Category Archives: Funding

No action is good action: TRS committee takes no action on TRS-Care premiums

The Teacher Retirement System (TRS) Board of Trustees is meeting today and tomorrow. This morning, TRS Chief Healthcare Officer Katrina Daniel updated the board’s Benefits Committee on the most recent fund balance shortfall for TRS-Care. Today’s update noted that as a result of several positive factors, that shortfall has fallen to approximately $240 million for fiscal year  2021, the second year of the upcoming biennium.

TRS-Care had already moved in a substantially positive direction by the time the agency laid out its legislative appropriations request (LAR) last week. The LAR had incorporated the shortfall, which was estimated to be $410 million as of June 30, 2018.

Since June, TRS has made significant progress in contract negotiations with Humana, the current third-party administrator of TRS-Care Medicare Advantage. The new contract will result in considerable additional savings to TRS-Care that brings the shortfall down to the approximately $240 million mark discussed today.

Based on the June 30 numbers, which have only improved, both House and Senate leaders have requested that the TRS board not raise premiums for retirees, but instead rely on their assurances that the legislature will fully fund the shortfall during the upcoming legislative session. Based on those assurances, TRS Executive Director Brian Guthrie recommended that the board take no action on increasing rates for TRS-Care.

in addition to leaving premiums the same for the upcoming year, the benefits side of TRS-Care will also remain the same for the upcoming plan year.

The TRS board documents related to this discussion can be found here, or you can watch an archived video of the discussion. The healthcare discussion starts at the beginning of the video.

Teach the Vote’s Week in Review: Sept. 14, 2018

It’s been a busy week in Austin. Here are highlights from the ATPE Governmental Relations team:


SBOE meeting Sept. 14, 2018.

Today culminates the end of a jam-packed week for the State Board of Education (SBOE), and ATPE’s lobby team was there throughout the week to testify and provide updates on the board’s activities for our Teach the Vote blog. Here are some highlights:

First, on Tuesday the body began its week by convening to discuss controversial social studies TEKS (Texas Essential Knowledge and Skills) that have been the subject of much political debate and social media attention. The board also took time on Tuesday to discuss its Long Range Plan for Public Education (LRP), which sets objectives for education through the year 2030. ATPE Lobbyist Mark Wiggins was on hand to commend the group on its thoughtful process, but also to suggest that the board take steps to increase the rigor of Educator Preparation Programs (EPPs) and insist that teacher pay not be too closely linked to evaluations and test scores. Perfecting amendments to the plan, most of which were in line with ATPE’s desired outcomes, were offered by SBOE Chairwoman Donna Bahorich.

The board kept its momentum going into Wednesday when it discussed special education and school funding. With an update from Commissioner of Education Mike Morath, the board learned that quite a bit of progress had been made on the state’s corrective action plan for special education with 70% of vacant positions filled. Morath also announced that TEA would be reviewing its contracting process, which comes after the Texas State Auditor’s office lobbed criticism at the agency for questionable contracting practices. Morath briefed the board on the A-F ratings that were given to school districts earlier this year. He also noted the decline in “IR” or “Improvement Required” districts across the state. Lastly, Morath informed the board of TEA’s Legislative Appropriations Request (LAR), which included two exceptional requests for funding for compensatory services for districts (in order to help them comply with the SpEd corrective action plan) and $50 million in funding for health and safety, $20 million of which is to be earmarked to comply with the governor’s school safety plan.

Later Wednesday afternoon, the SBOE also approved the funding distribution from the Permanent School Fund (PSF) for the 2020-21 biennium. Funds will be distributed at a rate of 2.75%. SBOE members expressed concerns regarding the deposit of funds into the Available School Fund (ASF) by the General Land Office (GLO), a move that will result in districts receiving $225 million less per year than normal. Several members of the board suggested actions in response to this action, including asking the GLO to reverse its actions and requesting that the GLO provide extra funding to cover the interest of the distribution.

On Thursday, the SBOE Committee on School Initiatives met to consider a rule proposed by the State Board for Educator Certification (SBEC) that would offer accelerated paths to certification for certain skill sets. The elected SBOE has statutory authority to review all rule actions taken by SBEC, a board whose members are appointed by the governor. SBOE members may veto SBEC rules but cannot make changes to them; SBEC rules for which the SBOE takes no action automatically become effective. For this week’s meeting, ATPE Lobbyist Mark Wiggins testified against the SBEC rule change regarding certain teaching certificates on the grounds that it exceeded the scope of the 2017 legislation upon which it was based, House Bill (HB) 3349. The rule change, as approved by SBEC earlier this summer, would have allowed certain educators to circumvent 300 hours of training in areas like pedagogy that are essential to normal pathways to certification. Members of the SBOE committee unanimously recommended rejecting the SBEC rule, and the certification rule change was ultimately rejected by a unanimous vote from the full SBOE board today, which will force SBEC to reconsider its action on implementing HB 3349.

Lastly, the full board met today to approve the first draft of language for the LRP, deciding to wait until November for final approval. SBOE members also finalized a formal letter to the GLO requesting that it cover the funding shortfall caused by its actions. Read more about the board’s actions in today’s blog post from ATPE Lobbyist Mark Wiggins.


As we have reported previously on Teach the Vote, ATPE has been an advocate for programs and resources to help prevent youth suicide. In 2015, we successfully advocated for the passage of an educator training bill aimed at preventing student suicides. Still, suicide, especially among Texans age 15-34, persists as a public health problem despite laws passed to prevent it. In this news feature by CBS Austin’s Melanie Torre this week featuring ATPE Lobbyist Monty Exter, Torre examines why the risk of teen suicide is still on the rise in Texas.

 


With the 2018 general election inching closer, and a major special election already underway his week in one San Antonio-area legislative district, ATPE wants to remind educators about the importance of voter turnout. Earlier this week, Texas Secretary of State Rolando Pablos released a statement urging voters to make sure they are registered to vote before the October 9th deadline. Pablos encourages Texans to plan their trips to the ballot box and to make sure they know what’s on their ballots.

“Prepare yourself, inform yourself, and empower yourself” – Rolando Pablos, Texas Secretary of State.

There’s a lot at stake this fall. We urge educators to view and share ATPE’s nonpartisan election resources here on Teach the Vote, including searchable profiles of every candidate vying for the Texas Legislature, State Board of Education, Governor, or Lieutenant Governor in 2018.

Meanwhile, early voting has already begun and continues through this evening in the special election runoff  to fill the vacant seat in Texas Senate District 19. Those SD 19 residents who miss early voting should play to get out and vote during their last change on Tuesday, Sept. 18th. The candidates in the runoff happening now are Democrat Pete Gallego and Republican Pete Flores. Find polling locations and additional information, courtesy of the Bexar County Elections Department, here.

Tuesday’s special election results and the outcomes of several high-profile races on the ballot in November could dramatically change the outlook for education bills moving through the Texas Legislature, and particularly, the Texas State Senate. In recent sessions, Lt. Gov. Dan Patrick has used the combination of a Republican super-majority in the Senate and his heavy-handed brand of managing the upper chamber to usher though a bevy of anti-public education bills, such as private school voucher proposals and legislation to take away educators’ rights to use payroll deduction for their voluntary association dues. How those same types of bills fare in 2019 will depend on the outcome of this fall’s elections. In this new post, ATPE Lobbyist Mark Wiggins breaks down the calculus of voting this fall.


ThinkstockPhotos-465016790_moneyThis week also proved to be insightful in terms of previewing discussions we’ll hear during the 2019 legislative session about both the state’s education budget and efforts to reform our school finance system.

Both the Texas Education Agency (TEA) and the Teacher Retirement System of Texas (TRS) laid out their Legislative Appropriations Requests (LARs) to the Legislative Budget Board this week. Details and links to video footage of TEA Commissioner Mike Morath and TRS Executive Director Brian Guthrie explaining their respective requests can be found here. ATPE Lobbyist Monty Exter provided additional analysis in this blog post.

Also this week, the Expenditures Subcommittee of the Texas Commission on Public School Finance convened to vote on their recommendations for the full commission. A breakdown of the committee’s goals, which include putting more funding into the basic allotment and shifting funds away from programs not directly tied to educational programming, can be found in this blog post by ATPE Lobbyist Monty Exter.

 

School finance commission subcommittee approves expenditures plan

The Expenditures Subcommittee of the Texas Commission on Public School Finance met this week to lay out and vote on their recommendations back to the full commission. Based on both the recommendation and what the committee members had to say, it became clear that their primary goal is to drive dollars into increasing the basic allotment. They also have secondary goals of shifting funds out of programs not tied to educational programming and into programs designed to increase educational attainment for harder-to-teach students, particularly economically disadvantaged populations and English language learners.

The committee has not publicly released its report yet, but a summary breakdown of the recommendations can be found below. A video archive of the full subcommittee meeting, which lasted a little under an hour, is also available.

Group 1 – Reallocations of existing programs. This group represents approximately $5.3 billion to be spent on increasing existing initiatives and creating new initiatives.

  • Reallocate the Cost of Education Index (CEI) – $2.9 billion
  • Reallocate the 92-93 Hold Harmless – $30 million. This program only impacts 12 -20 school districts.
  • Reallocate the Ch. 41 Early Agreement Credit – $50 million. Eliminates a program that currently pays property wealthy districts to sign an annual contract by Sept. 1 agreeing to pay the state what they owe in recapture. The discount did not require districts to prepay or early pay.
  • Reallocate the Gifted and Talented (GT) allotment – $165 million. This recommendation eliminates the stand-alone allotment but does not eliminate other requirements to provide GT education from the Texas Education Code (TEC). Currently 99.9% of districts are at the 5% GT cap, meaning the same dollars can be more efficiently flowed out to schools through the basic allotment.
  • Reallocate the High School Allotment – $400 million.
  • Move from prior year to current year property values – $1.8 billion.

Group 2 – Increased spending on existing programs

  • Increase state compensatory education allotment from 0.2 to a spectrum that ranges from 0.225 and 0.275 as part of a tiered system that pays out higher amounts to campuses with more severely challenging populations. Currently, the recommendation is still based on free and reduced lunch but could use a more sensitive metric.
  • Change the transportation allotment to a millage-based approach at 0.83 cents per mile, to be set by appropriations.
  • Allow Ch. 41 districts to get compensated by the transportation allotment at a $60 million cost.
  • Fund the stand-alone small-size and mid-size district adjustment between $0 and $400 million outside the basic allotment, depending on where the basic allotment is set.
  • Increase the New Instructional Facilities Allotment (NIFA) to $100 million. This represents a $76 million increase over last session.
  • Expand Career and Technical Education (CTE) funding to include sixth through eighth grades – $20 million.

Group 3 – New programs

  • Create a dual language allotment of 0.15 at a cost of between $15 and $50 million. This new allotment would be in lieu of (not in addition to) the bilingual allotment; you can either get the bilingual allotment or the dual language allotment, but not both.
  • Create a dyslexia allotment of 0.1 – $100 million.
  • Create a Kindergarten through third grade ELL/economically disadvantaged allotment of 0.1 – $786 million. This money is not tied to outcomes and can be used to fund any program that seeks to improve reading and math on grade level by grade three, including paying for full day Pre-Kindergarten programs.
  • Create a grade three reading bonus of 0.4 – $400 million. This provides incentive money for students meeting grade level in reading on the 3rd grade standardized test.
  • Create a College, Career, and Military Readiness Bonus – no specific weight – $400 million. This is envisioned as a reallocation of the High School Allotment and is aimed to drive the state’s “60/30” goals.
  • Create a teacher compensation program – $100 million. This is the governor’s performance pay program. It is formula-based, not grant-based, and is not subject to appropriation. There will likely be no fiscal note for the program until year three, and it is envisioned to grow over time.
  • Fund an extended year summer pilot program – $50 million. This program is intended to reduce summer learning losses for disadvantaged students.

Additional changes recommended:

  • Change the guaranteed yield on the copper pennies from a set dollar amount to a percentage of the Basic Allotment. When the yield was set, the dollar amount used represented approximately 88% of the basic allotment. Now it is much less. Increasing the guaranteed yield increases state entitlement, which helps property poor districts and recapture districts.
  • Decouple the golden pennies from Austin ISD.

Stay tuned to Teach the Vote for reporting on future actions of the commission.

SBOE wraps meeting with strong statement on school funding

The Texas State Board of Education (SBOE) concluded its September meeting Friday with final votes on a number of subjects.

SBOE meeting September 14, 2018.

One of the first orders of business was to approve a draft of the Long-Range Plan for Public Education (LRP). The board will delay final approval until the November meeting in order to give stakeholders longer to review the plan and changes suggested by the board Tuesday night. Member Ruben Cortez (D-Brownsville) voiced concern that the board was under pressure from the office of Gov. Greg Abbott to remove the recommendation in favor of “formula funded full-day pre-K.”

The board also approved Texas Essential Knowledge and Skills (TEKS) for Ethnic Studies: Mexican American Studies, as well as streamlining changes to the social studies TEKSMembers also voted on a number of items from each committee, including finalizing a rejection of problematic rules proposed by the State Board for Educator Certification (SBEC) that would have negatively affected teacher quality. Member Georgina Perez (D-El Paso) concluded discussion by pointing out that if certain areas are having trouble hiring teachers, the remedy should be more pay — not weakening standards. The SBEC will have a chance to fix the rule and submit changes to the SBOE in November.

Members also finalized a letter to the General Land Office (GLO) regarding a dispute over funding that could short schools roughly $450 million over the next biennium. The board voted unanimously to request the GLO reconsider its actions and provide an additional $500 million in funding for schools.

The board concluded with its annual ethics training. The next meeting is scheduled for November.

 

Does Gov. Abbott want to spend more on schools?

Election season is truly magical.

There’s just something about the seething mercury, the colorful proliferation of yard signs, and the specter of an existential showdown that awakens a – dare we call it – miraculous clarity in political combatants seeking votes.

When else can one witness folks who’ve spent the past 20 months fighting in bitter opposition to a particular set of constituents suddenly discover a deep love for the values they hold? The Lord works in mysterious ways.

It’s no surprise that we’re now hearing support for improving the school finance system from unexpected corners. To a certain degree, it’s positive evidence that educators are being heard, and that the powers-that-be realize that there is more to gain by working with the education community than working to dismantle it.

That doesn’t mean that efforts to dismantle it behind the scenes will stop. In politics as in statistics, things tend to revert toward the mean. The governing happens long after the polls close. Nonetheless, election season opens a brief window of opportunity to use our seat at the table to advance the conversation.

Let’s apply this lens to the latest Dallas Morning News opinion column by Gov. Greg Abbott (R-Texas), with the promising headline, “Texas must boost school funding.” The key passage summarizing Gov. Abbott’s message is as follows:

“We need to pay our best teachers more, reward teachers and districts for student growth, prioritize spending in the classroom and reduce the burden of skyrocketing property taxes. I’ll add up front that I believe the state will have to provide more funding.”

That last line seems to offer an acknowledgment of what we in the education committee have known for some time, but which many in the Capitol have resisted mightily.

The problem, of course, is that many of the people who have opposed investing more state dollars in public education have falsely argued that the state is already increasing education spending year over year. They point to raw dollars going back to a low-water point in 2006 in order to obscure the reality of the deliberate and steady erosion of state support for local schools. Troublingly, Gov. Abbott takes this very tack in writing that “overall education spending in Texas has increased by more than 50 percent since 2006, and the state is contributing 29 percent more education funding per student in that time period.”

Let’s look at that claim.

The numbers in the latter half of that statement come from a Texas Education Agency (TEA) presentation before the Texas Commission on Public School Finance. The headline of the slide below seems to confirm the governor’s assertion, but look at the orange line indicating funding adjusted for inflation. It clearly shows that in terms of purchasing power, total per-student funding has risen only slightly since 2006, and is roughly equal to per-student funding in 2008. (Click the image to view a larger version.)

Source: Texas Education Agency

What’s perhaps more telling is the blue bar indicating how much funding the state has contributed. I’ve added the red brackets and red horizontal line to make the minute changes easier to see. You can tell that the raw dollar amount the state has contributed has actually decreased slightly since 2008 – and that’s not even adjusted for inflation.

To get to the inflation-adjusted number, we look at the Legislative Budget Board’s (LBB) Fiscal Size-up for the 2016-2017 biennium. In the chart below, we can see how spending from local property tax revenue (circled in green) has increased, while state aid (circled in blue) has changed little from 2008 levels. In total constant dollars adjusted for inflation (near the red arrow), we see that total funding has in fact decreased.

Source: Legislative Budget Board

The governor also wrongly suggests that funding is not making it into classrooms. According to the TEA’s 2016-17 Pocket Edition statistics, districts only spend an average of 3.1 percent on administrative costs.

To his credit, the governor advocates that increases in funding should go to teachers. No disagreement there. His idea is to implement a system in which top-performing teachers can earn significantly higher pay by teaching in areas facing the most need – similar to the “ACE” system tested in Dallas ISD. It’s a conversation that’s worth having, provided that educators are involved in the process and that the system doesn’t rely primarily on student test results to identify those “top-performing” teachers.

Governor Abbott also suggests moving away from a per-pupil funding model and, implicitly, toward a more outcomes-based approach. This is problematic for a variety of reasons, not the least of which is identifying which metrics with which to measure student performance and the threat of schools faced with the most significant socioeconomic challenges receiving even less support.

Finally, the governor writes that school finance reform must be accompanied by reforms in property taxes. It’s true the two are inextricably intertwined.

Increasing the state’s share of public education funding is the surest way to provide relief in property taxes. The governor proposes forcing taxing entities to lower their rates as appraisals go up, with the state presumably stepping in to make school districts whole. That’s a lot to presume, especially to do so in perpetuity.

Districts could hardly be blamed for wanting to see the legislature commit money up front before committing to voluntarily lower their tax rates – and it will take a sizable appropriation to shift the burden back toward the state in a way that will be meaningful to local property owners. School board members are politicians too, and they don’t want to be blamed for high taxes any more than their counterparts in Austin.

So what does it all mean? Does the governor’s column signify a dramatic reversal of his stance on public education, and school finance in particular? Does it mean he’s ready to stop attacking educators through anti-teacher payroll deduction bills and focus on improving teacher pay instead?

At a minimum, the governor is now talking about public education as an important priority, and that’s a good thing. The onus is on us to engage respectfully yet forcefully, and to shape the conversation, to the extent we can, by correcting inaccuracies and providing meaningful input. At best, we hope the governor will listen to educators and incorporate our feedback, even after the elections are over.

Of course, just as election season begins in the frantic furnace of summer, it ends in darkness on a winter night. When the legislature returns in January, we’ll all be faced with cold reality.

Return to sender: Letters to TRS are political farce

Earlier this month, Lt. Gov. Dan Patrick released a letter sent to the Teacher Retirement System of Texas (TRS) urging the board not to increase TRS-Care premiums for retired educators. Quickly following Patrick’s lead, state Sen. Joan Huffman (R–Houston) released a letter of her own also urging TRS to not increase premiums. Huffman chairs the Senate committee charged with overseeing TRS.

With no TRS board meeting until late September and TRS releasing no additional information regarding potential premium increases, these letters came as a bit of a surprise to both education advocates and to TRS. They were also particularly shocking considering the fact that neither the lieutenant governor nor the Senate over which he presides are known for generosity in spending state dollars on education or educators.

Perhaps, however, when put into the context of an election season in which both retired and active educators are still miffed at the way TRS-Care reform was handled last session, the letters, which otherwise seem out of character, make more sense. For example, Lt. Gov. Patrick’s letter was addressed to the chairperson of the TRS board, but was simultaneously delivered to the press. Chairman Jarvis Hollingsworth and the rest of the TRS board are gubernatorial appointees, not an elected body. They serve at the pleasure of Gov. Greg Abbott. TRS, a state agency, operates under the direction and oversight of the legislature. Working directly with TRS, perhaps in coordination with the governor’s office, especially on an issue that isn’t yet public, would have been every bit as effective as making a public announcement of this type. Additionally, aside from the direct request not to raise premiums, the rest of Patrick’s letter sounds more like a campaign stump speech aimed at voters — claiming accomplishments and making future promises — than it does a typical letter expressing direction to a state agency.

Let’s look at some of those “accomplishments” and promises.

Patrick states, “In the last 4 years the Texas Senate has taken the lead in adding over a billion dollars to TRS Care funding including over $200 million in the Special Session last year.”

First, let’s address the funding from the special session. The special session occurred less than three months after the regular session ended, and the state’s economic picture was virtually unchanged. So what did change that allowed Patrick and the Senate to “find” $200 million dollars that they were unwilling to spend less than three months prior? The passage of the TRS-Care reform bill was one of the last things to happen during the regular session. As soon as the bill passed, news of the dramatic increases in retiree premiums hit like a ton of bricks. Hundreds — if not thousands — of retired educators began to call their elected officials, understandably irate. With a special session on things like the failed bathroom bill already on the horizon, additional money to somewhat lessen the blow to angry retirees was added to the call in an attempt to head off an all-out revolt.

Next, let’s put into perspective the amount spent over the last four years and address the way it was spent. A billion dollars sounds like a lot of money; but over four years it represents only about one quarter of 1% of the Texas budget. Additionally, all but $165 million of that billion was put into the budget as one-time supplemental funding. That is significant because the Senate all but refused to add money to the budget as an increase to the funding formulas instead, which is built into the base budget on an ongoing basis and significantly reduces the need to fight for that funding in future sessions. Not only did the Senate resist increasing the formulas beyond the $165 million, it’s in fact unlikely that any of the money would have been put into the funding formula had the House, under the leadership of Speaker Joe Straus (R-San Antonio), not fought for the formula increase.

If the dollars put into TRS in the 2015 session had been budgeted as formula instead of supplemental funding, the shortfall during the 2017 session would have only been about $300 million, instead of a billion. It would have been much easier for advocates to rally legislators to find $300 million dollars as opposed to a billion, and retirees could have likely avoided dramatic premium increases. Finally, had Patrick and the Senate put the money spent in 2015 and 2017 into the formulas, there would likely be little to no shortfall going into 2019.

Unfortunately, since the money spent over the last two sessions was not delivered through increased funding formulas, we do have a significant shortfall in TRS-Care funding going into 2019. However, the lieutenant governor goes on to state that he is “confident that the Senate will support additional funding for TRS Care” and that he “believe[s] additional funding should be the responsibility of the Legislature and not fall on the shoulders of our retired teachers.” Considering how hard advocates and retirees had to fight for funding last session, it’s good — though surprising — to hear that the lieutenant governor is confident that full state funding will be available this session. Hopefully that’s not the type of campaign promise that seems to evaporate as soon as the election is over.

Without a doubt, ATPE and thousands of retired educators would prefer TRS-Care premiums either decrease or remain steady, as opposed to increase. Whether or not that preference becomes reality will be entirely up to the next legislature. Let’s hope that retired and active educators remember how much impact elected officials have on them and their students when they cast a ballot in November and that elected officials remember how impactful active and retired educators are during the next session, after those ballots have been cast.

Teach the Vote’s Week in Review: August 10, 2018

Here’s your weekly wrap-up of education news from ATPE Governmental Relations:


On Monday, the Senate Select Committee on Violence in Schools and School Security published it’s interim report covering the charges assigned to it by the Lieutenant Governor in the wake of the Santa Fe High School shooting. Among the recommendations for each of the four charges were increased funding for enhanced school security, updating school building codes, funding school marshal programs, integrating counselor data into school records, and increasing the number of available counselors, among other things. For a more detailed report on the committee’s findings you can read this post by ATPE Lobbyist Kate Kuhlman. The full report is available here.

 


ATPE Lobbyist Monty Exter testifying before the House Public Education Committee, August 8, 2018.

Earlier this week the House Public Education Committee met to discuss the last of its interim charges. The hearing featured invited testimony from TEA Commissioner Mike Morath, who discussed the state’s accountability system and “A through F” ratings as well as T-TESS, the state’s teacher appraisal system, and ways in which the state could address the issue of teacher pay. ATPE Lobbyist Monty Exter was on hand to provide testimony suggesting that the state take a more holistic approach to the matter by improving the career pipeline and pay structure. Afterwards the interim charge on charter schools was discussed by members of the committee and TEA staff. It was noted that charter school teachers are not required to be paid according to the minimum salary schedule and contributions to TRS (which are calculated according to the salary schedule) have not risen along with inflation for that group of educators. ATPE Lobbyists Mark Wiggins discusses the hearing in depth in this blog post.

 


The Commission on Public School Finance working group on expenditures met this week to discuss its recommendations. Included in the recommendations were suggestions to repeal allotments like the high school allotment or the Public Education Grant (PEG) allotment; this would be done to move more funding into the basic allotment, giving districts more discretionary spending power. The group also examined how to adjust formula weights and funding tiers in order to best fund districts. ATPE Lobbyist Mark Wiggins provides a detailed recap of the hearing in this blog post.


TEA announced two new ventures this week that are aimed at keeping parents informed. The first, Answers….In About A Minute, is an online video library that will inform the public about TEA programs and initiatives. The initial series of videos will focus on the “A through F” rating system. The second venture TEA announced this week is the new TEA Time podcast, which will focus on different topics in public education. The first episode is a conversation with TEA Commissioner Mike Morath. According to the TEA website, new content for the Answers video series we be produced as new topics arrive while new episodes of the podcast will be recorded weekly.

 


 

This weekend qualifying school supplies and clothing items will be tax free. Happy back to school shopping!

 

 

 

 

 

 


 

Expenditures group considers potential recommendations

The Texas Commission on Public School Finance working group on expenditures met Thursday morning to discuss the group’s recommendations. Group leader state Rep. Dan Huberty (R-Houston), who chairs the House Public Education Committee, indicated no vote would be taken Thursday.

The school finance commission expenditures working group meeting August 9, 2018.

The first potential recommendations related to repeals that could free up “pots of money” to be reallocated. Commission Chair Scott Brister expressed confusion over how specific programs are funded, and suggested eliminating most programmatic funding and directing it toward the basic allotment instead. This included a discussion of repealing the high school allotment, the 1992-93 hold harmless provision, the staff allotment, the gifted and talented allotment, the public education grant (PEG) allotment, the transportation allotment, the local option homestead exemption for certain districts, the recapture discount, and the early agreement credit.

The staff allotment provides $250 for each part-time employee and $500 for each full-time not subject to the minimum salary schedule, which includes counselors and librarians – basically anyone who is not a teacher. State Sen. Royce West (D-Dallas) indicated he would be hesitant to repeal this allotment because he believes it serves its intended purpose. State Board of Education (SBOE) Member Keven Ellis contended that districts would be unlikely to reduce staff if that allotment were to go away.

State Sen. Larry Taylor (R-Galveston), who chairs the Senate Education Committee), proposed repealing the gifted and talented allotment. Sen. Taylor argued that most schools are already receiving five percent of their funding through this allotment, and including it into the basic allotment could allow districts more spending freedom. Sen. West clarified that members are not proposing that this money go away, only that it be delivered through a different mechanism, such as the basic allotment.

The discussion regarding the transportation allotment followed much the same logic. However, Member Ellis noted that rural districts face disproportionate transportation costs due to physical size and population density. Sen. Taylor suggested tying the funding to mileage. Sen. West offered the idea of weighted funding based on mileage. Chair Brister then questioned the value of schools having buses in general, suggesting that some districts would do better to simply encourage parents to carpool.

Rep. Huberty suggested PEG grants should be left alone because they offer a real incentive for districts to accept transfer students. It’s important to note that this is often cited as a key component of the public school choice system.

The group discussed using current year values for Foundation School Program (FSP) calculations, which would affect districts experiencing positive growth and negative growth differently. Rep. Huberty also noted that districts in which a significant portion of the local property wealth is tied to mineral wealth could experience more volatility.

Sen. Taylor suggested that pre-K is one of the areas in which districts could invest general dollars that have been untethered from specific programs, as discussed. The group discussed whether to incentivize half-day or full-day pre-K in order to achieve the goal of getting students reading by the third grade.

The group also discussed changing the equalized wealth level and simplifying the funding tiers, the recapture system in general, and the basic allotment. Brister contended that discussing recapture should be the purview of the working group on revenue, which is led by state Sen. Paul Bettencourt (R-Houston). With regard to the basic allotment, members expressed concern over tying the hands of future legislatures by tying funding to a rising cost such as inflation.

Members discussed the adjusted allotment, and Sen. Taylor proposed additional funding for charters. Sen. West quickly voiced opposition to charter expansion and the group quickly moved onto the next topic.

A larger discussion focused on the cost of education index, which was passed in 1984 and last updated in 1991. Member Ellis discussed moving to a more relevant index that includes teacher salaries. Sen. Taylor suggested districts also experience large variations in the cost of transportation, which could play a part in a CEI replacement. Rep. Huberty pointed out that even if the CEI were updated today, it would be out of date again within a few years.

The group took a look at the district size adjustments for small- and mid-sized districts, and Brister expressed the feeling that many smaller districts should be consolidated. Member Ellis noted that many rural districts have already consolidated services such as transportation and food services. Sen. Taylor suggested looking for ways to encourage districts to consolidate.

Regarding special education, Rep. Huberty indicated he did not feel comfortable tweaking weights and arrangements, and special education funding should be based on need. Huberty confirmed there will be more money pumped into special education, and members should wait and see how that funding affects the system before making modifications. Texas Education Agency (TEA) Chief School Finance Officer Leo Lopez said the increased cost of complying with order to serve all qualifying special education students is projected to be $682 million in fiscal year (FY) 2019, $1 billion in FY 2020, and $1.55 billion in FY 2021. Rep. Huberty also asked to explore fulfilling more private placement services within districts; for example, districts could offer incentives to improve retention of high-performing special education teachers.

On the issue of attendance, Sen. Larry Taylor suggested moving away from attendance-based funding requirements. Again, the argument for doing so was to give districts more flexibility, particularly at the high school level.

Members continued to focus on flexibility with regard to career and technical education (CTE), while expressing support for encouraging CTE and expanding middle school programs from eighth to as early as sixth grade. Regarding compensatory education, members discussed moving the identifying mechanism away from using free and reduced-price lunch. Members also looked at expanding the definitions to serve more low-income students who may not technically qualify under the current system. Regarding weights, the group discussed a hypothetical increase to the compensatory education weight to between .225 and .275.

Moving onto English Language Learners (ELLs), Sen. Taylor suggested the state incentive dual language over bilingual education where possible by offering a separate weight, rather than just increasing the bilingual weight.

On the issue of facilities funding, Rep. Huberty pointed out that legislators already voted to increase the new instructional facilities allotment (NIFA), but the system was stretched so thin that the anticipated benefit was not fully delivered. The next step would be to increase the cap from $25 million to $100 million. Sen. West again voiced concern about the saturation of charter schools.

The group then discussed staffing, beginning with a proposal to allow staff members’ children to take advantage of free pre-K. Rep. Huberty then talked about teacher compensation, including programs intended to incentivize top teachers to work at campuses facing the toughest challenges. Lopez suggested a tiered pay program that rewards high-performing teachers would have a low initial startup cost, but would ramp up over time. Member Ellis emphasized the need for local control in setting salaries and implementing locally-developed programs, such as the Dallas ISD program that is often cited as an example of a working performance pay system. Sen. Taylor suggested providing funding for this on the back end for districts that have already put these programs into practice.

Members were unanimous in its support for mental health and wellness programs, but indicated the subject may be beyond the purview of the commission.

The group noted changes to the Teacher Retirement System (TRS) of Texas ranging from adjusting the anticipated rate of return to rising drug costs and benefit reductions. Chair Huberty also indicated this subject may best be tackled by the relevant legislative committees. Notwithstanding this, the group entertained a discussion of requiring charter schools to pay into TRS at the same rate districts are required to pay. Lopez noted the interaction between district TRS contributions and the CEI, should the CEI go away.

Rep. Huberty asked TEA to pull a report together within the next 30 days, so the working group can schedule another public meeting to formally adopt its recommendations. Brister suggested getting recommendations to the full commission by mid- to late October so that the commission could consider them in November.

TRS update: The vote is in

After taking testimony from many active and retired educators and those who advocate for them, including ATPE, the TRS board of directors deliberated today and ultimately adopted an assumed rate of return of 7.25%, down from 8% currently.

You can read more about this issue in previous Teach the Vote blog posts, including this post from yesterday. ATPE has also released this press statement following this morning’s vote.

TRS has provided this infographic to help interested parties better understand the reasons behind the move to a new rate and address some questions related to change.

One thing is certain: the ball is now firmly in the legislatur’es court to properly fund the TRS pension through increased compensation rates. Educators who are interested in the health of the fund should keep that in mind at the ballot box in November.

What’s happening at TRS this week?


This week, the TRS board of directors will discuss and likely take action on a recommendation to lower the assumed rate of return (RoR), based on investment forecasts provided by independent financial experts hired to assess all of the assumptions TRS staff uses for planning purposes. Should the board lower the assumed RoR it would be in line with broader trends in the public pension sector, including TRS’s peers. The vast majority of experts expect less robust investment returns in the near and mid-term future.

In order to maintain the long term health of the fund without decreasing pension benefits, contribution rates will need to be increased to offset an anticipated decrease in investment revenue. Unlike many local pension systems (e.g., municipal, police, and fire), the TRS board does not set contribution rates for either employees or employers; nor does the board set the benefits paid out to retirees. Both TRS contributions and benefits are completely determined by the Texas legislature. Should the legislature fail to pass a plan to provide adequate contributions over time, the only remaining options would be to reduce benefits, further weakening current and future retirees’ retirement security, or put the fund into a situation where benefits being paid out exceed revenues coming in, which would place the fund on a path to eventual insolvency.

The bottom line is that the burden is on the Texas legislature to step up and provide the necessary funding to ensure actuarial soundness of the TRS pension fund and give educators peace of mind that they will not face cuts in their pensions or other dramatic pension plan changes. Historically, the legislature has not been proactive in this area and has not prioritized funding for retired educators’ needs, opting to delay action until the pension fund reaches a crisis level.

Some educator groups have urged their members to flood TRS board members with calls and emails this week. We believe their calls to action, while well-intentioned, are misdirected, as the TRS board has virtually no authority over contributions or benefits and, with regard to investments, has a fiduciary duty to act in what it believes to be the best interest of the fund based on the prudent advice of its financial experts. In other words, TRS has few options at this time, given the legislature’s disregard over the course of decades for the growing financial needs of the pension fund.

The only way to avoid a major TRS funding shortfall that will hurt the educators who depend on the fund is legislative action, not action from TRS. With that in mind, educators who care about the short- and long-term health of TRS should be focused on the legislature, not the TRS board members. Current legislators who have not prioritized TRS funding have caused the current problem. Is it reasonable to expect those same legislators to now fix it, or does it make more since go to the polls in November and elect legislators who will prioritize TRS funding as part of a general dedication toward public education?

Check back tomorrow for a follow-up report on what action the board takes on the assumed RoR.