Tag Archives: bonds

Texas school endowment hits record value

The Texas Education Agency (TEA) announced Tuesday that the endowment used to help fund public education in Texas hit a milestone achievement. The Permanent School Fund (PSF) reached its highest-ever value of $41.44 billion as of August 31, up $4.16 over the previous year.

The nation’s largest educational endowment today, the PSF was created in 1854 with a $2 million appropriation by the Texas Legislature. The Constitution of 1876 added certain public lands and all proceeds from the sales of those lands to the fund, and the Submerged Lands Act passed by the U.S. Congress in 1953 gave the fund control of mineral rights extending off the Texas coast into the Gulf of Mexico.

The majority of the fund, worth $32.73 billion, is managed by the State Board of Education (SBOE). The remaining $8.7 billion is managed by the General Land Office (GLO) through the School Land Board. The fund is invested in a diverse portfolio of assets and undergoes regular audits and performance reviews. Investment decisions often come before the board’s Committee on School Finance and the Permanent School Fund.

“The Permanent School Fund is the gift that keeps on giving to Texas schools,” State Board of Education Chair Donna Bahorich said in a statement provided by the TEA. “With the board’s careful oversight and the continued strong day-to-day administration of the Fund by the Permanent School Fund staff, the Fund will continue to support Texas schools for generations to come.”

“During the 2018-2019 biennium, the Permanent School Fund is projected to distribute $2.5 billion to Texas schools,” SBOE member David Bradley, who chairs the PSF committee, told the TEA. “This is the largest distribution in the Fund’s 163-year history and is $400 million higher than the distribution made in the 2016-2017 biennium.”

The PSF is also used to guarantee bonds by leveraging the fund’s AAA credit rating. Since 1983, the Bond Guarantee Program (BGP) has guaranteed more than $166 billion in bonds without default. In 2011, the Texas Legislature allowed charters to access the BGP. Despite the danger posed by risking taxpayer funds to guarantee loans to charters, which have shown a greater likelihood of financial trouble or default than school districts, the Texas Legislature passed legislation in 2017 to expand the amount of capacity available to charters.

SBOE Wrap-Up: November 2016

SBOE logoFriday, Nov. 18, wrapped up a busy November meeting of the State Board of Education (SBOE), which returned to Austin to tackle a wide range of subjects before the holiday break. Here’s a brief rundown of the week’s action.

Mexican-American Studies

The board said “no thanks” to a controversial Mexican-American studies textbook that sparked protests over factual errors and complaints regarding the way Mexican-Americans are characterized in the text. After a morning dominated by demonstrations and a press conference held by opponents of the textbook, the board denied approval and asked for more submissions of ethnic studies materials. The Texas Tribune‘s Aliyya Swaby has a blow-by-blow of the drama that unfolded on Tuesday. Read more about the board’s decision and what it means for both textbook publishers and school districts teaching the elective course in this press release from the Texas Education Agency (TEA).

TEKS in the Crosshairs

Wednesday’s agenda focused primarily on updates to the Texas Essential Knowledge and Skills (curriculum standards) for mathematics, science, English language arts, and reading. On the subject of math, board members heard exhaustive testimony regarding process standards, and whether less emphasis should be given to word problems and process questions both in the curriculum and on standardized tests. Members seemed to generally agree in a reduction in emphasis, but were concerned what the mathematics TEKS would be left with if process standards were done away with altogether.

The committee also heard reports from educator committees assigned to review the science TEKS in several areas, but most of the attention focused on biology. Reviewers recommended edits to the biology TEKS that included sections seen by some on the board as challenging the theory of evolution. In testimony, one biology teacher who sat on the review committee countered that the changes were made for streamlining purposes and preserved encouragement for instructors to engage in healthy debate of scientific theories. The Texas Tribune posted a summary of the arguments.

Bond Guarantees

On Thursday, the Committee on School Finance/Permanent School Fund delved into a question regarding the use of the fund to guarantee loans for new school buildings. When growing school districts want to build, for example, a new campus, they may not necessarily have the cash on hand to pay for it right away. To get things going, they can issue a bond – basically, a loan – which they can pay off, with interest, over time. Just like you, if a school district has better credit, it can get better financing and pay less interest, which can add up to millions of dollars for a big construction project. In order to get the best financing possible, public school districts with less-than-perfect credit can get the bond “guaranteed” by the $30 billion Texas Permanent School Fund (PSF). It’s a bit like your parents co-signing a loan: You get a better interest rate because they promise to pay the bank if you can’t keep up with your payments.

Dollar fanCharter schools can also take advantage of the Bond Guarantee Program, but on a limited basis. For qualifying charter holders, the amount available under the program is set by a capacity multiplier currently set at 3.25 percent. Charter holders complain the regime creates an annual rush to snap up limited resources. At Thursday’s hearing, they asked the committee to expand the multiplier to 3.5 percent, which would create several hundred million dollars in additional bond guarantees available to charters. Some on the board expressed concern over expanding the debt for which the PSF is liable to charters over which the state has less control. The board gave preliminary approval to raising the multiplier, while halting a related proposal by TEA staff to create additional academic criteria for charter holders to qualify for the program. The Austin American-Statesman‘s Julie Chang has a thorough write-up on the bond program discussion, complete with the following quote from ATPE Lobbyist Monty Exter:

“The board’s first priority should always be to protect the fund so that it continues to be available to guarantee new bonding for facilities for all Texas students,” Exter said. “We agree with the commissioner on enhancing academic requirements to access the bond guarantee program. Some board members have expressed concerns about expansion by charter holders who have not utilized their current capacity. ATPE encourages those members to continue to ask those sorts of questions.”

SBEC Rules

Friday wrapped with the board taking up several rule proposals sent to them from the State Board for Educator Certification (SBEC). All SBEC rules must undergo final review by the SBOE board, which can vote to reject and send back proposals or take no action — which has the effect of approving the proposals. All the SBEC proposals received final approval. Learn more about those educator preparation and discipline proposals in this recent blog post by ATPE Lobbyist Kate Kuhlmann.

Legislative Recommendations

The board also approved its 2017 legislative recommendations, which include a prohibition on vouchers, increased appropriations for TEA staff to adequately oversee and support the TEKS process, support for federal E-Rate support funding, an elimination of TEA’s arbitrary limit on students receiving special education services, and improved student data privacy, among others.

Farewells

This week’s SBOE meeting was the final one for two outgoing board members, Martha Dominguez (D) from SBOE District 1 and Thomas Ratliff (R) from SBOE District 9. Dominguez is an educator and current ATPE member; many of the board members referred to her as the heart or conscience of the board.

Thomas Ratliff

Thomas Ratliff

Ratliff, son of former Lt. Gov. Bill Ratliff, came onto the board eight years ago, after winning a primary election to replace the former board chair and a divisive figure in curriculum battles, Don McLeroy (R). During his tenure, Ratliff helped usher in one of the most productive and cooperative periods in the history of the SBOE.

Both of these members will be greatly missed, and ATPE thanks them for their service. After Dominguez and Ratliff decided not to run for re-election this year, their respective replacements were determined through this year’s elections to be Georgina Perez (D) and Keven Ellis (R). Perez and Ellis will begin their four-year terms in January

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May 10 election recap

Voters in Conroe/The Woodlands went to the polls Saturday, May 10, to choose a new state senator for District 4, but none of the four candidates garnered enough votes to win the special election outright. There will be a runoff election between Rep. Brandon Creighton, who earned 45.2 percent of the vote, and Rep. Steve Toth, who earned 23.7 percent of the vote. Both current state representatives are vying to replace former Sen. Tommy Williams, who resigned last fall.

Several school board elections were also held Saturday. In Waxahachie ISD, retired teacher and former ATPE Board of Directors member Kim Kriegel was one of two new members elected to the WISD board of trustees, defeating two incumbents. Read more about Kriegel’s victory here.

Also on Saturday, 73 school districts held bond elections to pay for everything from new school construction and facility upgrades to technology and enhanced security. Texas’s economy and population are booming, and with this increase in population comes a strain on our infrastructure, specifically Texas’s public education system. More than 85,000 new students are added to Texas public schools every year, which causes a very real and pressing need for expanded facilities and instructional materials. This is equivalent to adding a new school district in Texas every year that is larger than the Fort Worth or Austin school district. Partly as a result of constrained funding at the state level, districts have been forced to increase their reliance on voter-approved bonds to pay for essential services.

The results of Saturday’s bond elections were mixed. Several of the most expensive proposals passed, including a $1.2 billion bond in Cypress-Fairbanks ISD that will be used for technology, new schools, security and transportation improvements. Cy-Fair’s proposition was the most expensive one on the ballot this election. Pflugerville ISD residents approved a $287 million bond package that will be used in part to build an additional high school and stadium. Voters rejected a $125 million proposal in Wichita Falls ISD that would have paid for facilities upgrades. An $89.5 million proposition in Eanes ISD also failed. For more results on how various districts’ bond measures fared, visit TexasISD.com.

While it may be the opinion of some that particular bond proposals are not ideal, it must be recognized that whether local bonds pass or not, the demands and growing student populations that are often the driving factors for bond proposals continue to exist. Until school finance as a whole is properly addressed at the state level, there will continue to be added pressure on local school districts to raise revenue through local tax rate and bond elections.

ATPE Lobbyist Josh Sanderson contributed to this article.

Reminder: One day left for early voting in this weekend’s school elections

Saturday, May 10, is election day for many school board races and school bond proposals. Your last chance to vote early in that election is Tuesday, May 6. (NOTE: The early voting period for the May 27 primary runoff elections is still two weeks away. Both elections this month are vital!)

Please research the school board candidates and ballot propositions in your area by checking your local media. In many places around the state, the candidates vying for school board seats are educators and even ATPE members. There are also many bond proposals being considered. Your choices at the polls will have a direct local impact on compensation and employment matters for school district staff, graduation and curriculum requirements for students, school district budgets and property tax rates.

Saturday is also the special election in Senate District 4 to fill the seat of former Sen. Tommy Williams (R–The Woodlands), who resigned last fall. Four candidates are on the ballot there: Rep. Brandon Creighton (R), former Sen. Michael Galloway (R), Richard “Gordy” Bunch (R) and Rep. Steve Toth (R). If you live in that part of the state, be sure to check out their candidate profiles on Teach the Vote to learn more about their views on public education and past voting records.

The May 10 elections are critical for public education. Cast your early vote tomorrow at an early voting location in your county, or vote Saturday in your assigned precinct. Find more voting details and links at VoteTexas.gov. We also remind all educators to vote again two weeks from now in the state primary runoff elections. During the month of May, our motto is “Vote early, vote often and vote your profession!”

The other May election: May 10

By now you have hopefully heard about the May 27 runoff election, but that’s not the only election coming up next month. May has also traditionally been the month for school elections, particularly those of school board members and for school bonds. Over the years, many districts have moved these elections to November, but for those that haven’t, two weeks from tomorrow—May 10—will be election day.

Early voting for the May 10 election started today. We encourage you to get to know something about the candidates and ballot propositions in your area and cast a vote for public education when you head to the polls.

Also on May 10 is the special election to fill the vacancy left by the resignation of Sen. Tommy Williams (R–The Woodlands) in Senate District 4. Please visit Teachthevote.org to view the profiles of the four candidates vying to replace Sen. Williams, including the voting records of the two candidates currently serving in the Texas House.

TEA and SBOE member Pat Hardy tout performance of state school fund

In a press release issued today, the Texas Education Agency (TEA) announced that the state’s Permanent School Fund (PSF) achieved record investment performance last year.

The fund was created by the legislature more than 150 years ago to help fund Texas public schools and is administered by the State Board of Education (SBOE). Revenue, such as oil and gas royalties derived from public lands managed by the Texas General Land Office, is deposited into the PSF. Major functions of the PSF include paying for textbooks and providing highly rated guarantees for school bonds, which save money for school districts.

With a year-end value of more than $29 billion, the PSF yielded “the highest return of any major state of Texas investment fund for the fiscal year,” according to TEA officials.

SBOE District 11 member Patricia “Pat” Hardy is chairwoman of the the SBOE Committee on School Finance/Permanent School Fund. She attributed the PSF’s recent success to the “careful and prudent investment of the fund’s increasingly diverse portfolio.”