Tag Archives: revenue estimate

Teach the Vote’s Week in Review: July 24, 2020

With the start of school just around the corner, it’s been another busy week for ATPE and the education community. Read about this week’s developments below from the ATPE Governmental Relations team:


CORONAVIRUS UPDATE: ATPE’s incoming State Vice President Karen Hames and Governmental Relations Director Jennifer Mitchell spoke on CNN’s Chris Cuomo Prime Time show Thursday night, July 23, to contribute their perspectives on school reopening. Hames and Mitchell stressed that teachers care about their kids and want to be in school with them, but that educators have concerns about being exposed to the coronavirus in a classroom setting. Hames shared reasons why school choice would not provide any real solutions to parents’ concerns about COVID-19, and Mitchell emphasized the need for additional federal funding and better guidance at the state level to help school districts prepare for reopening amid the pandemic. Watch video of the CNN segment here.

In other news related to COVID-19, the University Interscholastic League (UIL) released a long-awaited announcement this week that delays the schedules of 5A-6A conferences. Additionally, UIL shares that marching band practice in all conferences may not begin until September 7, 2020. Updates to TEA’s COVID-19 Support and Guidance Page this week included a new summary of the agency’s reopening guidance, several new “Strong Start” resources, and new CARES Act and attendance and enrollment information.

Visit the ATPE COVID-19 FAQ and Resources page for constantly updated resources and answers to common questions from educators. ATPE members can also use Advocacy Central to communicate with their elected officials regarding school reopening and other issues.


This week, ATPE submitted formal public comments on the U.S. Department of Education’s (ED) interim final rule directing how districts spend their CARES Act federal emergency dollars on equitable services for students in private schools. The interim final rule, effective July 1, 2020, is estimated to cause public school districts to spend over $44 million of their Title I-derived emergency funds on private school students regardless of poverty — more than $38 million more than they would normally spend under the longstanding interpretation of equitable services in federal law. ATPE’s comments urge the department to rescind its inequitable and distorted interpretation of the CARES Act, which goes against congressional intent. Over 5,200 comments have been submitted, but the department is not required to respond to them because of the emergency rulemaking process. Read more about the new federal rule in this recent Teach the Vote blog post. Read ATPE’s public comments here.


ELECTION UPDATE: Last week saw one of the most unusual elections in recent memory: A runoff postponed due to a global pandemic that proceeded to intensify in Texas as the new election date approached. Early voting was expanded from the usual one week to two weeks in order to reduce the load on polling locations. Some voters also took advantage of alternative methods of casting their ballots to avoid contracting COVID-19 at the polls, although Texas broke ranks with other parts of the country by refusing to expand the ability to vote by mail amid the pandemic. Despite the failure of lawsuits aimed at expanding mail-in ballot options, Texas saw a substantial increase in mail-in voting during this runoff election, which caused official results to be delayed by a few days but did not result in changes to any of the unofficial race outcomes revealed on election night. The July 14 election also exposed troubling voting issues that will have to be corrected before the November election.

With double the time to vote early, this month’s runoffs saw double the turnout over the primary runoff elections in 2018, 6.61% to 3.22%, respectively. After all of the debate over voting by mail, 30% of Democrats and 24% of Republicans who voted early cast their ballots by mail. That’s actually down from 36% of all early voters who cast mail-in ballots in the 2018 runoffs. Democrats had a huge turnout — nearly 956,000 voted in the primary runoffs, but comparable statewide numbers aren’t available for Republican turnout because there wasn’t a statewide GOP runoff like there was on the Democrats’ ballot. Party turnout in primary elections is not always an accurate predictor of turnout in the general election. But based on the turnout for a runoff election in July, in the Texas heat, in the middle of a deadly pandemic, it’s probably safe to assume that overall turnout for the November general election will be enormous. That makes researching candidates and making your voting plan for November more important than ever! See more election results in last week’s recap by ATPE Lobbyist Mark Wiggins.


CONGRESSIONAL UPDATE: The U.S. House Education and Labor Subcommittee on Early Childhood, Elementary and Secondary Education met Thursday, July 23, for a hearing on the safe reopening of schools. The discussion bounced back and forth between the health risks for children and health risks for teachers and staff, with implications across the board for future funding to get schools on the path to a safe reopening. Get the full rundown on the meeting in this blog post by ATPE Lobbyist Mark Wiggins.

While a proposal for additional federal emergency aid (dubbed the Health and Economic Recovery Omnibus Emergency Solutions or “HEROES” Act) was approved by the U.S. House several weeks ago, the U.S. Senate has now agreed on its own $105 billion aid package for education, which includes $70 billion for K-12 schools. The proposal would tie the K-12 funding to in-person instruction by sending $35 billion to schools that open for in-person instruction and splitting the remaining $35 billion among all schools, regardless of their method of instruction. The $30 billion for colleges will not be tied to in-person instruction, and governors will receive the last $5 billion to spend on either K-12 or higher education. The details of the proposal are expected to be made public on Monday.



After a week-long delay, the U.S. Centers for Disease Control (CDC) released updated guidance for the reopening of public schools during the COVID-19 pandemic. The brunt of the new guidance issued last night, July 23, consists of justifying the push to reopen schools for in-person instruction. New items include recommending that schools group students and teachers into isolated cohorts or “pods” meant to limit in-person contact. There is also a checklist intended to assist parents in deciding  whether to send their children to school. A new mask guidance document suggests masks can be worn by anyone older than two years old, though some groups of students may need special adaptations and alternatives. Even as the guidance encourages reopening, it urges caution to those considering to do so in areas of substantial, uncontrolled transmission. Furthermore, the guidance recommends tying operational decisions to local epidemiological conditions. The guidance states as follows:

“Schools should be prepared for COVID-19 cases and exposure to occur in their facilities. Collaborating with local health officials will continue to be important once students are back to school, as they can provide regular updates about the status of COVID-19 in the community and help support and maintain the health and wellbeing of students, teachers, and staff.”

All of the CDC guidance documents, including the latest guidance as well as recommendations dating back to May, can be found here.


The State Board for Educator Certification (SBEC) met today, July 24, to take action on several items implementing the Science of Teaching Reading exam requirements from last year’s House Bill (HB) 3 and to discuss COVID-19 considerations related to certification. Additionally, the board approved a proposal to transition Legacy Master Teacher certificate holders into lifetime certificates, as HB 3 barred the Master Teacher certificate from being issued or renewed. ATPE Lobbyist Andrea Chevalier testified before SBEC in support of this proposal, continuing our months-long advocacy for a fix for Master Teachers. Read more about today’s SBEC meeting in this blog post from Chevalier and read the written testimony here.


SCHOOL FINANCE UPDATE: Texas Comptroller Glenn Hegar created buzz this week with the release of his certification revenue estimate, which shows that the state faces a $4.6 billion deficit due to both COVID-19 and the largest drop in oil prices in decades. While some revenue sources have helped to soften the blow, including federal coronavirus aid and new revenue from online commerce, the uncertainties ahead will make the state budget lawmakers’ top concern in the upcoming 2021 legislative session. Read more about the revenue esimate and Hegar’s interview with the Texas Tribune this week in this blog post by ATPE Lobbyist Mark Wiggins.  

In other school finance news, Just Fund It, a non-partisan group of parents, students, and community members across Texas advocating for increased public school funding, has begun a petition aimed at urging Gov. Abbott to ensure stable and predictable school funding. Specifically, the petition asks the governor to extend the 12-week “hold harmless” period for calculating funding based on attendance as recently announced by the Texas Education Agency (TEA) for the coming school year. The group presents a compelling argument for extending the hold harmless to cover the entire 2020-21 school year.

Texas projected to face $4.6 billion deficit by the end of the current biennium

Texas Comptroller Glenn Hegar, the elected official charged with overseeing the state’s finances, now expects Texas will face a $4.6 billion deficit by the end of the current two-year budget cycle. The state had as recently as February been looking at a multi-billion dollar surplus heading into next session.

One of the comptroller’s primary jobs is releasing state revenue estimates, which project how much tax revenue the state is expected to collect in relation to how much it is budgeted to spend. These estimates are revised periodically, particularly in the event of a drastic change in economic circumstances. The economic downturn caused by the simultaneous events of the COVID-19 pandemic and the oil price war certainly marked a drastic change.

Certification Revenue Estimate 2020-21 Info-graphic from the Texas Comptroller

The comptroller told legislators back in April that the economic double-whammy had sent Texas officially into a recession. On Monday, Hegar testified before the Legislative Budget Board (LBB) and shared a revised revenue estimate that offered sobering numbers. The state is projected to end fiscal year (FY) 2021 with a budget shortfall of $4.6 billion — a $7.5 billion reversal from the $2.9 billion surplus his office projected in the certified revenue estimate (CRE) released in October 2019. The state is now expected to have $110.2 billion in available general revenue for the 2020-2021 budget biennium, representing an $11.6 billion decline from $121.8 projected in the 2019 CRE.

A mathematically-minded observer may note that the numbers do not exactly match up. Hegar explained that while revenue collections dropped by $11.6 billion, the budget fell by only $7.5 billion as a result of a handful of factors that reduced the amount of money the state was expecting to spend. Among them, Texas received $1.2 billion of federal CARES Act funding for public education that it used to offset state spending. Changes in the assumptions regarding the state share and the local share of public education funding resulted in $1.7 billion in unanticipated local funding. The state also received an additional $700 million in recapture (or “Robin Hood”) payments that it had not anticipated.

Source: Texas Comptroller

Sen. Finance Committee Chair state Sen. Jane Nelson (R-Flower Mound) asked Hegar in Monday’s LBB hearing whether legislators should expect to tighten their belts during the next legislative session. Hegar was reticent to prognosticate beyond the current budget cycle. However, he was quick to point out that he had pushed early on for agencies to reduce their spending ahead of next session. State leaders have since instructed state agencies to reduce spending by 5% across the board. Hegar noted that instruction is not factored into this projection. Any savings will however reduce the need for supplemental spending in the next legislative session, reducing the overall pressure on the next biennium’s budget.

In response to a question posed by Senate Education Committee Chair Larry Taylor (R-Friendswood), Hegar indicated that the state will be able to ensure schools receive the additional funding promised this budget cycle as a result of the school finance bill House Bill (HB) 3. Yet Hegar suggested there is tremendous uncertainty as to what the state will be able to provide in the upcoming 2022-23 budget cycle.

Lt. Gov. Dan Patrick (R-Texas) said Monday that school districts across the state have roughly $14 billion in fund balances, which represents each district’s cash reserves. Patrick suggested that the state could tap those fund balances to offset the budget deficit. Patrick separately acknowledged that teachers are now included in the list of “frontline” workers in the COVID-19 pandemic.

Texas Tribune Executive Editor Ross Ramsey (left) interviews Texas Comptroller Glenn Hegar (R-Texas).

The revised estimate released this week does not take into account agency budget cuts, whether schools reopen for in-person versus remote instruction, or any future federal relief money. Hegar explained Wednesday in an interview with Texas Tribune Executive Editor Ross Ramsey that the estimate does not factor in any additional federal relief money until a bill is passed by Congress and signed by the president. Hegar also told Ramsey that the estimate was based upon the assumptions that the economic recovery is already underway, that there will not be an additional spike in COVID-19 cases in the fall that would spark another shutdown, and that GDP may return to normal by the end of 2021.

Hegar said that the state saw a less drastic decline in sales tax revenue than he had previously feared. The state also took in $950 million more in taxes from online purchases as a result of legislation passed during the last legislative session that expanded the sales tax.

Source: Texas Comptroller.

The economic stabilization fund (ESF), commonly referred to as the “rainy day fund,” is projected to end FY 2021 with a balance of $8.8 billion. This fund is fed by taxes collected from oil and gas operations, which have been hit hard by the combination of lower oil prices and a reduction in production following the precipitous drop in demand caused by the economic impacts of the pandemic. The ESF was designed as a safety feature to enable legislators to dip into the fund to during lean years, smoothing out the fluctuations in available tax revenue caused by volatility in the oil and gas market and enabling the state to maintain critical government services.

In both testimony and interviews this week, Hegar has emphasized the need for the community to come to terms with the reality of a protracted battle against COVID-19. Hegar highlighted citizens’ responsibility to wear masks and engage in safe practices designed to slow the disease’s spread and prevent another shutdown. On a positive note, Hegar noted the healthy ESF and potential savings from agency budget cuts are among the measures at the state’s disposal to help manage the budget shortfall.

“There’s plenty of tools in the toolbox to be able deal with it as this current revenue estimate projects,” said Hegar, while adding the caveat, “Every revenue estimate has clouds of uncertainty, yet this one has greater clouds of uncertainty than ever before.”

The comptroller discussed other potential sources of revenue and savings in Wednesday’s interview. Hegar contended that an income tax is unlikely to pass in Texas, where such a proposal would require a supermajority of the Texas legislature and a statewide vote. The comptroller was also skeptical of the idea of legalizing and taxing marijuana, which polling shows is supported by most Texans. Hegar instead pointed to budget measures taken during the 2011 legislative session, which saw large budget cuts (including $5.4 billion from public education) as a result of a projected budget shortfall. The comptroller also mentioned deferring public education payments and looking at funding for Medicaid.

When the 87th Texas Legislature convenes in January 2021, shoring up the current budget will be the first task legislators face. Their next task will be to set the budget for the 2022-2023 biennium, which Hegar warned is likely to be a much bigger issue — although it’s too early to forecast the scope of the challenge. That will be the focus of the comptroller’s biennial revenue estimate (BRE), which is usually released right before the new legislative session begins.

State comptroller says Texas is in a recession

In an interview Tuesday morning, April 7, 2020, with Texas Tribune Executive Editor Ross Ramsey, Texas Comptroller Glenn Hegar repeated a statement he had already made to legislators in private last month regarding the combined economic impact of the COVID-19 pandemic and plummeting oil prices.

“I know that we are unfortunately in a recession,” said Hegar, whose office oversees the state’s finances. “I just don’t know how deep or how wide it’s going to be.”

The comptroller’s certification revenue estimate in October 2019 projected that the state would end the current budget cycle with a balance of $2.9 billion in general revenue and $9.3 billion in the state’s economic stabilization fund (ESF), which is often referred to as the “rainy day fund.” Hegar said he plans to release a revised revenue estimate in July, which he predicts will be several billions dollars less. Many are questioning just how much of a toll the double-whammy of a pandemic and an oil price war will take on the state’s budget — especially after legislators significantly increased public education funding under House Bill (HB) 3 in 2019.

Hegar said Tuesday the state is expected to have enough cash flow to meet its obligations through the end of the current budget, which runs through August 31, 2021. While contributions to the ESF are expected to decrease as a result of declining oil and gas revenues, the comptroller’s office is still projecting a balance of $8.5 billion in the fund by the end of the current budget cycle.

Altogether, Hegar said he does not believe legislators will need to be called into a special session this year to shore up the current budget, but he added that the start of the next legislative session in January 2021 will be quickly upon us. Next session, legislators anticipate facing the daunting task of funding state priorities over the next budget cycle with significantly less money available.

The reason less money will be available has to do with how Texas government is funded. Since Texas does not have an income tax, sales and use taxes account for 57% of state revenue. Local governments are funded by a combination of sales and property taxes. When places like bars, restaurants, and stores make less money, they send in less sales tax revenue. Surging unemployment has the same effect on sales taxes by depressing consumer spending, as well as inhibiting people’s ability to keep up with their property taxes.

All this is happening at the same time the demand for government services such as unemployment, healthcare, and food assistance is increasing. The result is an unprecedented strain on government at every level, yet Hegar noted that state agencies should look for ways to cut spending.

The comptroller’s office is currently working off of sales tax revenue reports released in March detailing economic activity that happened in February, which was before social distancing was enforced. April sales tax numbers will provide a better look at the economic impact of business closures and downsizing, but that report won’t be available until the end of May. Hegar is waiting on those numbers to give a better estimate of the impact on the state budget in the planned revised revenue estimate this summer.

So what does this all mean for public education? It’s still unclear. Hegar noted Tuesday that  education and health and human services make up the two largest components of the state budget. Hegar noted that state leaders will likely begin discussing ways to cut agency spending during the current budget cycle, but he suggested that areas like the Foundation School Program (FSP) and Medicaid should be exempted from cuts this year. The FSP is the finance formula that flows funding for public education to local schools.

The state is also awaiting federal coronavirus aid recently passed by Congress, which will send billions of dollars to schools across the nation. Future federal aid packages are likely to have an additional impact on the state budget going into next session. There are already talks coming out of Washington about a fourth coronavirus stimulus bill that could provide as much as one trillion dollars in additional aid.

The one phrase Hegar repeated multiple times throughout this morning’s 45-minute interview was “managing expectations.” The comptroller was clear that the state is in the midst of a recession driven largely by the COVID-19 outbreak and aggravated by the oil price war. We still don’t know how many billions of dollars this will drain from the state’s budget going forward, but it will be significant. We’ll have a better look when the comptroller releases his revised estimate in July.

You can watch the full Texas Tribune interview with Texas Comptroller Glenn Hegar here.

Teach the Vote’s Week in Review: Jan. 11, 2019

Happy New Year! Here’s your first weekly wrap-up of education news from the ATPE Governmental Relations team:


Tuesday, January 8, kicked off the 86th Texas Legislative Session amid great fanfare at the State Capitol.

Representative Dennis Bonnen (R-Angleton) was unanimously elected and sworn in as the new Speaker of the House on Tuesday afternoon. For the past 10 years, the House has been under the leadership of Rep. Joe Straus (R-San Antonio) who retired from the position and the legislature at the end of his term this month. Bonnen announced in November 2018 that he had amassed the requisite number of pledged votes to render the speaker’s race not much of a race at all. After that there was only the vote and ceremonial swearing in, which took place on Tuesday. Read more about Bonnen’s ascent to speaker in this post shared from The Texas Tribune.

On the Senate side, Lt. Gov. Dan Patrick (R) was missing from Tuesday’s proceedings while visiting with President Donald Trump in Washington, DC, that day on the subject of border security. Sen. Jane Nelson (R-Flower Mound) presided over the upper chamber’s opening ceremonies in his place. The Senate swore in its new members and also elected Sen. Kirk Watson (D-Austin) to serve as President Pro Tempore this session.

Gov. Greg Abbott spoke briefly to welcome the members of each chamber, signaling his intent for the legislature to tackle school finance reform and property tax relief this session. Bonnen and Watson also highlighted the prominence of the school funding issue this session, with new House Speaker going as far as announcing that he had stocked the members’ lounge with special styrofoam cups to remind them of their top priority: school finance reform. Improving the state’s school finance system is also a top legislative priority for ATPE this year.

ATPE Lobbyists Mark Wiggins and Monty Exter snapped a selfie with Humble ATPE’s Gayle Sampley and her husband at the Capitol on opening day.

ATPE’s lobbyists were at the Capitol on opening day and will be there for all of the action this legislative session. Be sure to follow @TeachtheVote and our individual lobbyists on Twitter for the latest updates from the Capitol.

ATPE members are also encouraged to sign up for free to attend our upcoming lobby day and political involvement training event known as ATPE at the Capitol on Feb. 24-25, 2019. Find complete details here.

 


While the legislative session officially began on Tuesday, Texas Comptroller Glenn Hegar made news the day before with his release of the state’s Biennial Revenue Estimate (BRE). The BRE details how much money the state plans to receive and how much of it can be spent in any given legislative session.

Monday’s BRE announcement predicted revenue of $119.12 billion for the 2020-21 biennium. This biennium’s BRE comes with tempered expectations, which Hegar attributed to a drop in oil prices, market volatility, and rising interest rates. “Looking ahead to the 2020-21 biennium, we remain cautiously optimistic but recognize we are unlikely to see continued revenue growth at the unusually strong rates we have seen in recent months.” Hegar said in the report.

Once the comptroller has released the BRE for each legislature, the Legislative Budget Board (LBB) meets to set the session’s constitutionally-required spending limit. ATPE Senior Lobbyist Monty Exter reports that the LBB met today and set a limit of $100.2 billion for spending this session. The constitutional spending limit is set by applying the percentage of growth, which is determined by many factors, to the previous biennium’s spending limit. The constitutional limit applies only to expenditures of general revenue that is not constitutionally-dedicated. By comparison, the non-dedicated-revenue spending limit for the 85th session in 2017 was roughly $91 billion, whereas the total general revenue appropriated by the legislature that year was $106.6 Billion. As Exter explains, neither withdrawals from the Economic Stabilization Fund (the state’s so-called “Rainy Day Fund”) nor supplemental appropriations for the current biennium will count toward the constitutional limit that was announced today.

The Legislature must now decide what to do with its available revenue. Rest assured, they haven’t been given a blank check to do as they please. According to reporting by the Center For Public Policy Priorities the legislature must immediately spend $563 million as back pay for Medicaid funding that was deferred until this session. The legislature will also have to determine where $2.7 billion for Hurricane Harvey recovery costs will come from.

For more detailed reporting on the BRE as well as link to the full report, check out this blog post by ATPE Lobbyist Mark Wiggins.

 


Late last week, the House Committee on Public Education released its interim report covering the committee’s work over the past year on interim charges assigned to it by the House Speaker. The report, which spans 88 pages, includes recommendations on how to approach a variety of education-related issues this session, such as Hurricane Harvey relief, teacher compensation, and school safety.

Rep. Dan Huberty (R-Kingwood) chairs the committee that produced its interim report. Among the suggestions were recommendations to consider possible legislation to help schools quickly replace instructional materials due to Harvey; creating paths to career growth for educators that would allow them to stay in the classroom, such as a “Master Teacher” certification; and making Individual Graduation Committees (IGCs) permanently available for students who have difficulty with STAAR testing.

You can read more about the committee’s interim charge recommendations in this blog post by ATPE Lobbyist Mark Wiggins. Read the interim report here.

 


In a statement released to the press on Monday, Governor Greg Abbott announced his appointment of Edward Hill, Jr., Ed.D., John P. Kelly, Ph.D., Courtney Boswell MacDonald, and Jose M. Rodriguez to the State Board for Educator Certification (SBEC). The new appointees are replacing retiring SBEC members Suzanne McCall of Lubbock; Dr. Susan Hull of Grand Prairie; and Leon Leal of Grapevine.

ATPE thanks the members rolling off the SBEC board for their years of service and welcomes the new members. We look forward to working together with them to continue to improve the education profession for the betterment of Texas students.

 


Comptroller announces $119.12B available for legislators to spend

Texas Comptroller Glenn Hegar announced Monday that the 86th Texas Legislature is forecast to have $119.12 billion available for general-purpose spending when the regular session begins tomorrow, Jan. 8, 2019.

Click the image to view a larger version. Credit: Office of Texas Comptroller Glenn Hegar

The announcement came today as part of the comptroller’s biennial revenue estimate, which is delivered to legislators before each session begins and consists of a forecast of how much revenue the state expects to receive and how much of it can be spent.

The state is projected to take in $107.32 billion in general revenue-related tax collections in the 2020-2021 fiscal biennium, which is up from $99.27 billion collected in 2018-2019. The next biennium begins with a balance of $4.18 billion carried over from 2018-2019, along with $14.16 billion in additional general revenue-related collections. A total of $6.34 billion of available revenue is reserved for transfers to the economic stabilization fund (ESF), also known more commonly as the state’s “rainy day fund,” as well as highway funds.

Legislators began 2017 with a $104.9 billion BRE, and the 85th Texas Legislature ultimately passed a $107.2 billion budget. The 2018-2019 revenue estimate was revised upward several times as economic conditions improved. In the 2020-2021 revenue estimate, Hegar noted increased economic growth in 2018 fueled by oil production in the Permian Basin, but urged caution looking beyond the 2019 horizon.

“Looking ahead to the 2020-21 biennium, we remain cautiously optimistic but recognize we are unlikely to see continued revenue growth at the unusually strong rates we have seen in recent months,” Hegar wrote in the official report. “Oil prices have dropped sharply since October, financial markets have demonstrated increased volatility, interest rates have been rising and U.S. trade policy remains uncertain. As the nation’s leading export state, the Texas economy in particular is exposed to potential reductions in international trade.”

“Because of this heightened uncertainty, this revenue estimate is based on a projection of continued but slowing expansion of the Texas economy,” Hegar concluded.

Much of the $119.12 billion legislators will be have for budgeting the next two years is already spoken for. The Center for Public Policy Priorities (CPPP) correctly points out in its BRE analysis that legislators will have to immediately make a $563 million back payment to Medicaid, funding that was deferred last session in order to fund public education.

CPPP predicts it will cost roughly $112 million for the state to maintain the current level of services, based upon factors including inflation and school enrollment growth. Legislators will also have to decide where to find $2.7 billion of supplemental funding for Hurricane Harvey recovery costs. That could come out of general revenue or the rainy day fund.

You can read the comptroller’s full report here.