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School finance commission approves final recommendations

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

School finance commission meeting December 19, 2018.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.

School finance commission discusses list of recommendations

The Texas Commission on Public School Finance met Tuesday at the Texas Capitol to hear recommendations from the working group on expenditures, which is led by House Public Education Committee chairman and state Rep. Dan Huberty (R-Houston).

School finance commission meeting September 25, 2018.

Texas Education Agency (TEA) Commissioner Mike Morath began the hearing by presenting the agency’s annual report, which purported to show an increase in education funding since 2007. Responding to questions from commission members, Morath conceded that the numbers were not adjusted for inflation.

State Sen. Paul Bettencourt (R-Houston) asked Morath to explain the dispute between the General Land Office (GLO) and the State Board of Education (SBOE) over public education funding. Morath stated that through the School Land Board (SLB), the GLO sent $750 million to public education for the last biennium. The GLO only sent $600 million for this biennium, bypassing the SBOE, and representing a roughly $150-190 million decrease in funding.

Sen. Bettencourt appeared to come down on the side of the SBOE in the dispute. SBOE Member Keven Ellis (R-Lufkin) suggested that the dispute will require a legislative fix. The entire SBOE sent a letter asking GLO Commissioner George P. Bush to reconsider the action and increase funding, but Bush refused to do so.

Commission Chair Scott Brister suggested that on the big question, whether to increase public school funding is not up to the commission. Member Ellis rightly pointed out that while it’s true the legislature is the only body that can appropriate funds, it is certainly the commission’s duty to discern what appropriate funding levels are and to make recommendations accordingly. This point was backed up by Austin ISD CFO Nicole Conley Johnson.

Brister added that the commission will require a half dozen meetings in November and December in order to finalize its report.

Rep. Huberty then walked the commission through a list of 22 recommendations from the working group on expenditures, beginning with reallocating cost of education index (CEI) funds. The recommendations are as follows:

Reallocations of existing funding:

  1. Reallocate cost of education funds. The CEI was last updated in 1991 and provides adjustment for cost of educating children in different parts of the state. Huberty argued that this formula is outdated and that funding could be rerouted to add $2.9 billion to the basic allotment.
  2. Reallocate Chapter 41 hold harmless funds worth $30 million annually.
  3. Reallocate Chapter 41 early agreement credit funds for an annual savings of $50 million.
  4. Reallocate gifted and talented allotment funds worth $165 million annually. Rep. Huberty and state Sen. Royce West (D-Dallas) emphasized that gifted and talented (GT) programs will not go away. Pflugerville ISD Superintendent Doug Killian cautioned that districts could come to view GT programs as an unfunded mandate, and suggested weighting GT funding instead. Todd Williams also voiced concern that eliminating dedicated GT funding could lead districts to underidentify GT students as a way to cut costs.
  5. Reallocate high school allotment funds worth $400 million annually.
  6. Move from prior year to current year property values worth $1.8 billion. Huberty suggested that this would more accurately reflect the current needs of school districts. Killian cautioned that this change will cost Pflugerville, which is a fast-growth district, $22.7 million in the first year. Conley Johnson added that this could add uncertainty to the budgeting process for districts.

Increased spending on existing programs:

  1. Increase compensatory education allotment from 0.2 to a spectrum of between 0.225 and 0.275, based on the concentration of severely challenged students. This would be worth $1.1-1.2 billion. Commissioner members engaged in a lengthy discussion on identifying metrics with which to identify need other than qualification for federal free and reduced lunches.
  2. Change the transportation allotment to a mileage-based approach based on at least $0.80 cents per mile appropriated by the legislature.
  3. Provide transportation funding to Chapter 41 districts, at an annual cost of $60 million.
  4. Recreate the small- and mid-size district adjustments as a standalone allotment, at an estimated cost of $0-400 million. Rep. Huberty argued that this would create more transparency.
  5. Increase the new instructional facilities allotment (NIFA) to $100 million per year, which would be a direct benefit to fast-growth school districts.
  6. Expand career and technical education (CTE) funding to 6th through 8th grades, at an annual cost of $20 million.

New programs:

  1. Create a new dual language allotment at 0.15, at an annual cost of $15-50 million. This is aimed to incentivize schools to transition from bilingual to more effective dual language programs.
  2. Create a new dyslexia allotment of 0.1, at an annual cost of $100 million. Currently districts do not receive direct funding for students with dyslexia, despite the fact the number of dyslexic students in Texas is estimated to be anywhere from 2.5 to more than ten percent.
  3. Create a new early childhood support allotment of 0.1, at an annual cost of $786 million. This would benefit students from kindergarten through 3rd grade, and could be used to fund any program that seeks to improve 3rd grade math and reading, including full-day pre-K.
  4. Create a 3rd grade reading bonus of 0.4, at an annual cost of $400 million. This is a simple incentive for students to meet grade level in 3rd grade reading. Williams suggested granting students facing social or economic challenges a greater reward.
  5. Create a college, career, and military readiness bonus at an annual cost of $400 million. This would provide additional funding for each graduating senior who does not require remediation after graduation or who is able to directly enter the workforce or military. This is intended to support the state’s “60×30” goals.
  6. Create a new teacher compensation program, at an annual cost of $100 million. This is a merit-based pay program that would allow certain educators to earn more by performing well on certain evaluation systems. Teachers would also be rewarded for teaching at campuses with higher levels of disadvantaged students. This program could grow significantly in size depending upon district participation. Williams acknowledged that local development involving teachers is incredibly important, and measures other than student STAAR results should be considered. Williams suggested it would be incumbent on the commissioner to develop a set of minimum standards.
  7. Create an extended year incentive program at an annual cost of $50 million. This would be aimed to reduce summer learning losses.

Additional changes:

  1. Utilize remaining funds from reallocations to increase the basic allotment.
  2. Change the guaranteed yield on tier II copper pennies from a set dollar amount to a percentage of the basic allotment.
  3. Link the tier II golden penny yield to a set percentile of wealth per student.

Many of these recommendations were also supported by recommendations from the working group on outcomes, led by Todd Williams. Williams congratulated Huberty on his working group’s efforts to find more efficient ways to provide the support students need, and added that the system will nonetheless need more money. In a final conversation around spending, Brister continued to suggest that more funding is not necessarily the solution. Member Ellis emphasized that the commission must address the adequacy of public education funding.

The working group on revenues, led by Sen. Bettencourt, is now the only working group yet to produce recommendations. Bettencourt pushed back on warnings that time is running short for the commission to complete its work, but did not provide a timeline for his work product.

 

 

Working group releases first set of school finance recommendations

The Texas Commission on Public School Finance working group on outcomes met Tuesday in Austin to consider recommendations based on more than 60 hours of testimony heard by the commission since its first meeting in January.

School finance commission working group on outcomes meeting July 3, 2018.

Group leader Todd Williams began the meeting reading from a detailed report that suggested the state should invest more dollars in specific strategies to accelerate reaching the “60×30” goal of ensuring 60 percent of students go onto post-secondary success by the year 2030.

Common themes from testimony included the importance of early intervention, since only 60 percent of students arrive at school kindergarten-ready. The report indicated teachers are the most important in-school factor in student outcomes, and funding should ensure that every teacher candidate has access to high quality educator preparation programs, ensure they stay in the profession and classroom, and ensure they address student challenges as early as possible.

In order to achieve post-secondary achievement, the report suggested funding should ensure graduates do not require remediation in higher education and that achievement of a post-secondary credential is not only expected, but achievable, affordable and supported. In addition, the report suggested systemic incentives, including ensuring that financial incentives are tied to the achievement of our most critical outcomes.

The working group’s formal recommendations encompass three core principles: Ready to learn, ready to teach, and ready to earn. According to the report, funding should include some specific incentives within the formula funding tied to specific goals at critical gates.

The first of these incentive gates is 3rd grade reading, and the working group is recommending providing an additional weight for low income and/or English language learners for pre-K through grade 3. At each district’s discretion, dollars from this 3rd grade reading investment would be sufficient to be used to fund full day pre-K, tutoring interventions, expanded dual language programs, specialized multi-year early childhood professional development, and a longer school year.

The second incentive is funding for every 8th grader who meets the state’s standard in reading and Algebra I. This is expected to help increase college readiness. The third incentive is funding for every high school graduate assessed as college or career ready, who successfully achieves industry certification or enrolls in college or the military. Incentives for rewarding low-income student achievement should be higher in recognition of the greater associated challenges. State Rep. Diego Bernal (D-San Antonio) was emphatic that incentives should not further increase inequity in the school funding system.

The fourth incentive is to provide the optional ability for districts to implement multi-measure evaluation systems and fund higher teacher distinction levels to attract and retain high-quality teachers. The working group noted the issues with current salary levels in recruiting and retaining teachers, and expressed the goal that districts be able to pay top-quality teachers more. Melissa Martin, the only teacher on the commission, said she’s torn over performance pay. Martin voiced concern that evaluations are property constructed and not totally subjective, which could introduce campus politics into the process.

The working group included the following additional recommendations:

  • Adjust compensatory education funding (currently $3.9 billion annually) in recognition that “free and reduced lunch” percentages are a very simplistic measure and do not adequately reflect the varying levels of poverty that exist throughout the state.
  • Strongly consider eliminating the five end-of-course (“EOC”) STAAR assessments and replacing with either SAT or ACT assessments that can measure growth based on a pre-SAT/ACT assessment given in 9th grade vs. a SAT/ACT assessment given in the 11th grade.
  • For districts choosing to implement a full day Pre-K program, consider crediting the appropriate full-day attendance for purposes of funding within the Foundation School Program.
  • TEA financially incent dual language strategies and disallow ELL pullout strategies as an accepted approach toward ELL instruction for larger districts exceeding 5,000 students (this subset of districts educates roughly 80% of all Texas students).
  • Align the current CTE weight of 1.35 (equivalent to $2.2 billion annually) toward CTE programs of study that are vigorously tied to the attainment of living wage credentials aligned with current workforce need and/or which provide students with critical financial literacy skills.
  • Amend legislation to require that failing ISD elementary and middle school campuses may be reconstituted after three years with an ACE-like school reconstitution plan (where better educators have been purposely placed at the struggling campus) with the state providing matching funds to reduce district costs.
  • To reduce prison recidivism and its associated costs to the state, TEA should amend the accountability system to incent school districts to help formerly incarcerated individuals receive their high school diploma or GED.
  • State funding should target professional development training towards schools/districts willing to launch blended learning and personalized learning pilots that help students matriculate faster than their peers if necessary, providing net savings in the long run to the state due to paying for less seat time.
  • Schools should be incentivized by the academic accountability system by creating a separate post-secondary readiness academic distinction. In addition, additional state funding should be awarded if the high school achieves the post-secondary readiness academic distinction.

The working group also expressed support for researching the costs associated with providing all-day pre-K for teachers’ children. The report concludes, “For us to succeed requires very substantive, immediate action on the part of the state (emphasis in original document) – we simply cannot “tweak” our K-12 system to meet this critical objective. Only by making strategic, impactful investments above current levels in the key areas noted, and implementing the innovative structural formula changes that are necessary, can we ensure Texas remains a thriving economy that all of its citizens can participate in.”

The recommendations carry an estimated $1 billion annual price tag, which would average out to about $200 per student and a 4 percent increase in the current basic allotment – still below 2008 inflation adjusted funding levels. This would gradually increase to $2.5 billion annually by 2030, which would average out to $450 per student, which would only be achieved if all districts implement performance pay programs. According to the report, this would still place Texas in the lowest quartile of per-student spending compared to other states.

The report argues these measures could pay for themselves by creating up to $4 billion in incremental potential yearly earnings and up to $250 million in additional state sales taxes for each yearly graduating cohort. Better-prepared graduates will earn more money and pay more in taxes. The report suggests success could also reduce growth in the approximate $12 billion the state spends each year in uninsured medical costs and incarceration.

The report, as amended, was approved with a unanimous vote of the five working group members. You can read all of the recommendations in the full draft report from the outcomes working group here, however some of the recommendations were altered or struck in Tuesday’s meeting. This article contains the most up-to-date versions of the recommendations. The full commission meets July 10.

School finance group looks at costs of undereducation

The Texas Committee on Public School Finance working group on outcomes met Tuesday morning to take invited testimony on a number of subjects. The agenda for Tuesday’s meeting at the Texas Capitol included intersections of education, healthcare access, child and family well-being, and economic outcomes in Texas; strategic talent management and building systems to attract, retain, and develop highly qualified talent into Texas public schools; and teacher quality / certification.

School finance commission working group on outcomes meets May 29, 2018.

Anne Dunkelberg with the Center for Public Policy Priorities was the first to testify regarding the consequences of an undereducated workforce, including effects on poverty, uninsured and incarceration rates. Texas leads the nation in both the rate and number of uninsured. Meanwhile, as healthcare premiums continue to rise, employees are paying a larger share each year from their own paychecks. Texas is also among the states with the highest poverty rates.

Texas’s high rate of uninsured translates to a heavier uncompensated care burden on local hospitals, which often try and recoup that cost through local property taxes. Underscoring the link between educational attainment and better pay, Dunkelberg warned that Texas must invest in education “to minimize massive public expenditures on undesirable outcomes.”

Dunkelberg concluded by acknowledging that, like businesses, the Texas Legislature is often under pressure to reduce costs now rather than down the line. Yet if the state is to ever see long-term savings, it must invest on the front end with education.

Next, Martin Winchester with the Texas Education Agency (TEA) testified with regard to teacher recruiting and retention.

“We do not believe by any means it is all about the pay,” said Winchester. Rather, Winchester suggested working conditions, such as adequate classroom support and opportunities to grow and advance in the profession, are the top factors.

Working group leader Todd Williams pondered why starting teachers in Texas are paid the same salary, regardless of whether they received 1,500 hours of classroom training or 15 hours. Winchester indicated that TEA Commissioner Mike Morath would support allowing educators from more rigorous certification programs to “skip a level” on the pay scale, and noted that first-year teachers from alternative certification programs quit at a much higher rate due to a lack of preparation.

While lauding the ideas discussed by TEA, state Rep. Diego Bernal (D-San Antonio), who serves as vice-chair of the House Public Education Committee, chided the agency for proposing policies at certain points while avoiding policy discussions at other points.

Kate Rogers with the Holdsworth Center was the last to testify, and spoke about strategic talent management. Rogers stressed the importance of coaching for both teachers and administrators, and emphasized that teachers need more non-instructional time in order to develop better lesson plans and participate in development activities such as coaching and mentoring. According to Rogers, teachers in the U.S. spend more of their time on direct classroom instruction than teachers in any other developed nation, which leaves them without enough time to do other critical activities needed to improve over time.

Williams concluded the meeting by laying out the next few steps for the working group, and proposed July or August as the target window for a preliminary report. No further meetings are currently scheduled.