Category Archives: Senate Finance

A closer look at Senate school finance and property tax plans

Senate Education Committee Chair Larry Taylor (R-Friendswood) filed Senate Bill (SB) 4 at the end of last week, which was the deadline to file most bills for consideration during the 2019 legislative session.

The Senate has focused on property taxes early on this session and also quickly passed SB 3 on March 4, proposing to give teachers and librarians a $5,000 pay raise across-the-board. For its part, the House spent most of the first half of the session preparing to unveil its comprehensive school finance reform plan. After the House released its major school finance bill, House Bill (HB) 3, many were waiting to see how the Senate would respond. SB 4 represents the Senate’s stab at a similar school finance plan.

In its current form, SB 4 is a rough draft with many portions left incomplete. As with the original version of HB 3 as filed, ATPE believes SB 4 as filed includes a mix of favorable and unfavorable proposals. Among its positive aspects, SB 4 would create a full-day pre-K program and allow educators’ children to participate in that. It would also provide professional development materials for implementing blended learning. Below are some additional details on the Senate’s school finance proposal:

SB 4: OUTCOMES FUNDING

The Senate’s bill includes a controversial outcomes-based funding model that would provide school districts additional money for students who perform well on standardized tests. Specifically, SB 4 would create a new third-grade reading allotment that would give districts an unspecified amount of funding for each “educationally disadvantaged” student who performs well on a third-grade reading test chosen by the commissioner of education. The commissioner would determine what it means to be educationally disadvantaged for purposes of this bill.

ATPE and other education stakeholders have continuously pointed out the consensus view of the education community: outcomes-based funding rewards schools that are already performing well, while denying resources to poorly performing schools that need those resources in order to improve. The third-grade reading allotment under SB 4 would likewise leave poorly performing schools to fend for themselves, while sending the resources they need in order to improve to districts that are already doing well.

SB 4: MERIT PAY

Regarding teacher compensation, SB 4 would create an “educator effectiveness” merit pay program. The program would require participating districts to provide merit salary increases based upon the educator’s performance under a new evaluation system that must include student surveys and student academic growth, which is generally measured through standardized test scores. The number of educators who can participate would be restricted to a small percentage of the statewide teaching population, and salary increases under this program would be higher for educators who are assigned to campuses with poor overall or domain performance ratings under the A-F accountability system. While districts would be given a degree of flexibility in designing these programs, the commissioner of education would ultimately have the sole discretion to determine what sort of program meets the criteria.

Research shows that student performance on standardized tests is not a scientifically valid measure of educator effectiveness, especially since the tests were not designed for that purpose. ATPE continues to warn that tying educator pay to student test scores will create a perverse set of incentives that only increases concerns about “teaching to the test.” ATPE supports programs that offer higher pay to educators who volunteer to serve at struggling campuses, take on campus leadership roles above and beyond their classroom duties, or who obtain advanced or high-needs training and certifications. Recognizing that what works for one district doesn’t necessarily work for every district, ATPE recommends that these differentiated pay programs be designed at the local level with input from educators, and not be tied to a single set of agency-approved criteria.

SB 4: OTHER CHANGES

The Senate’s school finance bill also includes school district funding for each student in kindergarten through grade three who is educationally disadvantaged or in a bilingual or special language program. It would create a new allotment to provide district funding for each educationally disadvantaged student who demonstrates college, career, or military readiness.

SB 4 would make the following additional changes:

  • Create new weighted funding for dual language instruction and students with dyslexia.
  • Expand career and technology education (CTE) program funding to the eighth grade.
  • Convert transportation funding to mileage-based from a linear density-based formula.
  • Order a study of the new instructional facilities allotment (NIFA).
  • Create new small and midsize and fast growth allotments.
  • Codify the state’s 60×30 graduation goal and order a biennial progress report.
  • Require students to fill out a FAFSA before graduation.
  • Eliminate intensive summer programs for students at risk of dropping out.
  • Adjust the equalized wealth level under Chapter 41.

The bill would eliminate the high school allotment, gifted and talented allotment, and outdated cost of education index (CEI), presumably to roll them into the basic allotment. Placeholder language in the bill indicates Sen. Taylor intends changes to other formula weights as well, but an estimate of the bill’s cost cannot be completed until those numbers are included.

SENATE PRIORITY BILLS

In the Senate, bills that are important to the lieutenant governor receive the lowest bill numbers. As one of the first five bills in numerical order, SB 4 is considered a major priority bill. The top five includes SB 1, which is the Senate budget that includes $3.7 billion to cover the $5,000 raise proposed in SB 3 — another priority bill. The addition of librarians to SB 3 raised the price tag of that pay raise bill to $3.9 billion.

The Senate’s property tax relief program consists of SB 2 and SB 5. Filed by Sen. Paul Bettencourt (R-Houston), SB 5 would increase the amount of state funding to local school districts in order to raise the individual homestead exemption from $25,000 up to $35,000. This would ease some of the burden on homeowners, who have paid for an increasing share of the cost of public education as property values have risen and the current funding formulas have allowed the state to decrease its contributions.

Also filed by Sen. Bettencourt, SB 2 would cap the annual revenue growth of local taxing entities, including school districts, at 2.5 percent. If local tax collections increase more than 2.5 percent due to an increase in property values, then the local taxing unit most lower the tax rate or hold an election asking voters if they can exceed the 2.5 percent cap. Cities and counties have argued that this could imperil their ability to provide basic services, including first responders.

The Senate has already passed SB 3, but an across-the-board teacher pay raise has faced a chilly reception in the Texas House. SB 2 faces an uncertain future, with members raising serious concerns over the impact the 2.5 percent cap would have on public safety and local services. At this time, SB 2 has yet to be scheduled for debate on the Senate floor. SB 4 and SB 5 are the most recently filed bills, and both await hearings in their respective committees. Keep checking back on here at TeachtheVote.org for updates.

Teacher pay raise bill sails through committee and is placed on Senate calendar

A bill that would grant all full-time classroom teachers a $5,000 across-the-board pay raise was placed on the Texas Senate Intent Calendar today. This move places the bill one step away from a floor vote in the upper chamber, which could happen early next week if the Senate continues the current practice of taking Fridays off.

The Senate Finance Committee voted unanimously Monday to approve Senate Bill (SB) 3 by state Sen. Jane Nelson (R-Flower Mound), who also chairs the committee. Gov. Greg Abbott has declared teacher compensation an emergency issue for this session, making bills dealing with teacher pay eligible for more expedited consideration by the legislature. SB 3 has been filed as one of the Senate’s highest priority bills for the 86th legislative session.

Sen. Jane Nelson invited ATPE State Vice President Tonja Gray to testify before the Senate Finance Committee on Feb. 25, 2019, about a proposed pay raise for teachers.

ATPE State Vice President Tonja Gray was invited to testify Monday in support of the bill. She provided oral and written testimony outlining the need for increased compensation and suggested that legislators could expand the raise to include school personnel aside from just teachers. Several other ATPE members and educators testified in support of the bill during Monday’s committee hearing, which coincided with “ATPE at the Capitol,” our legislative advocacy day held every legislative session.

The committee made a handful of changes to Sen. Nelson’s original bill on Monday. These include expanding the raise to include charter school teachers and covering the state’s and school districts’ increased cost of TRS contributions as a side-effect of the raise. The committee approved the revised bill by a unanimous vote of 15-0.

Research has proven that teachers are the single most important in-school factor contributing to student performance, and the best way to boost student performance is to provide students with access to the best teachers. This fact has been acknowledged by the governor, lieutenant governor, and house speaker in countless public statements over the past several months.

ATPE members filled the committee room for a hearing on Senate Bill 3 during ATPE at the Capitol on Feb. 25, 2019.

ATPE has been driving the conversation on teacher compensation, emphasizing that an across-the-board raise is important to help attract and retain high-quality educators. ATPE looks forward to talking about programs to offer additional, differentiated pay for educators who go above and beyond their regular classroom duties. This includes offering to pay educators more for volunteering at more challenging campuses, for obtaining advanced training and high-need certifications, and for taking on campus leadership roles, such as mentoring.

In order to give these programs the best prospects for success, it’s important that local districts be given the flexibility to design their own programs, include local educators in the process, and provide a professional level of base compensation by giving all teachers a long overdue raise first. It’s also critical that compensation decisions are not based upon student test scores, which are not a scientifically valid measure of teacher effectiveness.

After the Senate Finance Committee approved SB 3 on Monday, Lt. Gov. Dan Patrick met with ATPE members and announced that a teacher raise would be the “first or second” bill the Senate passes this session. The Senate has prioritized an across-the-board raise, setting aside $3.7 billion for raises in the Senate’s base budget proposal.

The Texas House is also looking at educator compensation as a priority issue, but the leadership in the lower chamber has not yet released its version of a bill to address teacher pay. In the meantime, House leaders have indicated in the meantime their support and preference for recommendations of the Texas Commission on School Finance, which include changes to weights and allotments and a merit-based pay program based upon Dallas ISD’s “ACE” model. This program would enable a small percentage of qualifying teachers to earn up to $100,000 for working at high-needs campuses. While a bill has yet to be filed, the cost of creating a statewide program similar to Dallas ISD’s initiative has been estimated at around $100 million, which is significantly less than the $3.7 billion price tag for the Senate’s across-the-board pay raise in SB 3.

The House’s budget includes an additional $7 billion for public education contingent upon the passage of property tax relief legislation. ATPE believes the $3.7 billion proposed by the Senate could fit within this $7 billion with enough room left over for property tax relief and additional school funding. Our primary goal in supporting SB 3 and other school finance-related proposals this session has been to work in a bipartisan manner with both chambers and other stakeholders to find comprehensive solutions to the state’s complex and growing public education needs.

If the full Senate approves SB 3 as is expected, Sen. Nelson’s teacher pay raise bill will head over to the House and the committee process will start all over. It is important to note that there are likely to be many changes along the way, and ATPE looks forward to working with both the House and Senate to reach an agreement that will benefit all 5.4 million Texas public school students.


ATPE Lobbyist Mark Wiggins and ATPE Governmental Relations Director Jennifer Mitchell contributed to this report.

Senate Finance Committee takes up public education funding in Article III of the budget

On Monday, Feb. 11, the Senate Finance committee heard testimony from the state agencies affected by Article III, the education portion of the state budget. Excluding those representing higher education, the committee heard from representatives of the Texas Education Agency (TEA) and Teacher Retirement System (TRS).

Chairwoman Jane Nelson (R-Flower Mound) opened the hearing with the Legislative Budget Board (LBB) layout of the TEA budget for fiscal years 2020 and 2021.

Sen. Nelson’s budget bill, Senate Bill (SB) 1, proposes approximately $6 billion in the TEA portion over current formula funding, including $3.7 billion for an educator pay raise and $2.3 billion for property tax relief.

Several members of the committee voiced displeasure with what they view as a mischaracterization by many in the public that the state’s share of education funding has fallen to 38 percent. The members noted that this figure only represents the state’s share of Foundation School Program (FSP) funding and that there are other state dollars being spent on public education outside of the FSP. To be fair, it is true that the 38 percent figure specifically refers to the state’s share of FSP funding and that the state also pays into other sources of school district funding, such as for facilities and TRS. However, the local share of facilities funding, for example, is much greater than the percentage that local districts pay toward FSP funding. Also, educators and school districts pay a significant percent of the money going to TRS for pension contributions and health insurance costs.

Senators also pointed out that they don’t control local property tax rates or rising property values, which under current law have pushed state general revenue funds out of public education. Both of these facts are true, but again, lawmakers have failed to modify existing formulas to drive increased state spending above what current law requires. This effectively starves public schools, leaving locally elected school boards little option but to maintain or raise their local property tax rates.

Following testimony of the LBB, Commissioner of Education Mike Morath walked the committee through the TEA presentation. The commissioner highlighted agency funding requests to deal with school safety and the agency’s special education corrective plan. The latter was necessitated by recent enforcement actions by the U.S. Department of Education and a ruling out of the U.S. Fifth Circuit Court of Appeals, both highlighting our state’s failure to properly address the needs of its special education population.

The commissioner’s testimony included a lengthy back and forth discussion with committee members on Monday. Chairwoman Nelson engaged Commissioner Morath on the topic of third-grade reading, an emphasis in the final recommendations of the Texas Commission on Public School Finance. Responding to questions about STAAR and third-grade retention, Morath pointed out that grade retention, which is no longer a mandatory result of failure to pass STAAR in the younger grades, is neither an efficient expenditure of money nor a particularly effective remediation tool.

When asked about the dual management of the Permanent School Fund, which has recently resulted in a feud between the Texas Land Commissioner and the State Board of Education (SBOE), the commissioner indicated that the current set-up probably costs the fund around $200 million a year in lost investment opportunities. Finally, in an exchange with senators about boosting performance among the state’s low socioeconomic student population, the commissioner touted the benefits of funding pre-kindergarten and Dallas ISD’s ACE model.

Next in the committee, TRS Executive Director Brian Guthrie laid out his agency’s presentation on the budget. He covered the TRS board’s action in lowering the pension fund’s assumed rate of return and the need for increased contributions to bring the fund back into near-term actuarial soundness. He also covered state cost issues related to TRS-Care and the educator affordability issues related to TRS-ActiveCare. Guthrie reiterated his agency’s request for additional staff, some of whom would be used to increase TRS customer service, while other positions would be used to bring additional investment management tasks in-house, for a projected savings of $1.4 billion over a five-year period.

Sen. Joan Huffman (R-Houston), who in addition to serving on the Finance Committee chairs the Senate State Affairs Committee, had a lengthy discussion with Mr. Guthrie. She covered last session’s TRS-Care bill, which she authored in the Senate, as well as the need for additional funding in the current budget and the need for continued reform to prevent the state from being right back in the situation it was in last session with runaway costs. Huffman then turned her attention to the pension system and discussed her plan to pass legislation that would increase contributions to the fund over a number of years. Her plan would reduce the funding period of the pension from 87 years down to 24 years and bring the plan back into a condition of actuarial soundness by 2020. Currently, the plan will not reach actuarial soundness or be able to offer retirees a cost-of-living adjustment for approximately 57 years.

After the committee concluded hearing testimony from the invited agencies, public testimony was entertained, including from ATPE Senior Lobbyist Monty Exter. Exter’s testimony focused on funding teacher compensation, the TRS pension system, and educator healthcare. He concluded by encouraging the committee to focus on equity when addressing new discretionary spending and deciding how best to go about reducing recapture and property taxes. Exter’s full testimony can be seen here (at the 2:40 mark in the broadcast).