consecutive term as Speaker of the House.

In a dramatic show of strength, Speaker Straus was elected by a vote of 150 to 0. He is now tied with Gib Lewis and Pete Laney as the longest serving Speaker in Texas history. In his comments today, Speaker Straus called on his fellow House members to be thoughtful with tax dollars but also smart with regulation, doing their part to ensure that the legislature creates a government that works. In his remarks on crafting education policy this session, the Speaker called on legislators to partner with teachers and not treat them as adversaries.

For the sake of educators and schoolchildren alike, we hope the sentiment of cooperation with the state’s teachers prevails over the remaining 139 days of the 85th legislative session. Either way, your ATPE lobby team will be here every step of the way to report back on what the legislature is doing with regard to public education and to represent you with passion and professionalism at your Texas capitol. We encourage you to join us in our efforts by talking to your own lawmakers about ATPE’s legislative priorities. ATPE members can use our convenient grassroots tools on Advocacy Central to track the progress of bills, send messages to lawmakers, and even receive mobile updates. Stay tuned to Teach the Vote and ATPE.org for more as the legislative session continues.

ATPE Lobbyist Monty Exter was at the Capitol to welcome legislators back for the start of the 85th legislative session.

ATPE Lobbyist Monty Exter was at the Capitol to welcome legislators back for the start of the 85th legislative session.

Rep. Dan Huberty shows off a celebratory cookie he received during a visit from Humble ATPE’s Gayle Sampley on opening day of the 85th legislature.