Category Archives: interim charges

Public Education committee looks at A-F implementation

The House Public Education Committee met Wednesday for an interim hearing on the implementation of school finance, accountability, and bullying legislation, in addition to an update on the impact of Hurricane Harvey on the public school system.

Texas Education Agency (TEA) Chief School Finance Officer Leo Lopez kicked off testimony with an update on money given out as part of a two-year hardship grant program under House Bill (HB) 21, as well as additional facilities funding for charter schools. Associate Commissioner Monica Martinez provided a briefing on new autism and dyslexia grant programs under the bill. Chairman Dan Huberty (R-Houston) noted that the hardship grants as well as the autism and dyslexia grant programs will expire without additional legislation. Additionally, the bill contained a one-time payment into the Teacher Retirement System (TRS).

House Public Education Committee interim hearing April 18, 2018.

A representative from Houston ISD testified that the district faces a $150 budget deficit this year and a projected $320 million deficit in the next fiscal year due to the district entering recapture. The district submitted a number of recommendations, including increasing funding weights for bilingual, English as a second language (ESL), and special education students, restoring the state’s share of funding to 50 percent, increasing transportation funding, and doing away with the recapture system.

A number of witnesses testified with respect to the hardship grants, warning that some small districts could face closure without further action to extend the grants or create an alternative source of revenue.

Lopez next updated the committee on the implementation of Senate Bill (SB) 179, or “David’s Law,” which addresses bullying and cyberbullying. The law requires TEA to work with the Health and Human Services Commission (HHSC) to develop a website with resources for school districts. Huberty noted that more work must be done to inform districts, students, and parents of the various provisions of the new law.

TEA Commissioner Mike Morath provided another update on the impact of Hurricane Harvey on the public school system. A total of 60 counties fell under the governor’s disaster proclamation, and 1.5 million students were in an affected school district. Morath noted that while the Federal Emergency Management Agency (FEMA) has been an important source of long-term recovery funds, the agency has been slow in making funds available.

The agency has launched a variety of mental health services, and provided accountability flexibility to affected districts. This includes waivers from 5th and 8th grade math and reading exams for all students affected by the storm. At the school and district level, the agency collected information regarding full and partial facility closures or relocations, student displacement, and staff displacement. According to Morath, at least 112,000 students were displaced statewide. Those three sets of data will be used to develop a rule to determine whether an accountability rating is issued to a particular school. Morath indicated a proposed rule will be published in the Texas Register sometime in early June, and the number of exempt schools could number over a thousand.

Morath suggested the final rule for Harvey-affected schools will be “substantially more generous” than the rule developed following Hurricane Ike in 2008. State Rep. Alma Allen (D-Houston) told Morath she would like to see a rule that provides for entire districts to be exempt from accountability ratings as well, though Morath offered no indication whether the agency is inclined to move in that direction. Vice-chair Diego Bernal (D-San Antonio) asked TEA to help develop recommendations for additional revenue sources for public education. Chairman Huberty warned TEA to leave that work to legislators.

The storm caused some $970 million worth of damage to public schools. Morath estimated lawmakers would be faced with the need to pass a supplemental appropriation to cover an associated decline in maintenance and operations (M&O) property values of roughly $500 million to $1 billion.

Houston ISD Board of Trustees President Rhonda Skillern-Jones testified about the storm’s devastating impact on the state’s largest school district, and the associated financial difficulties. The district asked for a one-year accountability pause, such as was provided after Hurricanes Katrina and Ike, for all schools in a county that fell under the governor’s disaster declaration. State Rep. Harold Dutton (D-Houston) asked how the district’s ten worst-performing schools were impacted, all of which are labeled “improvement required” under the current state accountability system and face imminent sanctions. The district indicated those schools sustained damage as well, and contended that a pause would not prevent those schools from being subject to potential TEA takeover, since a decision on each of those schools is required by April 24.

Finally, the committee heard testimony on HB 22, which made changes to the forthcoming “A through F” accountability system. TEA released a framework of the new system last week. Morath summarized that framework, and testified that cut points are being based upon last year’s performance and will be set for the next five years. District A-F ratings will be released in August, while individual campuses will continue to be labeled “met standard” or “improvement required.” Campus A-F ratings will be released in August 2019.

Alief ISD Superintendent H.D. Chambers testified that the local accountability system provided by HB 22 could be promising. Under the first domain, Chambers suggested changing the weights for STAAR; college, career, and military readiness (CCMR); and graduation rates from 40/40/20 under the current framework to a more even 33/33/33 or 35/35/30. Chambers also lamented the lack of indicators other than STAAR for grades three through eight under the new system, which represents a regression from the previous system.

Chambers asked that a greater weight under the CCMR indicator be given to students who complete a concurrent sequence of career and technical education (CTE) courses. Critically, Chambers cautioned that policymakers will be disappointed with the results of any accountability system until resources are aligned with what is asked of students and schools.

Spring Branch ISD Executive Director of Accountability and Research Keith Haffey similarly testified to the complete reliance on STAAR at the elementary level, and suggested considering additional metrics. One such metric could credit schools that fully transition English language learners (ELLs) to English. Additionally, one of the flaws of the new system is that the scoring limits credit given to students who take college pathway assessments such as the PSAT, SAT, or ACT, which acts as a disincentive for districts to offer these valuable exams. Huberty engaged Morath and Chambers in a conversation regarding the feasibility of providing a state appropriation to cover the cost of providing these assessments.

Dee Carney, an associate with school finance firm Moak, Casey and Associates, introduced model runs under the new accountability system. According to the models, most schools are unlikely to earn an “A” rating under the first domain. Carney testified that the additional of non-test indicators helps raise scores. The remainder of the day’s testimony largely focused on the system’s heavy reliance on the STAAR test.

The Rainy Day Fund Roadshow Makes a Stop in the House Appropriations Committee

The House Appropriations Committee, similar to its counterpart in the Senate, heard a number of interim charges Wednesday. Of note for public education, and for educators in particular, was an interim charge to continue to study strategies to use the Economic Stabilization Fund (ESF), also known as the “rainy day fund,” to generate additional revenue for state obligations without compromising the fund’s intended purpose. The charge instructed lawmakers to evaluate the current methodology used to set the ESF cap.

The committee heard testimony on ESF investment history, utilization, and investment practices from the Legislative Budget Board, the state comptroller, and the Texas Taxpayers and Research Association, whose executive director helped draft the legislation that brought the ESF into existence.

Read more about Comptroller Glenn Hegar’s plan to invest ESF dollars to create new revenue stream to fund state priorities and why that revenue is needed, in this previous Teach the Vote post.

Teach the Vote’s Week in Review: April 6, 2018

Here’s a wrap-up of your education news from ATPE:


The Texas Education Agency (TEA) made several announcements this week regarding the draft plan to address special education in Texas. In addition to accepting public comments on the latest version of the draft plan, TEA has scheduled two hearings where members of the public are invited to express their input. Information on the two meetings is as follows:

  • Thursday, April 12, at ESC Region 1 – 1900 West Schunior, Edinburg, Tx.
  • Monday, April 16, at ESC Region 10 – 400 East Spring Valley Road, Richardson, TX.

Both meetings will begin at 1 pm, and those wishing to share feedback are asked to register onsite beginning at 12:30 pm (registration will end when the meeting begins). Registered participants will be called in the order they are registered and will be limited to three minutes. The hearing will end when all have testified or at 3 pm, whichever comes first. Those unable to attend either hearing can submit their written comments by email at TexasSPED@TEA.texas.gov by April 18 at noon.

To learn more about the two public hearings and the chance to submit written testimony, view TEA’s full press release, visit TEA’s special education webpage, and read ATPE Lobbyist Mark Wiggins’s post from earlier this week.

 


Texas Commissioner of Education Mike Morath sent a letter to school administrators today regarding three recent changes to how the spring 2018 State of Texas Assessments of Academic Readiness (STAAR) exams will be administered. The three changes involve offering medical exemptions for qualifying students, allowing for the transcribing of student responses that are recorded in the test booklet onto a blank answer document, and relaxing the rules around classroom displays. His letter indicates these moves are being made in response to district feedback and in an effort to “do all I can to help make this a positive experience and reduce stress for students and school district and charter school personnel.” Read Commissioner Morath’s full letter to learn more.

 


It was a busy Wednesday at the Capitol this week, and your ATPE Governmental Relations team was there to cover all the action. ATPE Lobbyist Monty Exter covered the Senate State Affairs Committee meeting, where pension and healthcare issues were the topic of discussion. That meeting included conversations about the factors affecting the Teacher Retirement System (TRS) of Texas pension fund and the TRS-Care retiree health insurance program. For more information on how the hearing unfolded, read Exter’s recap of the meeting or watch an archived webcast. You can find ATPE’s testimony, and other public testimony, at the end of the recording.

 


The Texas Commission on Public School Finance met this week in Austin for a discussion on property taxes and their role in the school finance system. A smaller working group of commission members met Wednesday to discuss outcomes. The highlight of Wednesday’s meeting was former Assistant U.S. Secretary of Education Tom Luce, who suggested it’s time to do “more with more, not more with less” when it comes to funding public schools in Texas. This was particularly compelling advice from Luce, considering he was a key player in the state’s last major school finance reform – all the way back in 1984.

All 13 members of the commission met Thursday to hear several panels discuss property taxes. While there was general agreement on the burden imposed by property taxes, the debate between some members over how to calculate the state’s share of public education spending continued anew. Importantly, state Rep. Diego Bernal (D-San Antonio) requested the state prepare a list of school revenue sources that have been cut over the last 10 years. You can read a full recap of Wednesday’s working group meeting by ATPE Lobbyist Mark Wiggins here, and a rundown of Thursday’s full commission meeting here.

 


The Senate Education Committee rounded out a busy Wednesday in Austin with a hearing to discuss interim charges related to virtual schools, “high quality education opportunities,” and the federal E-rate program. ATPE offered written testimony to the committee concerning the virtual education charge, cautioning against moves to further expand the Texas Virtual School Network without carefully considering the status of virtual schools’ performance. Recent research highlights concerns regarding these schools nationwide and a look at Texas accountability measures fail to paint a drastically different picture in Texas. ATPE Lobbyist Kate Kuhlmann was at the hearing and offers more on the discussion here.

 


 

Senate State Affairs Committee discusses future of TRS pension fund

The Senate State Affairs Committee met in Austin this week to discuss interim charges about the health of various state and municipal pension systems, including the Teacher Retirement System (TRS) of Texas. The committee heard invited testimony from the staff and members of the Texas Pension Review Board (PRB), as well as the heads of several pension systems, including TRS Executive Director Brian Guthrie.

Some of the more general discussion included senators, including Sen. Charles Schwertner in particular, making the case that defined benefit pension systems are somehow inherently flawed and should be scrapped and replaced with 401(k)-style defined contribution systems. This now tired pitch, whose real aim is to line the pockets of private money managers, has been soundly refuted on many fronts, particularly as it applies to TRS. First 401(k)s have proven to be not so wonderful retirement vehicles. For the average American population which relies on them for the bulk of their retirement planning, these investment vehicles have proven to be a tool that generally leads to a woefully underfunded retirement account that is highly sensitive to market volatility and has left many in bad positions with regard to their retirement security. Second, 401(k)s were never meant to stand alone. They were really meant to be a supplement to a more traditional pension system, but even as that has gone by the wayside for many, they are still intended to be on top of Social Security benefits. However, most Texas educators will not receive full Social Security benefits because neither the educator nor the state is paying into Social Security on their behalf. This leads to the final falsehood promulgated by retirement privatizers, that defined benefit pension plans simply cost too much. The truth is Texas has been getting by on the cheap for decades.

Retirement experts will tell you that you should be putting away around 25 percent of your pre-retirement income for use in retirement. Half of that amount, 12.5 percent, is normally covered by contributions to Social Security. Any reasonably good private employer will put up a match of 4 percent, or better, toward an employee’s individual retirement account, in addition to paying the required 6.25 percent employer’s share of Social Security. This means that these private employers are on the hook for a little more than a 10 percent toward their employee’s retirement. Likewise, their employees must also put the required 6.25 percent into Social Security and typically an additional 4 percent or more into their own retirement accounts to access the employer’s match. For years the state of Texas only contributed 6 percent, the constitutional minimum, into the TRS pension system. Thanks in large part to the work of ATPE the state bumped that contribution up to 6.8 percent a few sessions ago. However, at only 0.55 percent above what the state would otherwise have to pay into Social Security, Texas still contributes less than half of what the next lowest state not paying into Social Security pays towards it educators’ retirements. Most Texas teachers are themselves contributing 7.7 percent, or just 1.45 percent above what they would otherwise be paying toward Social Security, into their pension system. When you add in the 1.5 percent districts are contributing into the TRS pension plan, the total contribution comes to 16 percent. At 16 percent, contributions into TRS are substantially less than what even average employers and employees are contributing toward retirement, and despite being many educators only source of retirement income, that is only 64 percent of what experts recommend putting away. So far from being “too expensive” as some lawmakers insist, the TRS pension system has been an exceedingly good deal for the state of Texas.

This discussion is of particular importance at this moment because while TRS has been reasonably healthy for a long time and has been on track to be actuarially sound (very healthy) within the next five years, those statistics have been based on TRS’s current assumed rate of return of 8 percent. Based on the advice of the external actuarial firm with which TRS contracts, the TRS board is considering lowering that assumed rate of return. In order to maintain the positive trajectory of the fund, legislators will need to increase the contribution rate going into the fund. Per the discussion above, these increased contributions are long overdue, and had lawmakers increased them previously, the fund would be in a much better place today. Additionally, many retirees wouldn’t have gone more than a decade without a cost of living adjustment. If TRS lowers its assumed rate of return, however, the decision to increase contributions will no longer be a luxury; it will be an imperative. ATPE is advocating for this process to take place gradually over a number of years so that the increased contributions, corresponding to a gradually decreased assumed rate of return on investments, won’t be a shock the system for either the state or educators who will both share the burden of increased contributions.

Whether a gradual approach is taken or a more “one and done” approach is used, as is being advocated by TRS, the important thing is that educators stay fully engaged with their legislators, and in choosing their legislators this election year, so that the health of the pension fund is secured.

Senate Education holds interim hearing on virtual education

The Senate Education Committee met today in an interim hearing covering “high quality education opportunities,” virtual education, and Texas’s matching of the federal E-rate program.

The day kicked off with a conversation aimed at understanding the roll out of the federal E-rate program, which Texas pursued through state matching funds in order to support high-speed broadband access across Texas public schools. The committee ended the day with a discussion on expanding access to “high quality education opportunities.” While a broad interim charge, the focus seemed to be on choice models within public schools. Invited panelists included traditional ISDs, charters, higher education, and TEA, all of which focused on sharing innovative programs within their institutions.

The middle of the day was dedicated to virtual education. The Texas Education Agency (TEA) began by offering an update to the Texas Virtual School Network (TxVSN) and explaining the routes available to students – supplemental classes through school districts and the full time program. Several members of the Senate Education Committee have sought, both successfully and unsuccessfully, to expand the scope of the program in recent sessions. At the same time, the TxVSN saw a significant hit to funding last session, dropping from $4 million to $400,000. As was noted during the committee hearing, expansion models proposed in the past have come with very high price tags to the state.

ATPE shared written testimony expressing support for both “offering virtual and distance learning opportunities as a supplement to campus-based courses for Texas students” and ensuring “strong quality controls exist for Texas virtual schools.” We also noted studies that challenge the success of virtual education and cautioned against expanding the scope of the network in light of these issues, which are consistent with Texas where full-time virtual programs have been plagued with low accountability scores. “It is irresponsible to expand access to the virtual school network without very careful consideration of whether we can ensure current students utilizing the network are receiving the quality education they deserve,” ATPE summarized.

The committee is not currently scheduled to meet again on interim charges, but there are a few left to cover before the legislature reconvenes in January. Of the interim charges assigned to the committee by Lt. Gov. Patrick, the committee still needs to study dual credit and mandate relief. Under the charge aimed at monitoring recent legislation, the committee must still review SB7 on educator misconduct related to inappropriate relationships, SB 22 concerning workforce pathways, and SB 1882 related to district and charter partnerships (although San Antonio ISD, which pushed to pass this bill, discussed it significantly today under the “high quality education opportunity” charge, along with several other panelists).

Teach the Vote’s Week in Review: March 30, 2018

The ATPE office is closed today, but here’s a look at this week’s education news:


As multiple committees and the Texas Commission on Public School Finance spend this interim looking at the issue of teacher compensation, ATPE is taking advantage of opportunities to share our expertise and our members’ feedback with lawmakers on the issue. This week, the Senate Education Committee took its turn at discussing teacher pay, and ATPE Lobbyist Kate Kuhlmann was one of the experts invited to testify at Monday’s hearing. Kuhlmann shared a number of things lawmakers should consider as they discuss any future plans to address teacher compensation in Texas, above all that those plans be funded, sustainable, and built from an adequate base.

For more on this week’s teacher compensation hearing, Kuhlmann has provided both a wrap-up of the discussion and a written summary of her testimony.

 


The federal government has approved a revised plan outlining how Texas will comply with the Every Student Succeeds Act (ESSA). After Congress enacted the law in December 2015 and the U. S. Department of Education (ED) issued regulations to interpret it, states have been required to submit their plans for ESSA compliance. Texas’s original plan was sent back for modification. For more on the final ESSA plan that has now been approved by the feds, check out this week’s blog post from ATPE Lobbyist Kate Kuhlmann.

 


Senate Education Committee hears from ATPE on teacher compensation

ATPE Lobbyist Kate Kuhlmann gave invited testimony at the Senate Education Committee’s interim hearing, March 26, 2018.

The Senate Education Committee met Monday to discuss three interim charges assigned to the committee by Lt. Gov. Dan Patrick: teacher compensation, classroom conduct, and the Texas special education corrective active plan. ATPE served as invited testimony on a panel specific to teacher compensation.

ATPE Lobbyist Kate Kuhlmann shared with committee members a number of things that should be considered when developing any compensation plan for educators, first and foremost that plans be funded, sustainable, and built from an adequate base. ATPE shared support for the minimum salary schedule and emphasized that levels of pay are more impactful when they are based on more meaningful step increases.

From a policy angle, ATPE shared that plans should be based on valid data and a meaningful picture of teaching, explaining that student standardized test scores are a woefully incomplete picture of a teacher’s success and that research has failed to validate the use of standardized test scores as a fair and viable measure. Kuhlmann also told legislators that any plan should be locally developed, transparent, and should involve participants in the development and revision processes.

Finally, ATPE stressed the need to consider and develop compensation plans in alignment with the entire teaching pipeline. For example, while pay is a critical component, working conditions remain another highly reported reason for teachers leaving the classroom. Efforts to support teachers once they are no longer novice, offer more time in the day for teachers to plan and prepare their lessons, and even enhance access to supplies can have an impact on retaining and recruiting our best teachers. Preparing teachers adequately before they enter the classroom and enhancing non-salary compensation benefits can have the same impact.

Panelists from Dallas ISD, San Antonio ISD, and Richardson ISD shared individual aspects of their respective compensation plans and discussed successes where they exist. Commissioner Morath presented data on the Texas teaching profession, confirming that on average teachers receive little to no increase in their salary when adjusted for inflation. It has become increasingly more concerning that while starting pay for a Texas teacher can be competitive, the lack of increase over time leaves little incentive to stay in teaching.

Watch the full hearing to listen to the discussion on compensation or to hear the conversation on the other two interim charges. The committee will reconvene next week, Wednesday, April 4, to discuss virtual education, “high quality education opportunities,” and the federal e-rate program.

Teach the Vote’s Week in Review: March 23, 2018

Here’s a look at this week’s education news highlights from the ATPE lobby team:


Congress advanced the omnibus spending bill to President Trump overnight and it received his signature this afternoon. The $1.3 trillion spending plan played out in a dramatic fashion, emerging Wednesday with support from both Republican and Democratic leadership, but with some waffling from President Trump.

After a bipartisan U.S. House vote of support (256-167) on Thursday and a similar vote in the Senate (65-32) that followed early Friday morning, President Trump again expressed consternation over the deal. He tweeted that he was considering a veto based on two missing pieces: full funding for his border wall and a plan for individuals that fall under the federal Deferred Action for Childhood Arrivals (DACA) program.

Ultimately, President Trump signed the legislation, but not without additional expressions of concern. Before the press this afternoon, he called the bill a “ridiculous situation” and told Congress he would never vote for a bill like this again, referring to its high price tag and lack of transparency. Trump said he was only signing it because it was a matter of national security and included increased spending for the military, the largest in history. He also highlighted several things he considers wins, like some initial funding to begin work on his border wall and dollars to address the opioid epidemic.

President Trump’s signature prevents a government shutdown that loomed at midnight tonight. Learn more about the spending plan, particularly as it relates to a funding boost for education, in this post from ATPE Lobbyist Kate Kuhlmann.

 


ATPE Lobbyist Monty Exter testified before the Texas Commission on Public School Finance on March 19, 2018.

The Texas Commission on Public School Finance met in Austin this week on Monday, March 19. The commission spent the day taking both invited and non-invited testimony from the public as the members consider their recommendations to the 86th Legislature for modifying the state’s school finance system. ATPE Lobbyist Monty Exter offered public testimony on behalf of ATPE, highlighting ways the school finance system could be overhauled to provide property tax relief. (The commission previously heard invited testimony from ATPE Executive Director Gary Godsey during an earlier meeting last month.) Read a full recap of Monday’s hearing and the extensive public testimony in this week’s blog post.

Ahead of Monday’s meeting, a consortium of education groups briefed the media on a new poll showing that most Texans support increasing the amount spent on public education. For more on the poll results, check out this blog post from ATPE Lobbyist Mark Wiggins.

A subcommittee or working group of the school finance commission tasked with studying school expenditures also held a meeting the following morning to take additional testimony relative to their charge. The working group is chaired by Rep. Dan Huberty, who also chairs the House Public Education Committee. Read more about Tuesday’s working group session here.

The chair of the full commission sparked controversy this week after he made comments questioning whether the state should spend money on students he referred to as “slow learners.” Special education advocacy groups were quick to complain about Chairman Scott Brister’s remarks, as reported by the Austin American-Statesman in this article that also features a quote from ATPE’s Exter.

The next meeting for the Commission will be on April 5, 2018 at 9 a.m. in the William B. Travis Building, Room 1-104, located at 1701 N. Congress Ave., Austin, TX. The meeting will be webcast at: http://www.adminmonitor.com/tx/tea/.

 


The Texas Education Agency (TEA) released its Draft Special Education Improvement Plan and Corrective Action Response this week to fix critical failures in the state’s special education system. The draft plan varies little from an initial draft the agency circulated in January, and the agency is seeking public comment on the latest version. You can e-mail feedback to TexasSPED@tea.texas.gov.

The plan carries a $211 million price tag, which does not include a substantial cost anticipated to be incurred by local school districts. The districts will be expected to perform the bulk of the work meeting the needs of children who were wrongfully denied special education services in the past due to districts’ following a TEA directive to limit special education enrollment. Because of this funding challenge, many school administrators are warning they will need additional financial support from the state in order to properly serve qualifying children. The Texas Council of Administrators of Special Education (TCASE) noted this in a press release this week, saying the TEA plan “is rich with school district monitoring and compliance measures, but fails to offer adequate financial and other support to districts.” Read the full TCASE press statement here.

 


Interim legislative hearings are in full swing now, and multiple committees are discussing how to address the state’s funding challenges that have a direct impact on public education.

Earlier this week, the Senate Finance Committee met to consider “options to increase investment earnings of the Economic Stabilization Fund,” often referred to as the state’s rainy day fund. Texas State Comptroller Glenn Hegar warned this week that the state could face a downgrade of its credit rating if it does not look at changing the way the $11 billion fund is invested. Decisions about the fund could have future implications for how the state funds teacher pensions and other education-related endeavors. ATPE Lobbyist Monty Exter has written more about the hearing in his blog post this week.

Another tough issue being debated by numerous committees this interim is teacher compensation. Several high-profile elected officials running for re-election have made teacher pay raises a key talking point in their campaign messaging, but few concrete plans or identified sources of funding have been proposed. On Monday, March 26, the Senate Education Committee will take its turn at debating the issue. ATPE Lobbyist Kate Kuhlmann has been invited to testify on the issue. Stay tuned to our blog next week for updates on this and other hearings.

 


 

Making better use of the state’s rainy day fund when it’s not raining

The Senate Finance Committee met today to take up a number of Senate interim charges. Among them, the committee took up the charge to examine options to increase investment earnings of the Economic Stabilization Fund in a manner that minimizes overall risk to the fund balance and to evaluate how the Economic Stabilization Fund constitutional limit is calculated; considering alternative methods to calculate the limit, and alternative uses for funds above the limit.

the Texas Economic Stabilization Fund, often referred to as the state’s rainy day fund, is a mechanism that diverts a part of the severance taxes the state collects on oil and gas production and sets those monies aside to fill budget shortfalls resulting from temporary economic downturns. The fund, which has been used many times since its inception, has in recent years grown to approximately $11 billion, larger than at anytime in its history.

During the last session lawmakers facing stiff budget constraints began to discuss how they could better utilize the rainy day fund, other than continuing to stuff cash into the state’s proverbial mattress. One idea floated by Texas Comptroller Glenn Hegar was to take a portion of the fund and invest it as an endowment such that the investment returns could be used to help pay for state priorities, like shoring up the state’s pension funds. Legislators were not comfortable acting on that idea without more time to vet it.

In today’s hearing Hegar reintroduced the idea of investing the whole of the rainy day fund in very liquid assets that would allow for a return that roughly matches the inflation rate and investing a portion of the fund, in excess of what legislators think they might need quick access to, in less liquid assets that would generate a higher return. The Comptroller’s office predicts that an investment of $3 billion, with additional biennial investments over a certain threshold, would within 10 years accumulate to a fund that generates $1 billion a year in usable revenue. In 20 years, that projection jumps to more than $2 billion a year. The idea was received fairly favorably.

One of the things the state has used the rainy day fund for in recent years is to justify credit rating firms’ assignment of a AAA (the highest) credit rating to the state. Having a AAA rating allows the state and school districts through the Permanent School Fund (PSF) bond guarantee program to pay the lowest possible rate on bond debt. It was pointed out in the hearing however, that the rainy day fund is only one factor those firms look at when assigning a score. Another, more heavily weighed factor is the health/unfunded liabilities of a state’s pension funds. Both TRS and ERS need improvement to ensure the state is able to keep its current rating. A downgraded rating could cost the state billions in additional interest over the life of the state’s and school dostricts’ many bonds.

From The Texas Tribune: Will Texas school finance panel tell schools to do more with less? Some members think it’s predetermined

By Aliyya Swaby, The Texas Tribune
March 16, 2018

Justice Scott Brister, chairman of the Commission on Public School Finance, listens to a commission member at the panel’s second meeting Feb. 8, 2018. Photo by Bob Daemmrich for The Texas Tribune.

A state panel responsible for proposing improvements to Texas’ embattled public school finance system is facing criticism from an unexpected source: some of its own members, who say the panel’s hearings seem geared toward a predetermined outcome of making schools do more with their current funding.

Texas school districts have repeatedly sued the state over the past few decades, arguing it hasn’t provided enough money to ensure public school students an adequate education. During the 2017 session, lawmakers failed to make immediate changes to how the state allocates money to public schools — and instead agreed to create a 13-member commission to undertake a longer-term study.

That panel, which includes appointees from House Speaker Joe Straus, Lt. Gov. Dan Patrick, Gov. Greg Abbott and the State Board of Education, has held four hearings since it was assembled in January. Its next hearing is scheduled for Monday.

In those hearings, some commission members argue, presentations by experts have been skewed toward making the case that schools do not necessarily need more money to produce better outcomes for students.

“There’s a steady stream of presenters … trying to convince us that there’s enough money in the system and that adding more will not show results — that districts are essentially spending the money incorrectly,” said State Rep. Diego Bernal, D-San Antonio, one of four members appointed by Straus.

He said the commission has also heard from school leaders with innovative ideas, such as how to keep the best teachers at the most challenging schools and how to use full-day pre-K to get students at an academic baseline early in life.

“Those two things without question cannot be funded or sustained with the current funding levels we have,” Bernal said. “Even the districts that piloted it said they were about to run out of money.”

But the panel’s chair, Scott Brister, disagreed that the hearings were staged for any predetermined outcomes. He said the Texas Education Agency’s staff has worked to bring experts who can provide a framework for how school finance works and what an adequate education looks like.

“You’ve got to figure out what you would like the schools to look like before you figure out whether you need more money or less money or where that money’s going to come from,” said Brister, a former state Supreme Court justice. Appointed to the commission by Abbott, Brister was the sole justice to dissent in a 2005 lawsuit brought by school districts claiming the school finance system was inadequate and inefficient. The court ruled in favor of the districts and forced lawmakers to overhaul the funding system.

“I’m not interested in spending more money and getting no change. What’s the point of that?” Brister said this week. “The Constitution requires school districts to be free and efficient. … Surely it means you don’t waste money on stuff that doesn’t work and doesn’t make a difference. That’s one of our constitutional standards. We have to consider it.”

Over the past decade, the state has decreased its share of public education funding, allowing rising local property taxes to make up the difference. Currently, less than 40 percent of school funding comes from the state, while local property taxes pay for more than half. In 2011, lawmakers cut more than $5 billion from schools to close a budget deficit and never completely restored the money.

Texans will have their first, and potentially only, chance on Monday to publicly address the commission. Texas school leaders and public education advocates are expected to spend several hours, if not the whole day, testifying that they want the state to invest more money in public schools, instead of relying on local property tax revenue, and that they cannot educate students on the budget they have.

“Only after you get past that question [of adequate funding] do you get to talk about how to spend that funding,” said Monty Exter, a lobbyist at the Association of Texas Professional Educators, who plans to testify Monday. Exter said he sees three different groups on the commission: one that wants to increase funding to public schools, another that believes public schools are important but that increasing funding isn’t feasible, and a third that wants to defund public schools.

“My argument is that you haven’t funded us enough to get better outcomes,” said Nicole Conley Johnson, a member of the commission and chief financial officer of Austin ISD.

According to the TEA, Austin’s school district is expected to pay the state $545 million this school year to help subsidize poorer school districts, through a function of the school finance system nicknamed “Robin Hood.” Austin ISD has the highest Robin Hood payment in the state and has gone through several rounds of budget cuts over the last few years.

Johnson, who was appointed to the commission by Straus, agreed that the commission hearings seem to be skewed toward efficiency: “They want more for the same amount of resources.”

During the inaugural commission hearing in January, former Texas Supreme Court Justice Craig Enoch showed members a chart of 2011 student state test scores for school districts mapped against the amount of money those districts spent.

“There is a pattern here, but the pattern is not based on how much money is available,” he said. “In fact, the school district that performs the best is the school district that gets $2,000 less per student than the average funding.”

He suggested the state look into why certain school districts do better with less funding, and why others do worse with more. “Scholars and education experts are divided on the extent to which there is a demonstrable correlation between educational expenditures and the quality of education. The thing that matters is student outcomes,” based on test scores or high school graduation rates, he said.

Johnson and fellow commission member Doug Killian, the superintendent of Pflugerville ISD, pushed back on Enoch’s chart, pointing out the data was outdated and not comprehensive.

Chandra Villanueva, policy analyst at the left-leaning Center for Public Policy Priorities, said the commission should be trying to ask what schools need to educate students, instead of asking what they can do with existing resources. “Let the Legislature decide if they want to raise taxes or shift other priorities in the budget,” she said. “I don’t think the [commission] should prematurely tie their hands.”

The commission will split into three subcommittees to brainstorm recommendations to the Legislature at the end of the year on where the state should get revenue to fund public schools, how it should overhaul existing formulas to allocate funding more equitably, and what it should expect its public school students to achieve. Each subcommittee will get to decide whether and how to include the public in its discussions, according to Brister.

Sen. Paul Bettencourt, a Houston Republican chairing the panel’s revenue subcommittee, said it’s too early to say what those recommendations will look like.

“We’ve been drinking from the fire hose on public policy. I haven’t had any discussions with anybody yet to step back and get out of the line of fire and see where we are now. For me personally, I’m still in listening mode,” he said.

Disclosure: The Association of Texas Professional Educators and the Center for Public Policy Priorities have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.

This article originally appeared in The Texas Tribune at https://www.texastribune.org/2018/03/16/school-finance-efficiency/.

 

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