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86th Legislative Session Highlights from ATPE

As the 86th Texas Legislature began its regular session in January 2019, it was dubbed the “session of the teacher” and was marked by abounding promises to fix school finance and provide pay raises to the most important in-school factor contributing to student success: our teachers. Indeed, this session’s legislation included several pro-public education proposals such as a multi-billion dollar school finance and property tax reform bill, efforts to provide an across-the-board teacher pay raise, school safety enhancements, and measures to shore up the Teacher Retirement System (TRS), while mostly avoiding troublesome and divisive topics such as payroll deduction and tactics to privatize education.

However, bills rarely reach the finish line in the same form as they started, while most others don’t make it at all. In fact, there were more than 10,000 bills and resolutions filed this session, but only 1,429 House and Senate bills were finally passed. As a reminder, bills that do finally pass the legislature are still subject to review by the governor. Gov. Greg Abbott vetoed three bills that were on ATPE’s tracking list. The governor vetoed House Bill (HB) 109 by Rep. Armando Martinez (D-Weslaco), which would have required charter schools to give students Memorial Day off as school districts are currently required to do, yet the bill exempted districts of innovation (DOI). Gov. Abbott explained in his veto statement that the bill would have exempted up to 859 school districts, and suggested the legislature draft more targeted legislation in the future. The governor vetoed HB 455 by Rep. Alma Allen (D-Houston), which would have required the Texas Education Agency (TEA) to develop a model policy on recess that encourages age-appropriate outdoor physical activities. Despite praising the bill’s good intentions, the governor called HB 455 “bureaucracy for bureaucracy’s sake.” Gov. Abbott also vetoed HB 3511 by Rep. Gary VanDeaver (R-New Boston), which would have created a “Commission on Texas Workforce of the Future.” The governor called the bill redundant and duplicative of work being done by the Tri-Agency Workforce Initiative, which involves the Texas Workforce Commission, TEA, and the Texas Higher Education Coordinating Board (THECB). 

To learn how education issues fared during the 2019 session that ended on Memorial Day, ATPE offers this comprehensive summary prepared by our lobbyists: Jennifer Mitchell, Monty Exter, Mark Wiggins, and Andrea Chevalier. You’ll also find within this post an update on the actions taken by the 86th Texas Legislature on ATPE’s legislative priorities for 2019.

Here’s a list of the topics covered in this post:


School Finance:

ATPE’s top legislative priority this year was improving Texas’s school finance system, and more specifically, supporting legislation to dramatically improve that system in order to provide every child access to an exemplary public education.

Gov. Greg Abbott (R) declared school finance reform to be one of his top priorities and an emergency item for early consideration by the 86th Legislature. Newly elected House Speaker Rep. Dennis Bonnen (R-Angleton) did his part to keep school funding on the minds of state representatives by providing them with cups reading, “School Finance Reform – The Time is Now.” While a handful of school finance bills were filed this session, House Bill (HB) 3 by Rep. Dan Huberty (R-Kingwood) quickly became the session’s signature piece of legislation. HB 3 was a culmination of selected recommendations from last year’s Commission on Public School Finance that was created by the 85th legislature, as well as other input from education stakeholders such as ATPE.

ATPE supported the version of HB 3 that was approved by a vote of 148-1 in the House chamber. The House-approved bill called for providing billions of dollars to public schools; included important programmatic changes such as full-day pre-K and dyslexia and dual language funding; and it increased the basic allotment. Importantly, the bill as it left the House did not include merit pay provisions ranking teachers competitively or basing their compensation on their students’ performance; nor did the bill tie district funding to the results of student assessments like the STAAR. The Senate sponsor of HB 3, Sen. Larry Taylor (R-Friendswood), pushed forward a revised version of the bill in the upper chamber, which was approved by the Senate on a vote of 26-3 with two senators “present not voting.” As an updated version of the bill progressed through the Senate and ultimately reached a conference committee, ATPE continued to work to keep merit pay and other negative provisions out of the final bill.

State leaders announced on May 23, 2019, that a deal on HB 3 and other key legislation had been reached. Known as the Texas Plan, the final version of HB 3 as passed by the House and Senate now awaits the Governor’s signature as of our writing of this report. It is important to note that the final bill includes approximately $5.2 billion for property tax compression in addition to the $6.2 billion for school resources, and it reduces school districts’ vulnerability to recapture.

In its final form, HB 3 also makes a number of education policy changes that fall outside the scope of traditional school finance legislation, addressing such topics as the creation of a “do not hire” registry for educators who have been accused of misconduct and requiring teachers to demonstrate proficiency in the science of teaching reading. Fortunately, HB 3 as finally passed does not rank educators across or within districts and expressly prohibits compensation being tied to testing in local teacher designation systems. The bill also does not tie school funding to students’ third grade reading scores.

Read more about the major changes to school finance and education policy that are contained in HB 3 in this detailed ATPE blog post about the omnibus bill here on Teach the Vote.

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Educator Pay: 

Increasing educator compensation through plans that foster both retention and a robust workforce at every Texas public school was another ATPE legislative priority this session. We advocated for compensation plans that would allow for local flexibility, encourage educator input, involve factors more meaningful than students’ standardized test scores, and align with other efforts to promote and enhance the education profession.

Leading up to the November 2018 Texas elections and heading into this year’s legislative session, Lt Gov. Dan Patrick (R) made teacher pay a central tenet of his communications. During campaign messaging, he first promised educators a $10,000 pay raise before ultimately scaling back his plan to the $5,000 pay raise encapsulated in Senate Bill (SB) 3 by Sen. Jane Nelson (R-Flower Mound).

SB 3’s first high-profile hearing by the Senate Finance Committee coincided with the timing of ATPE at the Capitol, our lobby day event held every legislative session, and several ATPE members testified at the hearing. The Senate quickly passed the more than $4 billion bill out of the upper chamber within the first 60 days of session, after Gov. Abbott declared teacher pay to be another emergency item this year. SB 3 as passed by the Senate called for across-the-board pay raises for classroom teachers and librarians.

However, SB 3 stalled in the House as the lower chamber grappled with its larger school finance bill, HB 3. For its part, House members proposed smaller, state-funded, across-the-board pay raises at the district level that would cover all public school employees except administrators in their version of HB 3. Later in the session. SB 3-style pay raise language momentarily regained life in the Senate’s version of HB 3, but did not make it into the final version of the school finance bill. Ultimately, the combination of legislators opposed to across-the-board raises and the prioritization of property tax compression by state leaders, including Lt. Gov. Patrick, doomed the proposal for a $5,000 across-the-board teacher pay raise.

While it does not guarantee an across-the-board, state-mandated pay raise, the final compromise version of HB 3 does contain two significant provisions on educator compensation. The first requires districts to spend 30 percent of the new revenue they receive under HB 3 on compensation. Seventy-five percent of that portion must be spent on teachers, counselors, librarians, and nurses; with a prioritization of spending the money to increase compensation for classroom teachers with more than five years of experience. Districts are not required to give to every employee within this category an increase. The remaining 25 percent of the compensation carve-out may be spent on compensating other full-time staff who are not administrators. Additionally, districts likely can choose to spend these dollars on benefits such as insurance premiums in lieu of salary hikes.

HB 3 also allows districts to assign their teachers performance designations and draw down additional state funding for compensation based on the combination of a teacher’s designation and the student demographics of the campus in which they teach. The additional funding ranges from $3,000 to $32,000, depending on a teacher’s designation and other factors, but the total amount of money budgeted by the state for this program is only $140 million for the biennium, meaning that it may end up being limited to only a handful of districts. Based on the wording of HB 3, state funding under this program will flow to the districts rather than directly the individual teachers who may earn the designations, allowing districts substantial discretion in how they spend the additional money.

For more information on the compensation provisions found in HB 3 as finally passed, view our blog post about the bill’s details here on Teach the Vote.

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Teacher Retirement System (TRS):

ATPE had two legislative priorities for this session that were connected to the Teacher Retirement System (TRS). Our first priority was preserving educators’ pension benefits, which have remained largely stagnant for several years as a result of the legislature’s failure to inject more money into the system. This year, ATPE actively supported legislative efforts to preserve both the solvency and the defined-benefit structure of the TRS pension program. We also teamed up with Equable, a national nonprofit organization that advocates for pension plan sustainability, to jointly promote legislation that would address the TRS funding shortfall.

ATPE’s other TRS-related legislative priority was funding educators’ healthcare needs. We aimed to help the state and school districts provide active and retired public educators with more affordable and accessible healthcare benefits. With healthcare costs on the rise nationally, active and retired educators alike have seen their medical costs eat up an increasingly larger percentage of their take home pay or TRS annuities.

Retired teachers can rest a little easier knowing that the passage of Sen. Joan Huffman’s (R-Houston) SB 12 (pending the Governor’s signature, of course) will provide a much needed increase in contributions to TRS, making the fund actuarially sound and ensuring that the primary retirement income for many Texas educators will be viable for decades to come. Read more on the details of changes made to TRS, including the provision of a 13th check for current retirees, in this ATPE blog post for Teach the Vote.

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School Safety and Student Health: 

One of the most sweeping bills the legislature passed this session was SB 11 by Sen. Larry Taylor (R-Friendswood), which was aimed at improving school safety in the aftermath of the 2018 deadly school shooting in Santa Fe, Texas. School safety and mental health were among the issues that Gov. Abbott declared as emergency items for the 86th legislative session, following round-table discussions his office held with stakeholders, including ATPE state officers, during the interim.

Although SB 11 and a related mental health bill, SB 10, took a meandering path through the session, legislators ultimately placed a specific focus on improving students’ mental health and assigning specialized teams at each campus to identify individuals who may pose a threat to themselves or others. The bill’s largest component sends $100 million to school districts over the next two years through a school safety allotment for use on facilities and security programs. Read the rest of what SB 11 does in this ATPE blog post for Teach the Vote.

Other school safety-related bills that were passed this session include HB 1387 by Rep. Cole Hefner (R-Mt. Pleasant), which removes caps on the number of school marshals who can serve a public or private school, and HB 2195 by Rep. Morgan Meyer (R-Dallas), which requires that a school district’s multihazard emergency operations plan include a policy on responding to an active shooter situation. Freshman Sen. Beverly Powell (D-Ft. Worth) also passed a bill that pertains to the information law enforcement officials are required to share with school districts when a student is arrested. Her SB 2135 helps superintendents and school boards work together with law enforcement  agencies to exchange information that can be used to conduct a threat assessment or prepare a safety plan related to a student who may pose a threat.

Another noteworthy bill that passed this session and could be directly attributed as a reaction to recent school shootings was HB 496 by Rep. Barbara Gervin-Hawkins (D-San Antonio). It sets forth protocols for the provision and use of bleeding kits in public schools, as well as training of students and staff to respond to traumatic injuries.

A couple of education-related bills were passed this session that aim to prevent or respond to the growing problem of child sex trafficking. HB 111 by Rep. Mary Gonzalez (D-Clint), calls for school district employees’ training to include recognizing the signs of sexual abuse and sex trafficking of children with significant cognitive disabilities. HB 403 by Rep. Senfronia Thompson (D-Houston) similarly requires superintendents and school board trustees to undergo training in identifying and reporting sexual abuse, human trafficking, and other maltreatment of children.

Lawmakers also approved bills this session that address students’ mental health, HB 18 by Rep. Four Price (R-Amarillo) is a bill that grew out of interim recommendations and strives to help school employees be aware of and provide interventions for students with mental health challenges, substance abuse, or a history of trauma. HB 19, also by Rep. Price, requires mental health professionals in each Education Service Center (ESC) region to provide training and resources to help address public school students’ mental health. Additionally, Rep. Todd Hunter’s (R-Corpus Christi) HCR 137 designates the month of September as Suicide Prevention Month for the next 10 years. Also, SB 435 by Sen. Jane Nelson (R-Flower Mound) requires local school health advisory councils to recommend appropriate opioid addiction and abuse curriculum that can be used by the school district.

Finally, there are some student health-related bills that passed and are worth mentioning. This session Rep. Dan Huberty (R-Kingwood) finally passed HB 76, a bill he has carried for several sessions aimed at providing student athletes access to cardiac assessments before they participate in certain activities sponsored by the University Interscholastic League (UIL). Rep. Travis Clardy (R-Nacogdoches) also passed HB 684 enabling school nurses and other trained public school employees to provide assistance to students with seizure disorders. Likewise, HB 2243 filed by physician and Rep. Tom Oliverson (R-Houston) aims to help school nurses administer asthma medication to certain students. SB 869 by Sen. Judith Zaffirini (D-Laredo) calls for an ad hoc committee to consult with the commissioner of education on updating guidelines for the care of students with food allergies who are at risk for anaphylaxis.

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Student Testing:

A handful of bills pertaining to student testing are on their way to the governor’s desk as of our writing of this report. Sen. Kel Seliger’s (R-Amarillo) bill to continue Individual Graduation Committees (IGCs), SB 213, has already been signed into law by Gov. Abbott. The ATPE-supported bill originally aimed to make the IGC law permanent, but its final version simply extends the sunset date for the law to September 1, 2023, making it ripe for consideration again during the 2021 or 2023 legislative session.

The largest testing bill that passed this session is HB 3906 by Rep. Dan Huberty (R-Kingwood), which makes a variety of changes to how state assessments are administered and the content of the tests. Additionally, HB 1244 by Rep. Trent Ashby (R-Lufkin) changes the end-of-course exam for U.S. History to include 10 questions from the civics test used in the naturalization process; and HB 1891 by Rep. Lynn Stucky (R-Denton) will allow those who reach a required score on high school equivalency exams to be exempt from taking the Texas Success Initiative assessment.

Read more about these bills and others pertaining to testing in this ATPE blog post for Teach the Vote.

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Special Education:

During the interim, special education advocates worked diligently on the state’s Special Education Strategic Plan and Corrective Action Response, which was ordered by the U.S. Department of Education (ED) due to Texas’s artificial 8.5% cap on special education enrollment. Advocates also worked with the Texas Commission on Public School Finance last year, carrying legislators into the session with renewed energy for special education reforms.

To invigorate everyone even more, news broke just before session that our state faced penalties from ED due to the Texas Education Agency’s failure to maintain “state financial support” under the Individuals with Disabilities Education Act (IDEA). Essentially, the state spent $33.3 million less on special education in 2012 than in the year before, and thus, Texas was being assessed a $33.3 million financial penalty by ED. Unfortunately, the state has continued this trend, and it is now estimated that the federal penalty will reach $233 million.

Legislation passed this session hopes to address this issue going forward. The funding changes in the major school finance bill, HB 3, and under the state’s supplemental appropriations bill, SB 500 by Sen. Jane Nelson (R-Flower Mound), should help address Texas’s issue with maintenance of financial support. HB 3 raises the mainstream weight from 1.1 to 1.15; creates a new dyslexia weight of 0.1; and establishes a special education allotment advisory committee. SB 500, the supplemental budget, includes over $219 million to settle maintenance of financial support costs and prevent future penalties.

Other bills will impact special education beyond funding, such as HB 165 by Rep. Diego Bernal (D-San Antonio), which will allow students in special education programs to earn high school endorsements on their transcripts, and SB 139 by Sen. Jose Rodriguez (D-El Paso), which will provide parents with clearer notice on special education rights, including information related to evaluation and eligibility. Additionally, SB 522 by Sen. Judith Zaffirini (D-Laredo) improves the development of individualized education programs (IEPs) for students who are visually impaired, and SB 2075 by Sen. Angela Paxton (R-McKinney) aims to improve school districts’ compliance with dyslexia screening and parental notification.

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Payroll Deduction:

Protecting educators’ right to use payroll deduction for the voluntary payment of their professional association dues was another ATPE priority for 2019. In 2017, ATPE and other groups that represent public employees fought off vigorous, politically motivated efforts to repeal the payroll deduction statute, with the issue being named a top priority of Lt. Gov. Dan Patrick and even being added to Gov. Greg Abbott’s list of urgent issues that he felt necessitated a special session that summer. Those efforts failed last session, and ATPE was prepared to fight any similar legislative efforts this session.

Despite frequent pleas from far-right groups like Empower Texans and the Texas Public Policy Foundation to compel the 86th Texas Legislature to do something about the “union dues” issue, ATPE is pleased to report that not a single bill was filed this year aiming to eliminate payroll deduction for educators. There were some efforts in the final days of the session to try to amend language onto other bills that could prevent public employees from using payroll deduction, but those efforts failed.

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Class Sizes:

Early in the session, the House Public Education Committee heard HB 1133 by Rep. Jonathan Stickland (R-Bedford). This bill would have changed the current hard cap of 22 students in a single elementary grade classroom to a campus-wide, grade-level average, having the effect of allowing class sizes to dramatically expand. ATPE strongly opposed this bill, but it was unfortunately voted favorably out of the committee. After weeks of inaction on the bill, the language from HB 1133 was abruptly amended as a House floor amendment onto one of Rep. Huberty’s school accountability bills, HB 3904. The next day, this language was stripped from HB 3904 following a third-reading amendment by Rep. Chris Turner (D-Grand Prairie). What followed was quite extraordinary. Within hours, HB 1133 was added to a floor calendar and set to be voted on by the full House. Rep. Stickland postponed a vote on the bill three times, and when he finally allowed for a vote, the House defeated HB 1133 by a vote of 44 yeas and 97 nays. For more about the debate and to find out how your legislator voted on HB 1133, check out our coverage here on the Teach the Vote blog. ATPE thanks those who called their legislators and helped us oppose this bill in order to protect class-size limits, which are part of ATPE’s member-adopted legislative program.

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Private School Vouchers:

ATPE’s final legislative priority for the 86th legislative session was opposing the privatization of public schools through programs such as vouchers, scholarships, tax credits, education savings accounts, or allowing private entities to take over the authority and accountability vested in locally elected school boards. During the 2017 legislative sessions, private school vouchers were a top priority for Lt. Gov. Dan Patrick, and voucher legislation easily passed the Texas Senate only to be stalled in the House. The House members’ unambiguous opposition to vouchers last session, combined with the strong statement made in 2018 by educators showing up in higher numbers at the polls, dissuaded lawmakers and even state leaders from pushing a voucher priority this year. ATPE is happy to report that no major private school voucher bills like the ones filed last session were heard in committee this time around.

There were a handful of bills considered this session that ATPE and others deemed to be virtual voucher bills. The primary bill in this group was SB 1455 by Sen. Larry Taylor (R-Friendswood). SB 1455 would have eliminated statutory limitations on a student’s ability to demand access to more than three virtual school courses in a semester. The bill also called for expanding the number of full-time virtual school programs and access to those programs for students in grades K-2. Virtual school programs while accessed through a school district or charter school are operated almost exclusively by private, often for-profit, providers. Research has consistently shown that such full-time programs do a poor job of educating students compared to traditional brick-and-mortar schools, but they are a source of large profits for the providers at the expense of taxpayers. Other similar bills were filed this session by Sens. Donna Campbell (R-New Braunfels) and Bob Hall (R-Edgewood). Thankfully, all of these ATPE-opposed virtual school expansion bills failed to make it out of the House Public Education Committee this session.

Although not technically a “voucher” bill, ATPE believes it is worth mentioning this session’s version of the so-called “Tim Tebow” bill. Session after session, lawmakers have filed bills named in honor of the famous athlete who was home-schooled. The bills attempt to force public schools to allow home-schooled students to participate in their activities through the University Interscholastic League (UIL). The latest iteration was HB 1324 by Rep. James Frank (R-Wichita Falls), which ATPE opposed based on our member-adopted legislative program. During its hearing by the House Public Education Committee, ATPE submitted written testimony against HB 1324, expressing our concern that there was no assurance under the bill that home-schooled students would be required to meet the same prerequisites for UIL participation as public school students. The bill was expected to be brought up for a committee vote a couple weeks later, but was left off of the vote list, likely in response to growing opposition to HB 1324. ATPE appreciates the members, educators, parents, coaches, and other stakeholders who called their legislators to oppose this bill.

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Charter Schools:

In the previous regular legislative session of 2017, charter schools walked away with $60 million in first-time state facilities funding and the ability to operate school district campuses and receive financial benefits through “1882 partnerships,” a reference to the enabling legislation, SB 1882 (2017). While charter school legislation did not take center stage this session, several bills affecting charter schools are headed to the governor’s desk.

Some bills that passed this session have the effect of treating charters in the same manner as traditional public schools. HB 109 by Rep. Armando Martinez (D-Weslaco) prohibits charters from operating on Memorial Day; HB 2190 by Rep. Todd Hunter (R-Corpus Christi) allows children of charter school employees to attend their parents’ school; and SB 372 by Sen. Donna Campbell (R-New Braunfels) allows charter governing bodies to employ security personnel, commission peace officers, and enter into agreements with law enforcement to assign school resource officers. Additionally, SB 2293 by Sen. Pat Fallon (R-Prosper) subjects charter school employees to the same collective bargaining and anti-striking laws as all other public school employees. SB 2293 also creates a common application for charter school admission and a requirement that the Texas Education Agency (TEA) maintain and report on the nebulous “charter waiting list” often cited by charter school proponents as justification for their further expansion.

While the above-referenced bills do bring some parity between charters and traditional public schools, ATPE also supported several bills this session that would have had an even greater impact but did not pass. For instance, HB 43 by Rep. Gina Hinojosa (D-Austin) would have prohibited charters from using exclusionary admission policies based on students’ discipline history, and HB 1853 by Rep. Leo Pacheco (D-San Antonio) would have required charter schools to employ certified teachers.

Other bills that passed this session will impact charter school finance and expansion. The previously discussed omnibus school finance bill, HB 3, affects charter school funding, including requiring charters to pay their fair share into TRS and removing the charter benefit of the small and midsize adjustment. SB 668, a mandate relief bill by Sen. Bryan Hughes (R-Mineola), allows charters to submit an expansion approval request up to 18 months before expanding and requires that charters notify school superintendents affected by the expansion. Unfortunately, this is a pared-down version of stricter notification requirements that were included in the bill as it left the House. Other related bills that passed include HB 4258 by Rep. Jim Murphy (R-Houston), which provides the attorney general with the sole authority to approve the tax-exempt status of charter school bonds, nixing the authority of municipalities. Lawmakers also approved SB 2117 by Sen. Paul Bettencourt (R-Houston), which provides the financial benefits of 1882 partnerships to previously established partnerships in Spring Branch ISD and Aldine ISD that were formed prior to the final implementation of SB 1882. Lastly, SB 1454 by Sen. Larry Taylor (R-Friendswood) improves the transparency of the sale, lease, and disposition of closed charter schools and their assets.

A couple of other charter-related bills passed the legislature, including HB 4205 by Rep. Tom Craddick (R-Midland), which allows for large charter operators to repurpose a closed public school district campus with the requirement that the same students who were at the campus before it was closed be admitted. Finally, HB 1051 by Rep. Gary VanDeaver (R-New Boston) makes permanent the Goodwill Excel Center, an adult high school diploma and industry certification charter school pilot program, and codifies its best practices.

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Student Discipline:

Legislators also passed several bills related to student discipline this session. HB 3630 by Rep. Morgan Meyer (R-Dallas) and SB 712 by Sen. Eddie Lucio, Jr. (D-Brownsville) are identical bills prohibiting the use of “aversive techniques,” which are described as techniques or interventions intended to inflict pain or emotional discomfort. This includes sprays, electric shocks, using a device to restrain all four extremities, and denial of the ability to use the restroom. Teacher organizations worked with the bill authors to ensure that this legislation would not prevent an educator from using a technique outlined in a student’s behavioral intervention plan (BIP) or from removing a student from class when necessary.

Regarding the removal of students, SB 2432 by Sen. Larry Taylor (R-Friendswood) adds criminal harassment against a district employee to the list of conduct that will result in a student’s automatic removal from a classroom. This would mandate that a student who threatens a teacher or sends them harassing electronic communications is immediately removed from class. Another bill also by Sen. Taylor, SB 1451, states that negative action may not be taken against an educator solely on the basis that the teacher made disciplinary referrals or documented student misconduct. ATPE supported these bills.

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School Turnaround:

Lawmakers spent considerable time this session discussing ways to improve student performance at public schools that are struggling under the state’s accountability system. Finding a programmatic “fix” that will dramatically improve performance in a reasonably short period of time, and in particular, one that is capable of being replicated, has long been an elusive goal of state and local policymakers and many education reformers. The latest attempt is called the “Accelerated Campus Excellence” (ACE) approach. The program, which began in Dallas ISD and has spread to a handful of other districts mostly in the DFW metroplex, has shown some promise and caught the attention of lawmakers when it was discussed during interim hearings of the Texas Commission on Public School Finance last year.

In a nutshell, ACE consists of a robust set of wraparound services for students at a persistently struggling campus, along with salary incentives and additional training for the teachers at the campus. The program utilizes a campus reconstitution approach, where a principal, often new to the campus, assembles a team of educators, some of whom are already teaching at the campus but many of whom are new. Many aspects of ACE mirror initiatives that ATPE has long advocated, such as using financial incentives to entice high-quality, often more experienced, educators to work at hard-to-staff campuses; offering robust mentoring and professional development; and providing students with robust wraparound supports. Unfortunately, the high cost of both the educator stipends and the wraparound services has made the longer-term sustainability of an ACE program questionable.

Several bills this session included provisions that would add ACE program language to state law, including both the House and Senate versions of HB 3. Regrettably, most of the provisions included in such bills featured heavy reliance on students’ standardized test performance data, including the use of STAAR data, to select educators for ACE campuses; provisions that rank teachers competitively by district or statewide, again based largely on student performance; and giving the appointed commissioner of education extreme control over the programs and their approval.

Ultimately, the ACE provisions were removed from HB 3, the omnibus school finance bill. However, the legislature did also pass HB 4205 by Rep. Tom Craddick (R-Midland) which had been amended with language from another stand-alone ACE bill, SB 1412 by Sen. Charles Perry (R-Lubbock). HB 4205 as finally passed contains a watered down and unfunded provision that allows districts, subject to commissioner approval, to use a version of ACE as a turnaround plan for a multi-year IR campus under Section 39.105 of the Texas Education Code.

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Political Speech:

In addition to advancing pro-public education legislation, ATPE worked to stop proposals this session that would have hindered the ability of our schools, teachers, and students to receive the best education possible. Specifically, ATPE worked to block SB 1569 by Sen. Pat Fallon (R-Prosper) and SB 904 by Sen. Bryan Hughes (R-Mineola). These bills would have had the combined effect of subjecting educators to extensive restrictions on political speech that go far beyond those that apply to any other group of public employees. Under these bills, teachers would have faced criminal penalties for all kinds of innocuous activities, including break room conversations of a political nature and teaching students about civic engagement as required by the Texas curriculum standards. Neither bill made it all the way through the legislative process.

ATPE also opposed SB 9, another controversial bill by Sen. Hughes that would have significantly increased the criminal penalties for mistakes made by voters, decreased voter privacy, and made voter registration more difficult. The Senate passed SB 9 on a party line vote, but the measure stalled in the House late in the session where it could not make it onto a calendar for floor consideration.

Another pair of bills that were of concern to some education groups were SB 29 by Sen. Bob Hall (R-Edgewood) and HB 281 by Rep. Mayes Middleton (R-Wallisville), aimed at preventing public entities from hiring lobbyists or paying dues to associations that lobby the legislature. While it is difficult to speculate what impact those bills might have had on groups like ATPE that do not receive their dues dollars from public entities, there is no question that weakening the ability of local schools to communicate their needs to the legislature was one of the authors’ goals. Fortunately, a deluge of messages from public education supporters all over Texas helped convince legislators to reject the bill in a major late-session vote on the House floor on May 20.

It is widely believed that these bills were filed in response to pressure from certain anti-public education groups reacting to the overwhelming pro-public education sentiment expressed by many voters in the most recent elections. Some of these bills came perilously close to becoming law, and ongoing advocacy by educators during the legislative session was among the key determining factors in preventing them from making it to the governor’s desk.

Indeed, if there is a single takeaway for the education community following the 2019 legislative session, it is reinforcement of the fact that political participation by educators is essential for the defeat of anti-public education bills. Stated differently, the engagement of educators in every election cycle and through grassroots communications with their elected officials, especially during a legislative session, is what produces successful outcomes for public education. ATPE thanks all those who helped prioritize the needs of public schools, educators, and most importantly, students during this 86th legislative session.

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Senate Education Committee winds up last hearing

The Senate Education Committee met late Friday afternoon to consider another round of bills sent over from the House. The meeting was not posted in advance, with Chairman Larry Taylor (R-Friendswood) instead announcing the meeting an hour and a half ahead of time from the Senate floor. Sen. Taylor said Friday would be the committee’s last meeting. The committee heard testimony on the following bills:

  • HB 637, which would eliminate a law that ties the salaries of the superintendents of the Texas School for the Blind and Visually Impaired and the Texas School for the Deaf to other administrators at their own schools. The salary is currently limited to 120 percent of the annual salary of the highest paid instructional administrator at the school. Sen. Kirk Watson (D-Austin) explained that this created a problem when the top staffer departed one of these schools and the superintendent’s salary dropped ten percent as a result. Sen. Watson further explained that the salary would be capped in the budget instead.
  • HB 808, which would require reporting demographic and academic data in districts with more than 1,000 African-American males. Sen. Borris Miles (D-Houston) explained that this is intended to study and address academic performance within this demographic group.
  • HB 1387, which would eliminate the cap on school marshals. The current cap is one marshal per 200 students. This bill drew numerous witnesses to testify in opposition, despite the late posting.
  • HB 2195, which would require an active shooter emergency policy to be included in a school district’s multi-hazard emergency operations plan.
  • HB 2526, which is aimed at eliminating a problem arising when a boundary between two school districts passes through a single homestead, causing the owner to pay taxes to both districts.
  • HB 4270, which would allow a municipal management district to provide funding for improvement projects for public education facilities as part of the long list of improvement projects or services they can provide.

The committee voted to advance HB 637, with Sens. Paul Bettencourt (R-Houston) and Bob Hall (R-Edgewood) voting no; HB 808, with Sens. Bettencourt, Donna Campbell (R-New Braunfels), and Hall voting no; HB 1387, with Sens. Eddie Lucio (D-Brownsville), Beverly Powell (D-Burleson), Watson, and Royce West (D-Austin) voting no; HB 2195; and HB 2526.

From The Texas Tribune: Texas Senate approves school finance reform bill, but opts not to fund it with a sales tax hike

Lt. Gov. Dan Patrick speaks from the dais in the Senate chamber last month. Photo by Juan Figueroa/The Texas Tribune

Texas Senate approves school finance reform bill, but opts not to fund it with a sales tax hike” was first published by The Texas Tribune, a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.

The Texas Senate on Monday approved a bill to massively overhaul public school finance, but did so while backing away from a proposal to use an increased sales tax to lower school district property taxes.

After an hours-long debate on dozens of proposed changes, the Senate voted 26-2 on House Bill 3, which under the version passed by the upper chamber would increase student funding, give teachers and librarians a $5,000 pay raise, fund full-day pre-K for low-income students, and lower tax bills.

The House and Senate will have to negotiate their significant differences over the bill — including how to offer teacher pay raises and property tax relief — in a conference committee before it can be signed into law.

“When you’re doing something as complex as this, there’s going to be something you don’t like,” said state Sen. Larry Taylor, R-Friendswood, the bill’s author, anticipating tension throughout the day’s debate.

Since school districts levy the majority of property taxes in Texas, many lawmakers have been seeking ways to help reduce those portions of Texans’ tax bills. But since the state is required to ensure school districts have enough money to educate students, any tax relief effort would have a significant cost — requiring the state to reimburse schools, if they’re unable to collect enough from local property taxes.

Taylor had originally included several provisions that would provide ongoing tax relief, paid for by an increase in the sales tax by one percentage point.

Republican leaders, including Gov. Greg Abbott, had thrown their support behind that sales tax swap, arguing it would help Texans who are currently being taxed out of their homes. But the proposal has serious detractors in lawmakers from both parties in both chambers who are opposed to a higher sales tax.

So Taylor stripped the increase from HB 3 and offloaded some of the more expensive property tax relief provisions in the bill. The bill no longer includes an expansion in the homestead exemption from school district taxes. It lowers property tax rates by 10 cents per $100 valuation, instead of 15 cents, saving the owner of a $250,000 home $250 instead of $375.

The legislation would still limit the growth in school districts’ revenue due to rising property values, a proposal pitched before session began by the governor. School districts that see their property values significantly increase would have their tax rates automatically reduced to keep tax revenue growth in line. That would now start next year, instead of in 2023.

“The bill before us today has no linkage to the sales tax and is not contingent upon a sales tax,” Taylor said.

Instead, the bill creates a separate “Tax Reduction and Excellence in Education Fund” to fund school district tax relief. State Sen. Kirk Watson, D-Austin, said a working group came up with a plan to get $3 billion from several sources, including the severance tax on oil and gas extraction and an online sales tax.

“This does not increase any taxes of any kind,” he said.

A few senators didn’t vote yes on HB 3 because they didn’t know the cost of the bill or how their school districts would be affected by it.

“The lack of a fiscal note delineating the total cost of the bill was unacceptable,” said state Sen. Charles Schwertner, R-Georgetown, who voted against the bill along with state Sen. Brandon Creighton, R-Conroe.

Creighton echoed those concerns about not knowing the legislation’s price tag, though he said he agreed with its policy.

“Before the session ends, I will have another chance to vote on the final bill, and I look forward to supporting it once I have a clear understanding of the impacts on school districts in Senate District 4, and the true cost of the legislation, which will have implications for all Texas taxpayers,” he said in a statement after the vote.

State Sens. Angela Paxton, R-McKinney, Paul Bettencourt, R-Houston, and Bob Hall, R-Edgewood, marked themselves “present, not voting.”

The House and Senate have passed versions of HB 3 that are similar in some ways: Both would raise the base funding per student — a number that hasn’t budged in four years — and would provide about $780 million for free, full-day pre-K for eligible students.

Among the disagreements: how to make sure school employees get much-needed raises. The Senate has prioritized $5,000 pay raises for all full-time teachers and librarians. The House has directed districts to give all school employees about $1,388 in raises on average statewide and designated extra money for raises to be given at districts’ discretion.

Senate Democrats’ efforts to extend those $5,000 raises to full-time counselors and other employees failed along party lines Monday.

Also controversially for some, the Senate includes money providing bonuses to schools based on third-grade test scores and funding districts that want to provide merit pay for their top-rated teachers. Many teacher groups have opposed both, arguing it would put more emphasis on a flawed state standardized test.

State Sen. Beverly Powell, D-Burleson, failed to get an amendment to the bill approved that would strike tying any funding to third-grade test scores.

Teachers, parents and advocates following on social media had paid attention to Powell’s amendment, mobilizing in support through a Twitter hashtag “#NoSTAARonHB3.”

Taylor pointed out that the bill also allows school districts to use assessments other than the state’s STAAR standardized test, which has lately come under renewed scrutiny, with researchers and advocates arguing it doesn’t adequately measure students’ reading abilities. He approved an amendment requiring the state to pay for school districts to use those alternative tests, which he estimated would cost about $4 million.

Emma Platoff contributed to this story.

This article originally appeared in The Texas Tribune at https://www.texastribune.org/2019/05/06/texas-senate-school-finance-sales-tax/.

 

Texas Tribune mission statement

The Texas Tribune is a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.

Texans in Congress cosponsor federal bill to double teachers’ tax deduction

There is good news to report from the nation’s capital, as some members of Congress are looking to double a popular tax deduction that benefits educators. H.R. 878, the Educators Expense Deduction Modernization Act, was filed by Democratic Congressman Anthony Brown of Maryland and has garnered support from some members of the Texas delegation.

The bill as filed would allow teachers to deduct up to $500 from their federal taxes (instead of $250 under current law) for any classroom supplies that they purchase. The permanent tax deduction also would be adjusted for inflation.

The following Texans have signed on as cosponsors of H.R. 878:

  • Rep. Sheila Jackson Lee (D-TX-018)
  • Rep. Eddie Johnson (D-TX-030)
  • Rep. Filemon Vela, Jr. (D-TX-034)
  • Rep. Vicente Gonzalez (D-TX-015)
  • Rep. Will Hurd (R-TX-23)

U.S. Rep. Will Hurd (R-TX-23)

In signing on to become a cosponsor of H.R. 878 today, Texas Congressman Will Hurd appears to be the first member of the Republican party to do so nationwide. Hurd issued a press release lauding the bill and noting ATPE’s support for it.  “There’s no good reason why our teachers should pay out of their own pockets for the resources needed to do their jobs, which is why I’m proud to cosponsor this bill today,” said Rep. Hurd.

ATPE recognizes that many of our members routinely spend hundreds, if not thousands, of dollars out of their own pockets to help provide students with the supplies they need to thrive in the classroom. We appreciate those among our Congressional delegation who are supporting this bill to help give teachers additional, modest tax relief, and we hope that other members of our delegation will join the bipartisan effort. View ATPE’s press release about the federal tax deduction legislation here.

Early budget proposals include boosts for educators, classrooms

The Texas House of Representatives and Texas Senate released their initial budget recommendations this week, and each includes significant additional funding for public education.

The proposals drafted by the Legislative Budget Board (LBB) represent each chamber’s opening bid in budget negotiations for the 2020-21 fiscal biennium. The budget is the only bill the legislature is constitutionally required to pass within its 140-day session. If it fails to do so, lawmakers will be called back into one or more special sessions until a budget is passed.

The 2020-21 House budget proposal includes $7.1 billion in additional general revenue funds appropriated for public education, which represents a 17.2 percent increase over the 2018-2019 biennium. Looking at all funds, public education would see a $10.1 billion, 16.7 percent increase, under the House’s proposal.

The base budget is structured around sufficient funding to maintain services at the current level, and the additional funding comes from a single budget rider that appropriates an additional $9 billion contingent upon the 86th Texas Legislature enacting legislation to increase the state’s share of Foundation School Program (FSP) funding, enhancing district entitlement, reducing recapture, and providing local property tax relief.

Details of the House proposal are spelled out under Rider 77 (page 301 of the House budget):

77. Additional Foundation School Program Funds for Increasing the State Share, Enhancing School District Entitlement, Reducing Recapture, and Providing Tax Relief. It is the intent of the Eighty-Sixth Legislature to adopt comprehensive school finance legislation and provide local property tax relief. In addition to amounts appropriated above in Strategy A.1.1., FSP – Equalized Operations, and Strategy A.1.2., FSP – Equalized Facilities, $4.5 billion in fiscal year 2020 and $4.5 billion in fiscal year 2021 is appropriated out of the Foundation School Fund No. 193 to be used for the purposes specified in this rider.

The amounts appropriated in this rider are contingent on enactment of legislation supporting school districts and charter schools by increasing the state share of the Foundation School Program, enhancing district entitlement, reducing recapture, and providing local property tax relief, while maintaining an equitable system of school finance. Options may include, but are not limited to, increasing the Basic Allotment and providing additional funding for early childhood education, special education, and teacher compensation.

A portion of the amounts appropriated in this rider shall be used to provide local property tax relief. Funds shall be used to enable the compression of local maintenance and operations (M&O) property tax collections, pursuant to the provisions of the legislation, while ensuring school districts do not receive less total state and local funding through the FSP.

The $9.0 billion in Foundation School Fund No. 193 appropriated in this rider represents new state funding for school districts and charter schools above amounts estimated to fully fund current law. The $43.6 billion in current law appropriations provided above in Rider 3 includes the amount necessary to fully fund $2.4 billion in enrollment growth and $2.2 billion in additional state aid above 2018-19 funding levels associated with the increase under current law in the Guaranteed Yield associated with the Austin Independent School District in accordance with §41.002(a)(2) and §42.302(a-1)(1) of the Texas Education Code.

The Senate’s proposal would increase public education funding by $4.3 billion or 10.3 percent from general revenue, or $7 billion all funds — an 11.6 percent increase. This proposal includes an additional $3.7 billion to provide all teachers with a $5,000 raise effective at the start of the 2019-20 school year and $2.3 billion to reduce reliance on recapture. Senate Bill (SB) 3 filed Tuesday by state Sen. Jane Nelson (R-Flower Mound) would authorize the pay raise, if passed. Lower bill numbers are generally reserved each session for high-priority bills.

The governor, lieutenant governor, and speaker have each declared increasing teacher pay a high priority this session. Due to the publicity surrounding teacher pay, ATPE expects several teacher compensation bills to be filed this session. Our governmental relations team will be analyzing each one to determine how it is structured with regard to who is eligible and the extent to which it includes stable, reliable, and long-term state funding.

Providing additional money for teacher compensation and public education funding were the main topics in Tuesday’s Inauguration Day speeches at the Texas Capitol. Educators should note that this shift in focus among the state’s leaders is a direct result of educators’ increased involvement in the 2018 primary and general elections. Teachers, parents, and public education supporters sent a strong message that Texans demand better school funding and teacher pay. Even in instances where the pro-public education candidate was not elected, the strong showing by public school advocates successfully forced many elected officials to reexamine their stance on public education issues.

Make no mistake, we are only at this point because educators voted, rallied, and lobbied legislators like never before. Educators must keep a close eye on lawmakers over the next five months to ensure they follow through on their promises. ATPE will be bringing you regular updates on legislative proceedings, including changes to these early drafts of the budget and various compensation bills, and educators should remain vigilant and ready to make your voices heard at a moment’s notice. Visit ATPE’s Advocacy Central to learn more and share your own views on school funding and educator compensation with your own elected officials.

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.

School finance commission discusses initial recommendations

School finance commission meeting Dec. 11, 2018.

The Texas Commission on Public School Finance met Tuesday in Austin to discuss recommendations for the commission’s report, which is due to the legislature by the end of the month. The initial draft recommendations can be viewed here, and additional resources can be found here.

The draft report includes a recommendation that the 86th Texas Legislature “inject significant additional annual state revenue” through new strategic allotments and weights outlined in the commission’s report, including about $1.7 billion in specific areas. The report adds that for the purposes of new funding, members should note that an increase of $500 million in state funding is equal to a roughly 0.9 percent increase over the last budget biennium. This would be formula funding, targeted at the neediest studies, and tied to specific outcomes.

Commission Chair Scott Brister voiced reservations, suggesting that asking the legislature for significant additional funding is not the commission’s job. He later clarified that his chief opposition was to placing a dollar figure on additional funding. Several members pushed back, including House Public Education Committee Chair Dan Huberty (R-Houston), who said he would not sign a report that does not call for additional school funding.

The report also calls for reallocating $5.34 billion in existing funds to more impactful spending and greater system-wide equity. The commission recommends significant investment to substantially increase third grade reading levels. Outcomes-based funding would be targeted toward early literacy and post-secondary access of career, military, or higher education without remediation.

The commission is recommending a high-quality teacher allotment, initially funded at $200 million, for districts wishing to offer differentiated compensation to pay their most effective educators higher salaries sooner in their career. This would be contingent on districts creating locally-developed, multi-measure evaluation and compensation systems based on an outline created by the legislature. This includes the state setting a goal that top teachers have a path to a $100,000 salary and incentivizing districts to assign top teachers to the most challenging campuses.

Finally, the draft report calls for statutorily increasing the basic allotment, though it does not specify a specific amount. It calls for increasing the yield on “copper pennies” and compressing the rate in order to provide tax relief, as well as reducing the role of recapture in the school finance system. The report makes no recommendations regarding special education, instead suggesting that the current corrective action plan approved by the U.S. Department of Education should be completed before any additional reforms are discussed.

Discussing the commission’s major findings, Brister acknowledged that schools are being asked to do more than ever before. This includes higher security standards and providing for the physical and mental well-being of students in addition to educating them. He then asked to strike language from the report that says the state has failed to adequately fund public education.

After breaking for lunch, the commission returned for more in-depth discussion on individual recommendations. Commission member Todd Williams of the Commit Partnership in Dallas pointed out that the teacher compensation portion of the plan (Section D) does not include specific funding for strategic staffing such as that implemented by the Dallas ISD ACE program, which is intended to incentivize top teachers to teach at the highest-need campuses. Williams argued the evaluation system and strategic staffing system should be treated as separate and funded accordingly.

State Sen. Paul Bettencourt (R-Houston) then laid out the recommendations from the working group he chaired on revenues. The group’s primary recommendation is to adopt Gov. Greg Abbott’s plan to cap local property tax revenue growth. The plan suggests capping growth at 2.5 percent annually, and replacing revenue lost by school districts with state funding. The governor’s office does not specify how much this would cost or from where the replacement funding would come.

Texas Education Agency (TEA) Chief School Finance Officer Leo Lopez presented a chart addressing the three plans endorsed by Bettencourt’s group, which suggests that the governor’s plan would reduce local maintenance and operations (M&O) tax collections by nearly $1 billion and increase school district revenue by $300 million in 2020 at a cost of roughly $1.3 billion. By 2023, the governor’s plan is projected to reduce M&O tax collection by $3.7 billion while increasing school district revenues by $74 million. Lopez pointed out that this is primarily a tax relief plan, as opposed to a school finance plan, which explains why future funding is projected to flatten out.

The commission discussed the level of emphasis that should be placed upon the governor’s revenue cap plan. Members pointed out the interrelation of property taxes and school finance, as well as the need to focus on the commission’s statutory charge, which is to fix the school finance system. The governor’s plan alone would not change the fundamental mechanics of the school finance system.

Sen. Bettencourt has argued that the state’s coffers will be flush heading into the next budget cycle based on tax revenue from booming oil and gas production, but the state comptroller has yet to release a formal biennial revenue estimate (BRE) with hard numbers upon which to base a budget. State Rep. Ken King (R-Canadian), who represents oil and gas-dependent west Texas, cautioned against relying on oil and gas as a reliable, long-term funding source. A combination of the governor’s plan and the commission’s recommendations for additional public education spending could add up to a price tag north of $5 billion for the upcoming budget biennium.

The commission is scheduled to meet next Wednesday, Dec. 19, 2018, to vote on final recommendations. The commission is required by law to submit its report to the legislature by December 31.

From The Texas Tribune: A tight-fisted Texas Legislature with expensive ambitions

Analysis: A tight-fisted Texas Legislature with expensive ambitions” was first published by The Texas Tribune, a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.

The Texas Legislature’s strong allergy to tax increases might be abating — just as long as you don’t call them tax increases.

They’re not saying so out loud — no point in riling up a price-sensitive electorate before the holidays, before the upcoming legislative session — or before lawmakers are ready to make their sales pitch.

But the talk of school finance as a top legislative priority guarantees a conversation about taxes. While there are many great policy reasons to mess with that persistent and gnarly issue, the political motivation here is simple: Texas property owners have made it clear to their representatives that they want lower property taxes.

When you do hear lawmakers talking about tax increases next year — whatever euphemisms they choose — they’ll be talking in terms of how that money will pay for property tax cuts. Cutting everyone’s current most-hated tax is the only way to explain so many conservative legislators making serious noises about increasing state revenue.

Given the way the state pays for public education — with a combination of local property taxes, and state and federal funding — the only ways to lower property taxes are to cut public education spending or to find money elsewhere to offset property tax cuts.

In the state’s 2019 fiscal year, the local share of school finance spending is estimated to be 55.5 percent of the total, while the state’s share is expected to be 35 percent, according to the Legislative Budget Board. The rest comes from the federal government.

The last time the Texas Legislature tackled school finance, the local and state shares matched. Years of rising property values – and rising local property tax revenue with them – have allowed the state to lower its share.

The price tag for a rebalancing would be enormous, though. And in spite of Democratic gains in last month’s elections, Texas still has a Republican-dominated state government, with GOP majorities in both the House and Senate, and Republicans in every statewide office. Many of them got where they are by opposing anything that sounded like higher taxes, which makes the road ahead pretty interesting.

If you do some quick arithmetic on those 2019 estimates, it would take a $5.7 billion increase in annual state spending to rebalance the state and local shares of public education spending. Doing that would put them both back where they were in 2008 — each covering about 45 percent of the load.

That’s easier to do on the back of an envelope than it is to do in the Legislature. The budget ahead is tight. House and Senate leaders have to pass what’s called a “supplemental appropriations bill” to take care of shortages in the current budget, Hurricane Harvey recovery costs, and so on. Early guesstimates are that they’ll start more than $5 billion short of what they need for the next budget — and that’s before they even bring up the expensive school finance project.

The governor already is circulating a document that dares to mention taxes in the title: “Improving Student Outcomes and Maintaining Affordability through Comprehensive Education and Tax Reforms.”

That gets right to the politics of the situation: State leaders are interested in easing property tax burdens, and school finance is the biggest lever in their toolkit. It’s also way out of balance and happens to need fixing. Lawmakers often blame the imbalance on school funding formulas. But they’re the authors of those dreaded formulas, and this is also a chance to put something better in place.

But it’s the tax problem — the price of owning property — that has made their price-sensitive voters potentially receptive to increases in other taxes. New money could come from eliminating exemptions, from property appraisal reforms, from raising existing tax rates or creating new taxes — any number of things. They’ll decide the details when they meet. They’ll figure out what to call it, too: It might be remarkable to see “tax” in the title of the governor’s presentation, but its neighboring word — “reform” — is the political touch.

They want to lower property taxes to make their voters happy, and to accomplish that expensive task without stirring up a new revolt from a different set of taxpayers.

At the end, someone in Texas has to pay for this stuff.

 

This article originally appeared in The Texas Tribune at https://www.texastribune.org/2018/12/03/tight-fisted-texas-legislature-school-finance-property-tax/.

 

Texas Tribune mission statement

The Texas Tribune is a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.

Finance commission group finalizes recommendations

The Texas Commission on Public School Finance working group on revenue met Tuesday at the Texas Capitol to discuss recommendations to deliver to the full commission. State Sen. Paul Bettencourt (R-Houston), who leads the working group, indicated he is open to using the economic stabilization fund (ESF), which is commonly referred to as the “Rainy Day Fund,” to help fund public education.

School finance commission working group meeting November 27, 2018.

Bettencourt opened the meeting suggesting that state revenues are looking bullish heading into the next budget biennium. Again, Sen. Bettencourt emphasized his priority is phasing out the “Robin Hood” system of wealth equalization through recapture. According to Bettencourt, freezing recapture would cost approximately $2.3 billion.

Before Bettencourt began his presentation, commission member and Austin ISD Chief Financial Officer Nicole Conley Johnson told the group she had identified $14 billion in new programs to propose to the commission.

According to figures Bettencourt provided to the group, the state comptroller increased the revenue estimate for the next biennium to $110.2 billion in July 2018 from $104.9 billion in 2017, a $5.3 billion increase. During the first two months of fiscal year (FY) 2019, sales tax revenues, which represent 58 percent of all state tax collections, are expected to be up ten percent compared to FY 2018.

Bettencourt asserted two point upon which most agree: Without school finance reform, the state’s share of public education funding will continue to shrink, and the amount of funding districts pay into recapture for wealth equalization will continue to increase. Bettencourt emphasized his prediction that increased revenue in FY 2019 will provide additional general revenue (GR) which will be available to help fund schools.

State Rep. Diego Bernal (D-San Antonio), who is vice-chair of the House Public Education Committee, raised a question over how equity would be preserved if legislators make changes to or eliminate the recapture system. State Rep. Ken King (R-Canadian), who is also a member of the House Public Education Committee, also raised a concern that any increase in school funding will need to be sustainable.

Bettencourt presented the governor’s tax cap plan as the solution. The plan would increase funding for districts that increase teacher pay and improve student outcomes, however Rep. Bernal noted that outcomes-based funding threatens to reward districts that already have the resources necessary to improve while neglecting districts that have failed to improve precisely because they lack the necessary resources. The plan would also limit property tax revenue growth to 2.5 percent per year, which the plan promises to make up for with state funding.

Another proposal discussed by Bettencourt is one presented by the Texas Public Policy Foundation (TPPF), a far-right pro-voucher organization, which would aim to eliminate all school district maintenance and operations (M&O) property taxes. This would cost roughly $51.3 billion for the 2018-19 biennium. The TPPF proposal claims to be able to pay for itself by dedicating future increases in state revenues to public education, but Bettencourt conceded that this is an optimistic view.

Bettencourt also briefly discussed the idea of “sharing” recapture. In this plan, property value growth would be divided by thirds, and the benefits from the growth in property values would ostensibly be shared. Additionally, Bettencourt suggested using the increase in production severance taxes – largely due to oil and gas activity in the Permian Basin – to help fund public education. This funding stream currently already flows to public education and general revenue, with an overflow stream that is bifurcated between highway funding and the ESF. Despite the Senate’s opposition to spending ESF dollars in previous legislative sessions, Bettencourt indicated he’s now open to spending ESF money to help fund public education. Johnson argued that this represents a redirection of existing revenues and does not represent the new revenue necessary to improve school performance.

The working group voted to advance each of the proposals except the plan offered by TPPF to be considered by the full commission. Rep. King made the motion to table the TPPF plan, which he declared nonsensical. Several members expressed similar concerns. Closing the meeting, commission chair Scott Brister suggested that legislators should feel less constrained by court rulings enforcing equity. As a justice, Brister was a dissenting voice in the West Orange-Cove school finance ruling.

The full commission will meet Friday, again on December 5, and at least once more during the third week of December. The commission will get a chance to react to Tuesday’s recommendations and will arrive at a decision by the December 5 meeting on what the final report should look like. The following meeting will focus on what the report should say. The commission is required to submit its report to the legislature by December 31.

Brister asked commission members to do their best to reach a unanimous consensus on recommendations, and said that in lieu of a minority report, individual members will be allowed to place letters in an appendix to the final report.

 

School finance commission subcommittee approves expenditures plan

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

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

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

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

Group 2 – Increased spending on existing programs

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

Group 3 – New programs

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

Additional changes recommended:

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

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