Category Archives: Funding

Highlights of the September TRS Board Meeting

The Teacher Retirement System (TRS) Board of Trustees convened in Austin this week for their regular quarterly meeting. Among items discussed by the board were space planning for the agency, creating regional TRS-ActiveCare offerings, and delivery of the 13th check to retirees.

TRS has recently been in the news with regard to new lease space in downtown Austin. Approximately 10 years ago, TRS ran out of space to house all of its employees at the 11th and Red River location. As a result, the agency moved its investment staff to leased space a few blocks away. Since that time both the TRS benefits/customer service staff and the investment team have continued to grow. Both the Red River location and the leased space are at maximum capacity now. In order to accommodate the size and needs of the investment staff, TRS has taken three floors in a new building, in which TRS is a part owner, further into downtown Austin. The board must determine whether to substantially renovate or move out of TRS’s Red River office in order to accommodate non-investment staff (primarily those working in customer service). Because all TRS costs, including staffing and space, are paid for out of the pension trust fund, these moves naturally bring up questions about whether the agency’s additional staff and office space requirements will bring in more value for TRS members than it costs to accommodate. There is no definitive way to answer this question, but ATPE and other groups representing active and retired TRS members will continue to monitor and report on the value of TRS spending.

Another program in which TRS is trying to find ways to improve its value proposition is TRS-ActiveCare. The agency staff and board members have begun looking into the development of regional ActiveCare options that school districts could choose to offer their employees. The move was prompted by actions taken by El Paso ISD over several years to try to exit the TRS-ActiveCare program. When the district could not find a way to do so under existing state laws, El Paso found a novel way to migrate most of its staff out of the state’s program and onto a new local plan, which was deemed to be cheaper than the statewide plan due to regional differences in healthcare costs. In response to El Paso’s decision and with the expectation that other districts may pursue a similar course of action, TRS is now looking into the possibility of regional options for school district employees. This project is in its preliminary stages and is something ATPE will follow closely as it evolves.

Finally, the TRS board also received an update this week on the 13th check provided to retirees as a result of Senate Bill 12 that was passed by the legislature earlier this year. The additional payment equates to the lesser of the amount of a retiree’s standard monthly annuity check or $2,000. TRS annuitants who receive their TRS payments through direct deposit received the 13th payment on September 10. The remainder of TRS retirees should have received a check in the mail by September 15. ATPE encourages any retirees who did not receive a check and believe that they should have received one to contact TRS directly.

Click here to watch a video of this week’s TRS meetings or review the board materials.

Teach the Vote’s Week in Review: Aug. 9, 2019

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


With back to school starting for millions of Texas students, it is time once again for students and teachers alike to buy school supplies. This weekend is the annual Texas Sales Tax Holiday, or “tax-free weekend,” as it is sometime called. This year’s tax holiday begins today, August 9, and runs through Sunday, August 11. During the holiday you can avoid paying sales tax when you buy most clothing, footwear, school supplies, and backpacks (sold for less than $100) from a Texas retail store or from an online or catalog seller doing business in Texas. ATPE members can also use their OfficeMax/Office Depot discount this weekend for even more combined savings.

Teach the Vote readers may have also heard about a grass roots movement started by teachers called #ClearTheList. Teachers participating in #ClearTheList or #ClearTheListsTexas post school supply wish lists on social media platforms like Facebook or Twitter, and companies or individuals will “clear their list” by purchasing the school supplies for the teacher to use in their classroom. Hopefully the day will come when we fund public schools such that these types of school supply charity drives will not be necessary, but until then – never underestimate the ingenuity or tenacity of a Texas educator to serve his or her students! To participate, type #ClearTheList or #ClearTheListsTexas into the search bar of any social media platform.

 


The Texas Education Agency is continuing to do its deep dives on the myriad new policies created with the passage of House Bill 3 with the release of another video in its “HB 3 in 30” series. This week’s video will dive into the outcomes bonus based on college, career, and military readiness, otherwise known as CCMR. A list of all previous HB 3 in 30 videos, as well as a schedule of upcoming topics, can be found at this link.

 


The movement to repeal the federal Windfall Elimination Provision (WEP), which decreases the Social Security benefits of many hard-working Texas teachers, gained media attention this week. This article by Lorie Konish of CNBC highlights recently introduced legislation by Texas Congressman Kevin Brady (R-The Woodlands) and quotes ATPE Senior Lobbyist Monty Exter. Look for more from the press and ATPE as additional bills are filed in Congress and the movement to address the WEP heats up in Washington this fall.

 


The 86th legislative session may have just ended, but that means a new election season is already upon us. Each day it seems that additional lawmakers are announcing their plans to retire as new candidates are announcing their bids to run, either to replace incumbents or for a chance to fill newly opened seats.

Without question, the 2019 legislative session was influenced in a positive way by huge voter turnout among educators and public education allies. If it weren’t for that turnout in 2018, there would likely have been no talk of an increase in teacher pay in 2019. It is critically important for educators to stay engaged this election cycle in order to maintain and improve upon the gains that were made last session, but it is also important for educators and all public servants to make sure they are expressing their political views and encouraging civic engagement among their peers in ways that are ethical and legal.

Thankfully, the Texas Educators Vote coalition, working in coordination with ATPE, has published this handy dos and don’ts guide on civic engagement around Texas elections. As educators head back to school, they can feel confident exercising their right to free speech with the aid of this guide. ATPE encourages members to check out the guide and other resources available from Texas Educators Vote on the coalition’s newly updated website, and be sure to follow Teach the Vote this fall for election updates and information to help educators stay politically active and make informed choices at the polls.

 


ATPE joined legislators and advocates from around the country this week for the National Conference of State Legislatures (NCSL) 2019 Summit in Nashville, Tennessee. This event draws together some of the brightest minds from the U.S. and abroad to discuss policy items of interest to state governments. Education is always a topic of lively discussion, and this year was no different.

Among the topics discussed were ongoing efforts to ensure all students are provided with an equally high quality of education, regardless of race or socioeconomic status. This continues to be a challenge in Texas and other states, where great disparities continue to exist both across and within school district boundaries. The U.S. Supreme Court ruled in Brown v. Board of Education in 1954 that laws passed to racially segregate schools were unconstitutional. Yet the Court’s decision in Milliken v. Bradley in 1974 essentially allowed segregation to continue as long as it is not explicitly intentional. The result has been de facto racial and socioeconomic segregation that continues in many parts of the state today, despite decades of efforts and lawsuits intended to achieve the original aim of integration.

Attendees also discussed efforts to improve the future of education, which includes working with employers to emphasize the role of the education system in creating the workforce of the future. How well we do at preparing future workers has a direct impact on the overall economy. Like Texas in 2018, many states have recently launched commissions to study ways to improve the public education system. The findings of these commissions are unsurprisingly similar to the results found by the Texas Commission on Public School Finance. For example, a commission launched by the state of Maryland found that investing in early education and better compensation for educators are both critical components of building a high-achieving education system. There is now a mounting body of evidence across the United States supporting these core determinations.


 

November 2019 ballot propositions and other election news

This week saw a steady trickle of election-related news. Some of it had to do with the upcoming constitutional election this November, and some of it had to do with races on the primary election ballot next March 2020.

First up, the Texas Secretary of State announced the ballot order for 10 proposed constitutional amendments that will go before Texas voters this November 5, 2019. Proposition 7 is the measure with the greatest direct impact on public education. House Joint Resolution (HJR) 151 passed by the 86th Texas Legislature describes the measure as “The constitutional amendment allowing increased distributions to the available school fund.”

Proposition 7 would increase the maximum annual distribution of revenue derived from public land by the General Land Office (GLO) or other agency to the available school fund (ASF) for public schools. If approved by voters, that maximum amount would increase from $300 million to $600 million per year. According to the bill’s fiscal note, the Legislative Budget Board was unable to predict whether this would provide enough additional permanent school fund (PSF) revenue to significantly offset state spending from general revenue.

Next up, a couple of familiar names in Texas politics surfaced in relation to federal races on the November 2020 ballot. State Sen. Royce West (D-Dallas) announced Monday he plans to enter the Democratic primary to challenge U.S. Sen. John Cornyn (R-Texas). West joins a crowded Democratic primary field that includes M.J. Hegar, who narrowly lost a general election race against Republican U.S. Rep. John Carter in Congressional District (CD) 31. Also on Monday, former state Sen. Wendy Davis (D-Fort Worth) announced plans to challenge Republican U.S. Rep. Chip Roy in CD 21. Republican U.S. Rep. Pete Olson announced late Thursday he will not run for reelection in CD 22, which is expected to be a hotly contested race next November. Expect campaign announcements to continue throughout the summer and fall.

As our friends at Texas Educators Vote (TEV) point out, now is a good time to review your voter registration status. Have you moved since the last election? Click here to find out if you’re registered to vote. If you need to update your registration, click here. The deadline to register to vote in this November’s constitutional election is October 7.

Here’s how TRS legislation ended up in the 86th legislative session

As the 86th legislative session came to a close yesterday, there were some significant changes made to the Teacher Retirement System (TRS) that warrant a closer look.

TRS Pension Reform

Senate Bill (SB) 12 by Sen. Joan Huffman (R – Houston), sponsored in the House by Rep. Greg Bonnen (R – League City), was passed 31:0 in the Senate and 145:1 in the House on the last day to pass bills. The bill will immediately reduce the funding window on the Teacher Retirement System (TRS) pension from over 90 years to pay off the unfunded liability to under 30 years. Reducing the time frame to less than 30 years also allowed the legislature to provide current retirees with an additional pension payment during the current fiscal year. The 13th check, as the supplemental payment is often called, will be the amount of the retiree’s regular monthly annuity payment up to a maximum amount of $2,000.

ATPE was strongly in support of shoring up the TRS pension fund as it will ensure that the primary retirement income for many Texas educators will be viable for decades to come. The passage of SB 12 also saves the state and taxpayers hundreds of billions of dollars in interest on the pension fund’s liabilities, and it puts the TRS fund in a position for policymakers to begin considering a permanent cost of living adjustment for retired educators as early as the next legislative session in 2021.

SB 12 calls for the state’s contribution to immediately increase from 6.8% to 7.5% in the 2020 fiscal year, which begins on Sept. 1, 2019. The state contribution rate will then continue to increase over time until the rate reaches 8.25% in 2024. School districts not paying into Social Security currently contribute 1.5% to the pension fund. Beginning in the 2019-20, all school districts will contribute toward TRS pensions with the district rate increasing by a tenth of a percent each year beginning in the 2021 fiscal year, until the district rate reaches 2% in 2025.  Active school employees’ contributions to TRS will remain at their existing rate of 7.7% for the next two years. Employee contributions will increase to 8% in the 2021-22 school year and 8.25% the following year.

Aside from injecting more money into the TRS pension fund, SB 12 contains a few additional provisions that are worth noting. For one, the bill maintains a provision that ensures that if the state’s contribution to TRS should decline in the future, then school district and active employee contributions to the fund would be reduced by the same percentage. It is worth noting, however, that any future legislature could vote to change this. SB 12 also includes a change for the handful of school districts that currently pay into Social Security on behalf of their employees. As noted above, those districts that opt to make Social Security contributions will no longer enjoy an exemption from paying into TRS, which Rep. Greg Bonnen said would add about $20 million per year to the fund. Only institutions of higher education will now be exempt from participating in contributing into the TRS pension fund for their covered employees.

Here is a summary of the details provided by TRS staff on how the final adopted version of SB 12 is funded over time:

 

TRS Healthcare

ATPE hoped that the conference committees for SB 12 and House Bill 3, the omnibus school finance bill that also passed, would find better ways to help active and retired teachers deal with the rising costs of their healthcare. There were internal discussions about increasing the state share of active employee health insurance costs. Currently, the state pays $75 per month toward premiums and requires school districts to pay a minimum of $150 per month on behalf of their staff. Employees cover the rest of the cost of their health insurance premiums. SB 12 significantly increases the state’s share of contributions going into the TRS pension system, and the final version of HB 3 does require districts to spend additional dollars on employee compensation (which could include increasing the district’s share of health insurance costs). Despite these improvements, neither bill addressed the inadequacies of the state’s share of active employee premiums in the end.

State lawmakers did make good on their pre-session promises not to raise TRS-Care rates for retiree health insurance. The state budget in House Bill 1 includes $230 million in supplemental funding to cover the projected shortfall in the TRS-Care trust fund. State leaders pushed TRS not to raise rates last fall when it became apparent that the amount of the shortfall for the upcoming biennium was going to be less than originally projected. The savings were largely due a combination of successful TRS contract negotiations and favorable provisions of the federal Affordable Healthcare Act taking effect. Unfortunately, barring a substantial change in the healthcare landscape, the projected shortfall for the 2022-2023 biennium is much larger than what lawmakers had to deal with this session to address the shortfall expected for the next two years.

How K-12 education fares in the President’s fiscal year 2020 budget

Credit: CNN.com

In each fiscal year (FY), which runs October 1 through September 30, the President releases his vision for the country’s budget. It really is just that- a statement on how the President believes money should be spent based on his (or her) priorities. Actual fiscal determinations are made by Congress. For example, past presidential budgets have proposed eliminating Title II of the Every Student Succeeds Act (ESSA), which provides over $2 billion in grants to states to improve teacher effectiveness. However, Title II has remained intact because Congress will not eliminate it.

The 2020 presidential budget proposal includes $62 billion for the Department of Education (ED) to provide K-12 and higher education programs and funding, which is an $8.5 billion or 12% decrease compared to what Congress enacted in the last budget. President Trump’s budget plan cuts K-12 education by $5.1 billion and calls for eliminating at least 16 programs. While maintaining current levels of funding for large programs such as Title I and the Individuals with Disabilities Education Act (IDEA), the President’s budget pushes multiple controversial programs such as school privatization marketed as “school choice,” charter school expansion, and performance-based compensation, as well as funding for magnet schools and school safety. The proposal includes the following:

  • Creating a federal tax credit costing up to $50 billion over 10 years for donations to scholarship programs for families of elementary and secondary students to subsidize private school tuition
  • $500 million (an increase of $60M) to fund the opening, expansion, and facilities of charter schools
  • $107 million to expand magnet schools
  • $50 million in new funding for districts participating in the Title I student-centered funding pilot, which allows districts to to use federal, state, and local funding for public school choice
  • Raising the percentage of Title I dollars states can use to fund expanded educational choice for disadvantaged students from 3% to 5%
  • Increasing the funding for the DC Opportunity Scholarship program, which awards scholarships for low-income students to attend private schools in Washington, DC

While the bulk of Title II under ESSA would be eliminated yet again, the FY 2020 Presidential budget proposes two main initiatives that affect teachers:

  • $200 million for the Teacher and School Leader Incentive grant program, which would support performance-based compensation systems and human capital management systems that include either mentoring of new teachers or increased compensation for effective teachers
  • $300 million (an increase of $170M) for Education Innovation and Research, mainly for studying teacher-driven professional development (PD) and providing stipends for teachers to attend PD

As for school safety, the budget includes:

  • $700 million ($354M increase) in Department of Education, Justice, and Health and Human Services grants to give states and school districts resources to implement the recommendations of the Federal Commission on School Safety (FCSS)
  • $200 million (increase of $105M) will go to ED for School Safety National Activities, which provides grants to states and school districts to develop school emergency operations plans, as well as counseling and emotional support. $100M of this will be used for a School Safety State Grant program to implement the recommendations of the FCSS

Other points of interest include TEACH grants, which award annual amounts up to $4,000 to eligible undergraduate and graduate students to become full-time teachers in high-need areas for at least four years. The Presidential budget proposes cutting funding to this program by $3.1 million. The Public Service Loan Forgiveness program, which allows the cancellation of federal student loans for non-profit and government employees after 10 years of on-time payments, is also eliminated in the budget.

In addition to the aforementioned maintained levels of Title I and IDEA funding, the FY 2020 Presidential budget proposal would maintain current levels of funding for many programs including state assessments, English language acquisition programs, migrant education, neglected and delinquent education, education for homeless children and youths, and rural education.

The budget would decrease funding to Indian education programs and impact aid, which helps to offset revenue loss to districts that serve areas that include federal lands. The budget plan also shifts around more than $12B in IDEA funding, cutting some programs entirely while increasing funding to others.

Lastly, the budget proposes elimination of many programs, including arts in education, full-service community schools, Promise neighborhoods, and Special Olympics educational programs. However, don’t despair! Remember, the president’s proposed budget is a suggestion and a statement of his priorities. Given the split control of the U.S. House of Representatives, it is even less likely that President Trump’s proposals as described here ultimately will be enacted.

The entire proposal includes all areas of funding across the government. If you don’t want to read the whole thing, check out the administration’s three-page overview. Keep in mind that these documents were created by the White House and do not represent an objective analysis.

ATPE will continue to monitor and report on the federal budget discussions in Washington with assistance from our DC-based federal lobby team. Stay tuned to Teach the Vote for updates.

Texas House files major school finance reform bill

Flanked by other members of the Texas House, Rep. Dan Huberty and House Speaker Dennis Bonnen announce the filing of HB 3 during a press conference on March 5, 2019.

Numerous members of the Texas House of Representatives filled a crowded room at the State Capitol today for a press conference heralding the filing of House Bill (HB) 3.

The much-anticipated school finance reform bill has been filed by Rep. Dan Huberty (R-Kingwood), who chairs the House Public Education Committee, with the support of House Speaker Dennis Bonnen (R-Angleton). At this morning’s press conference, Chairman Huberty shared that approximately 90 representatives had already signed on to co-author the bill.

HB 3 as filed calls for raising the basic allotment by $890 per student and increasing the minimum salary schedule that sets a statewide floor for paying teachers, librarians, school nurses, and counselors. The bill aims to help districts fund full-day pre-Kindergarten programs and also provides money that can be used for merit pay programs for teachers. During today’s press conference, Chairman Huberty insisted that the bill’s incentive pay proposal for teachers, which was inspired by recommendations of the Texas Commission on Public School Finance, would be based on factors other than the STAAR test. HB 3 does not include any across-the-board pay raise for educators like the one found in SB 3 on which we’ve also been reporting recently. The $9 billion price tag for HB 3 includes provisions for property tax relief, as well, since the bill provides funding to help school districts lower their tax rates by 4 cents and also aims to reduce districts’ recapture payments.

The House has created a website with additional information about HB 3, including a downloadable flier, at TheTexasPlan.com. Speaker Bonnen, Chairman Huberty, and other proponents of the bill are also encouraging use of the social media hashtag #TheTimeIsNow in promoting the bill. Readers of our blog may remember that on opening day of this legislative session, Speaker Bonnen shared that he had placed styrofoam cups in the House members’ lounge featuring the phrase, “School finance reform: The time is now.”

Chairman Huberty announced today his plans to have the House Public Education Committee hold a public hearing on HB 3 on March 12, and then have the committee make any necessary changes and vote the bill out on March 19 for floor consideration soon thereafter. Huberty also noted that he continues to engage in talks with Sen. Larry Taylor (R-Friendswood), who is spearheading similar school finance reform efforts in the Senate and plans to file his own version of a school funding bill (to be identified as Senate Bill 4) this week.

ATPE appreciates the high priority being placed on fixing the state’s broken school finance system this session, as well as improving teacher compensation, addressing school safety, and shoring up the Teacher Retirement System. We look forward to participating in the upcoming hearings on HB 3 and all other related bills that are being debated this session. We will continue to work collaboratively with the 86th Legislature to craft comprehensive solutions that will address our public school students’ complex funding needs, the desire to improve educator compensation, efforts to ensure that our schools are safe learning environments, and the increasing pressure of making sure teachers’ pension and healthcare benefits are properly funded so that we can recruit and retain the best educators in Texas.

Major Texas education groups agree on charter school policy agenda

This month, 15 major education groups in Texas agreed on a policy agenda for charter schools.

The groups include the Association of Texas Professional Educators (ATPE), the Texas State Teachers Association, the Texas Association of School Administrators, the Texas Classroom Teachers Association, the Texas American Federation of Teachers, the Texas Association of School Boards, the Texas Elementary Principals and Supervisors Association, the Coalition for Education Funding, Pastors for Texas Children, Raise Your Hand Texas, the Fast Growth School Coalition, the Texas Association of Community Schools, the Texas Association of Midsize Schools, the Texas School Alliance, and the Intercultural Development and Research Association.

In Texas, 5.5% of students attend charter schools yet they receive 10% of state funding for education. Because charters cannot levy taxes, charter schools are 100% funded by the state. Each charter school student generates the sum of the statewide average adjusted allotment (basic allotment adjusted using various weights for special populations and circumstances) and the statewide average property tax revenue across school districts. Last session, charters gained access for the first time to $60 million in facilities funding, or about $200 per student.

While charters are subject to the same accountability as traditional school districts, there are many differences in how charters operate. Texas law allows charters to accept and expel students based on academics and discipline, to employ non-certified teachers, and to choose whether or not to employ any counselors or school nurses. Additionally, the majority of charter expansion is under the charter amendment process, which allows for uninhibited growth of charter schools.

The joint policy agenda of the groups listed above focuses on increasing the transparency and efficiency of charter schools through seven recommendations for lawmakers:

  1. Allow for public transparency and input before any new charter amendments are approved in a certain community.
  2. The Texas Education Agency (TEA) should consider creating a standard charter application process and maintain an accurate charter school wait list to correctly document the number of unique students desiring charter admission.
  3. Charters should not be able to admit and expel students based on academics and discipline, as this creates inequality between charters and traditional school districts despite the fact that both receive public funds and are expected to educate all students.
  4. The Commissioner of Education should adopt procedures to analyze and report on the expected fiscal, academic, and program impact of each new charter school in order to maintain efficiency of the entire public school system.
  5. Since charters receive nearly $3 billion in public funds each year, they should publicly disclose their financial dealings, including leases, mortgages, contracts, and bond debt.
  6. Parents need to make informed decisions about where to enroll their children and should therefore have access to information on each charter school’s website such as student rates of expulsion, teacher certification and attrition rates, and the percentage of special education students.
  7. Charters received an estimated $882 million more than the school districts in which they reside during the last biennium. It is important to equalize this funding and require charters to pay into the Teacher Retirement System (TRS) just as districts do in order to create parity.

House Appropriations hears from TEA and TRS

The House Committee on Appropriations met Monday to hear from the Texas Education Agency (TEA) and Teacher Retirement System (TRS) on the issues of school safety, school finance, the teacher pension system, and active and retiree educator health insurance. Before delving into the meat of the hearing, Cmomittee Chairman John Zerwas (R-Fulsher) also announced membership of the subcommittees that will be overseeing separate subject areas of the budget.

The subcommittee on Article III that oversees public education funding will be chaired by Rep. Greg Bonnen, and include Vice-chair Armando Walle and Reps. Mary Gonzalez, Donna Howard, Matt Schaefer, Carl Sherman, Lynn Stucky, and Gary VanDeaver.

House Appropriations Committee meeting Feb. 4, 2019

Other subcommittees include: the subcommittee on Articles I, IV, V; the subcommittee on Article II; the subcommittee on Articles VI, VII, VIII; and a new subcommittee on  Infrastructure, Resiliency, and Investment.

The committee heard first from Texas Education  Commissioner Mike Morath on the topic of school safety, including physical precautions such as metal detectors and alarms. Morath noted there is no single investment in school safety that will address all current weaknesses and that the agency isn’t and hasn’t traditionally been tasked or resourced to help districts with regard to mental health components of school safety.

TEA’s Chief School Finance Officer Leo Lopez followed with a high-level overview of how public schools are funded. Lopez explained how the basics of tax rates, weights, allotments, and adjustments work to together to create a districts M&O entitlement; facilities funding; charter funding; and recapture. Also mentioned during the discussion were statutory quirks and system complexities like the fact that the basic allotment is set in statute, but legislators each session have the option of funding at higher levels through the appropriations bill. The committee also discussed how in 2011 the legislature created a mechanism called the Regular Program Adjustment Factor that allows lawmakers to decrease the entire Foundation School Program (FSP) entitlement for every district with a single adjustment.

TR) Executive Director Brian Guthrie walked committee members through pension fund operations. Guthrie explained the TRS board’s decision to lower the assumed rate of return last summer to 7.25 percent down from 8 percent, which came as a result of market forecasts and input from the fund’s actuary. This caused the funding period for pension fund liabilities to extend from 32 years up to 87 years. Under state law, the TRS fund cannot offer a cost of living adjustment (COLA) to retirees unless the amortization period noted above is within 31 years.

Guthrie noted that the agency is requesting a 1.8 percent increase in the contribution rate in order to achieve a 30-year amortization period, which would allow for the possibility of a future increase in benefits, such as a COLA. This would cost $1.6 billion for the biennium from all funds.

Responding to a question from Rep. Giovanni Capriglione, Guthrie estimated the average pension payment for a TRS annuitant to be about $2,000 per month. This average figure covers all classes of public education employees, including auxiliary staff, such as bus drivers and custodial staff. For classroom teachers who have worked in Texas schools for 30 years, that amount is closer to $4,000 per month.

Guthrie then explained the healthcare programs under the agency’s umbrella: TRS-Care for retired educators and TRS-ActiveCare for active educators. Healthcare costs have skyrocketed in Texas, despite rising at a level slightly below the national average. This resulted in a $1 billion shortfall for TRS-Care heading into the previous legislative session, which was addressed by a temporary infusion of additional state funding, coupled with a significant increase in fees and reduction in benefits. The fund continues to run at a deficit.

Rep. Schaefer asked what impact a pay increase would have on the pension fund. Guthrie indicated that if all teachers saw a raise, there would be a negative short-term impact for TRS as a result of higher salary calculations for retiring members without the benefit of higher contributions. Guthrie suggested this could be mitigated by phasing in the salary increases’ impact on the calculation of a member’s highest five years of earnings. Guthrie suggested the short-term impact on TRS-Care would be positive.

Asked by Rep. Stucky how much it would cost to make TRS-Care sustainable, Guthrie suggested it would take more than $12-15 billion to create a corpus sufficient to produce funding as a result of investment returns. Even then, that process would take some time to get up and running. The deteriorating value of TRS-Care has led many retirees to leave the program, which exacerbates the financial stresses facing it. Guthrie added that the population was beginning to stabilize.

TRS-ActiveCare, which allows smaller and mid-size school districts to enjoy the benefits of group coverage through a combined risk pool, also faces affordability challenges due to statutory restrictions on how that program is funded. Five percent of districts – primarily the state’s largest districts, such as Austin and Houston – have opted out of TRS-ActiveCare. Last session, legislation was considered to allow districts a one-time opportunity to opt in or opt out, but such a bill was not passed ultimately.

School finance commission approves final recommendations

The Texas Commission on Public School Finance met Wednesday for the final time to unanimously approve the final recommendations and findings to be included in the commission’s final report due to the Texas Legislature by December 31.

School finance commission meeting December 19, 2018.

The commission was created by House Bill (HB) 21 during the special session of the 85th Texas Legislature in August of 2017 after school finance reforms and additional funding proposed by the House were rejected by the Senate. The commission was charged with examining the school finance system and recommending potential reforms.

Members were appointed in the fall of 2017, but the commission did not meet until January 2018. Members heard roughly 80 hours of testimony from more than 150 witnesses, including ATPE. Progress on the final report had been stalled awaiting the product of a working group on revenues led by state Sen. Paul Bettencourt (R-Houston).

The final report contains 34 separate recommendations, which members spent hours wordsmithing Wednesday. Chair Scott Brister, who was appointed by Gov. Greg Abbott, resisted wording that would have called for “adequate” school funding or described current funding levels as “inadequate.” The chair’s suggestions centered on insulating the state against any potential for future school finance litigation, while other members of the commission argued for more explicit and specific funding increases.

Changes to the final draft considered on Wednesday included a new section containing significant and previously undiscussed suggestions for the construction of local teacher evaluation systems for implementing the differentiated pay program proposed by the commission. The suggestions outline the required components of district plans, which include student achievement as determined by test scores, administrator observations, and student perception surveys. Furthermore, the suggestions included minimum percentages for each category, requiring test scores to account for a minimum of 25 percent of an educator’s overall evaluation rating.

ATPE successfully lobbied for the commission to remove the percentages from its final report in order to avoid starting the legislative conversation with artificially predetermined weights for each of the recommended components. Despite the language in the report labeling these components as mandatory, they will in actuality serve as the starting point for bills that will be drafted and debated when the 86th Texas Legislature convenes in January. The same goes for all of the recommendations contained within the commission’s report.

The full report is titled “Funding for Impact: Equitable Funding for Students Who Need It the Most” and can be found here. ATPE responded to the final report with a press statement, which recommends the following additional considerations in light of the report:

1. Current public education funding levels are inadequate to meet the state’s education goals
and the needs of our 5.4 million students enrolled in public schools in pre-kindergarten
through 12th grade. Texas remains among the bottom one-third of states in per-student funding
despite educating a disproportionate level of students who are economically disadvantaged
and/or English language learners, both of which require significantly more resources to educate.
There can be no real school finance reform that fails to address adequacy. ATPE is
disheartened that some members on the commission were unwilling to acknowledge the reality of
the limitations of our state’s current funding levels out of fears of sparking litigation.

2. ATPE rejects the implication that school districts do not efficiently allocate the money they
receive under the state’s current funding system. In 2015-16, school administration counted
for little more than three percent of district expenditures, while instruction and direct student
supports combined accounted for more than 70 percent. The state’s share of public education
funding also has fallen dramatically. A decade ago, there was a roughly even split between state
funding and local taxpayers; in 2021, it is projected that state funding will be as low as 32
percent.

3. Texas teachers should be paid a salary that acknowledges their excellence in the classroom and
contributes to statewide efforts at recruitment and retention of outstanding educators. Focusing
on initiatives that would provide a premium salary only for “top teachers,” as the commission has
suggested, would address compensation concerns only for an estimated two to five percent of
our state’s teachers. A large percentage of the remaining educators serving our state’s students
are doing so effectively and deserve additional compensation. In order to achieve the stated goal
of providing all Texas students with an effective teacher, ATPE recommends that the
legislature set a statewide goal of paying all effective teachers a salary that is suitably
competitive and commensurate with the work they are doing—in addition to rewarding the
top teachers in the field.

4. The commission has recommended an educator effectiveness allotment to help school districts
boost salaries of their most effective teachers with state funding that would commence in the
2019-20 school year. However, the final report also suggests new and prescriptive criteria that
school districts would be forced to meet in order to receive the allotment, which would amount to
a major restructuring of teacher evaluation systems without appropriate vetting or study.
Considering the years of research and piloting that have gone into previous design changes to
teacher evaluations in Texas, ATPE strongly cautions legislators against mandating any
rapid, wholesale changes to teacher evaluation laws based solely upon a four-page
excerpt in this school finance commission report that did not receive adequate vetting by
commissioners or stakeholders prior to its adoption.

“ATPE appreciates the long hours devoted by commission members to researching the complexities of school finance and listening to the many concerns by our association and other stakeholders,” said ATPE Executive Director Shannon Holmes.

In particular, ATPE members have expressed gratitude for those who stood up for Texas students during the commission’s deliberations by arguing for the inclusion of additional public education funding. State support for public education has been inadequate to fully overcome the growing list of challenges that Texas schools face. How to address these challenges became a key issue during the 2018 election cycle.

“Texas voters have sent a strong message,” said Holmes. “The state must do a better job funding our
schools, and Texans will no longer accept excuses for failing to act.”

ATPE looks forward to forging real solutions on school finance when the 86th Texas Legislature
convenes in 2019. The association pledges to continue working with legislators to implement policies that will benefit all 5.4 million Texas schoolchildren.

SBOE tackles school funding, legislative priorities

The Texas State Board of Education (SBOE) voted preliminarily to increase the distribution rate from the Permanent School Fund (PSF) to 2.9 percent from 2.75 percent, based upon concern that some of the portion of the PSF managed by the General Land Office’s (GLO) School Land Board (SLB) has been held back from public schools. The total distribution will generate $2.38 billion and provide an additional $177 per student, down from $186 per student during the current biennium.

PSF Committee Chair David Bradley (R-Beaumont) said the percentage, while an increase from the rate discussed at previous SBOE meetings, does not fully make up for the reduction in funds created by the SLB’s decision to withhold funds from its distribution. Member Tom Maynard (R-Florence) described the decision as one that would increase the funds available to public schools while protecting the corpus of the PSF, which has been threatened by the GLO’s decision to engage in a “financial game of chicken” with the SBOE.

The board continued its streamlining of Texas Essential Knowledge and Skills (TEKS) for social studies after a full day of testimony Tuesday and discussions stretching into Wednesday’s meeting. Members also discussed the forthcoming Proclamation 2020 and cybersecurity courses.

Late Wednesday, the board discussed the Long-Range Plan for Public Education, which the board has spent more than a year compiling. Members made a few technical edits to the language, which can be found here, and discussed delivering the final report to members of the 86th Texas Legislature, which meets in January 2019.

The board discussed potential legislative priorities for the 2019 legislative session. Ideas considered included funding to support TEA’s TEKS review and textbook adoption process, funding for literacy and math academies, exceptional budget items for special education ad school safety, competitive teacher salaries and supports, new governance structure for the PSF, implementation of the recommendations of the school finance commission regarding dyslexia and dual language programs, and funding support for education service centers (ESC).

Member Marty Rowley (R-Amarillo) proposed asking for authority to raise the threshold textbooks must meet to earn the board’s approval to 100 percent from 50 percent of the required TEKS. Member Georgina Perez (D-El Paso) concurred, arguing that if students, schools, and districts are expected to earn an “A” for accountability purposes, the same should be expected of textbook publishers.

Member Keven Ellis (R-Lufkin), the board’s representative on the school finance commission, elaborated on the commission’s recommendations. While the recommendations are not final and one working group has yet to deliver its recommendations, members of the commission have proposed creating a 0.1 weight for dyslexia and a 0.15 weight for dual language programs. Ellis also updated the members on a recommendation heard by the Sunset Commission Wednesday to change the SLB to a five-member body, with one of the two additional members being appointed by the attorney general and one by the governor, with both selected from a list of members provided by the SBOE.

Chair Donna Bahorich (R-The Woodlands) emphasized that SBOE members should be ready to walk the halls for items that make the final list, and requested the PSF governance be placed at the top. Members closed out the meeting with year-end updates from each of the board’s three standing committees: Instruction, School Initiatives, and School Finance/Permanent School Fund.