84th texas legislative session - northwest · pdf file© 2015 moak casey and associates...

84th Texas Legislative Session

Superintendent’s Roundtable

February 17, 2015

NOVEMBER ELECTION

© 2015 Moak Casey and Associates 1-27-15

Many new faces in government next year: ! Governor – Greg Abbott !  Lt. Governor – Dan Patrick ! Attorney General – Ken Paxton ! Comptroller – Glenn Hegar ! Agriculture Commissioner – Sid Miller !  Land Commissioner – George P. Bush ! Chief Justice of Supreme Court – Nathan Hecht !  28 New House Members (38 more only in second

term) !  9 New Senators (5 previously in House; 5 more only in

second session) ! Commissioner of Education – Michael Williams

PARTY LINES


• House: 98 Republicans, 52 Democrats •  44% of House members are in 1st or 2nd

•  Senate: 20 Republicans, 11 Democrats term

•  45% of Senate members are in 1st or 2nd term

•  State Board of Education: 10 Republicans, 5 Democrats

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KEY COMMITTEE ASSIGNMENTS


•  Senate •  Education – Larry Taylor, Chair

•  Committee expanded to 11 members •  Lucio, Vice-Chair

Bettencourt Campbell Garcia Huffines Kolkhorst

•  Finance - Nelson

Rodriguez Seliger Taylor, Van West

•  State Affairs – Huffman

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KEY COMMITTEE ASSIGNMENTS


• House

•  Public Education – Jimmy Don Aycock •  Allen, Vice-Chair Deshotel Dutton Farney Bohac Galindo Gonzalez Huberty King VanDeaver

•  Appropriations – Dennis Bonnen •  Ways & Means – John Otto

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LEADERSHIP POSITIONS


• Governor Abbott •  “If Texas is to remain the leader at creating jobs, we

must become the leader at educating our children.”

•  "Cultivate teachers to educate students to fill the growing job markets that will keep Texas the economic engine of America"

•  Lt. Governor Patrick •  “...immoral to tell parents they must send their

children to a perennially failing school.” “...where we have failing schools and failing teachers, we must have change, and parents must have choice.”

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EDUCATION PRIORITIES OF Governor Abbott


•  Expanded funding for Pre-Kindergarten • All students finish third grade reading on at

least a third-grade level • All students finish third grade in math at or

above grade level • Make higher education more affordable

with math understanding at or above grade level -‐ See more at: h6p://www.educa;onnews.org/educa;on-‐policy-‐and-‐poli;cs/texas-‐gov-‐elect-‐abbo6-‐makes-‐educa;on-‐first-‐priority/#sthash.K5PTDzaC.dpuf

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EDUCATION PRIORITIES OF LT. GOV. PATRICK


•  Universal school choice •  Letter grades of A-F for schools and districts • Achievement school district •  Parent trigger •  Funding for:

•  Elementary reading programs •  Middle school career exploration •  Increase funding for Teach for America

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REVENUE AND BUDGET


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REVENUE ESTIMATE


• New Comptroller Hegar presented initial revenue estimate on January 12

•  The estimate can be modified at any time.

• General revenue above current biennium spending levels of about $18 billion

•  Increased property value provides effective new revenue.

•  Estimated price of crude oil may influence later revisions.

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REVENUE ESTIMATE


•  “The ending balance also reflects reduced state spending, notably from strong rising local property tax collections by school districts which serve to supplant state funds for public education purposes” - Comptroller Hegar

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REVENUE ESTIMATE


•  Sales Tax biennial growth 8.9% •  2014-15 biennium growth estimated at 12.1%

• Other Major Tax Revenue

•  Property Values (Combs projection) • 8.64% for 2014 • 5.71% for 2015 • 5.30% for 2016

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•  Natural gas tax down: -8% •  Oil tax down: -14.3% •  Motor vehicle sales up: +14.6% •  Franchise tax down: -1.6%

State Appropriations Outlook


Budget surplus (projected $2.5 - $5 billion)

Sales Tax collections are up

Economic Stabilization Fund (Rainy Day Fund) at a healthy $7.5 billion (but floor of $7 billion was just adopted)

Property values continue to rise, lessening the State’s funding obligation for schools

Economy so robust that most conservative projected rate of growth applied to the Constitutional Spending Limit will allow spending up to $10 billion more than last budget cycle

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State Appropriations Outlook


HOWEVER…

Legislature is hesitant to spend

Constitutional Spending Limit is a ceiling, not a floor

$1 billion shortfall from Medicaid needs plus transportation and water needs and desire to protect the border all compete for spending

Calls for tax relief

Pending school finance litigation

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House Bill 1


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•  $2.5 billion for enrollment growth

•  $2.2 billion in general revenue reserved in rider above “current services” funding level for FSP

•  $102.9 million for Instructional

Materials Allotment (IMA)

Senate Bill 2


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•  $3.2 billion funding level for FSP •  $3 billion explicitly for property tax

relief

•  2.5 billion for enrollment growth

•  $102.9 million for Instructional Materials Allotment (IMA)

REACTION TO HOUSE and Senate BUDGET Bills


•  Appropriations for FSP would have declined from current biennium due to property value growth

•  General revenue in TEA down $283.6 million, mostly from not funding the district cost for TRS

•  Not a good position when arguing the state’s case in Supreme Court

•  Continues state’s reliance on property tax to fuel the education funding structure

•  Significant formula improvement without increased state cost is a re-run of 2013, just cheaper

•  Still quite a bit of room under the spending limit, and lots of money available

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MAJOR ISSUES AND FILED LEGISLATION


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MAJOR EDUCATION FINANCE & ORGANIZATION ISSUES


•  School finance litigation (Texas Taxpayer v. Williams)

•  Prekindergarten funding •  Instructional Materials Allotment •  Funding for charter schools • Achievement school districts/low-performing

schools • Voucher-type programs • Debt/transparency

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FINANCE LEGISLATION


•  SB 161 by Rodriguez – Increase bilingual/ESL weight to 0.25

•  SB 241 by Watson – Change transportation funding; eliminate linear density

•  SB 243/SB 244 by Watson – Update or eliminate CEI

•  SB 247 by Watson – Increase Tier 2 Level 2 yield to match Tier 1

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Accountability


Rep. Huberty HB 741 commissioner to seek USDE waiver from annual testing in reading & math GR 3–8 so students in GR 4, 6, or 7 wouldn’t have to test if they performed well on the test the previous year. HB 742 eliminates STAAR not required by NCLB including GR 4 & 7 writing, GR 8 social studies, & U.S. History EOC. HB 743 85% of students GR 3–5 can complete STAAR in 2 hours & in GR 6–8 in 3 hours, also limits STAAR to “readiness” TEKS. Independent entity to determine STAAR validity using empirical evidence. TEKS reviewed by TEA, SBOE, & newly formed Advisory Committee.

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Accountability


Rep. Gonzalez HB 73 TEA to develop alternative tests for significantly cognitively disabled or medically fragile students per ARD decision. HB 407 school boards may provide performance-based or portfolio assessments in GR 3–8 in lieu of STAAR, & TEA to seek waiver from NLCB. HB 774 eliminates STAAR tests not required by NCLB in the GR 3–8 system including GR 4 & 7 writing, & GR 8 social studies (keeps U.S. History EOC).

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Accountability


Rep. Gonzalez HB 775 eliminates grade advancement reqs. for GR 5 & 8 reading & math STAAR, & an “Academic Achievement Committee” will prescribe accelerated instruction after a 2nd test failure. A “Graduation Committee” will review a high school portfolio to determine if a student who has failed to pass one or more EOCs has earned a diploma. HB 811 limits use of social studies & writing STAAR for diagnostic purposes only & prevents use for accreditations status, performance ratings, or distinction designations.

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Accountability


Rep. VanDeaver HB 1162 eliminates the passage of an EOC for graduation or grade promotion purposes. HB 1164 eliminates the writing requirements in grades 4 and 7 and in English I and II. Requires districts to assess them in the grades locally ie: portfolio, etc.

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Accountability


Sen. Seliger SB 149 an Individual Graduation Committee (for students who have failed an EOC twice) to review other specified criteria & determine if qualified to graduate. SB 312 TEA to provide detailed analysis & report on STAAR performance to the student, parent, & teacher(s). SB 313 SBOE to narrow number & scope of TEKS, & STAAR to include only “readiness” TEKS beginning in 2015–2016.

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PREKINDERGARTEN FUNDING


• Widespread agreement on need for additional funding for pre-K programs

•  Widespread disagreement on methodology

• Options •  Restore prior grant program •  Increase eligibility •  Increase to full-day support •  Create quality program for limited cost

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PREKINDERGARTEN LEGISLATION


• HB 124 by Martinez-Fischer, HB 186 by Thompson, and SB 72 by Ellis – PK open to all 4- year olds, must be offered if at least 15 identified; effective 2019-20 school year

• HB 391 by Munoz, HB 424 by Dutton – Full-day PK for eligible students, effective 2015-16

•  SB 23 by Zaffirini – Full-day open to all 4-year olds, effective 2019-20

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INSTRUCTIONAL MATERIALS ALLOTMENT


• Criticism of IMA as insufficient • Options

•  Continue current program •  Move to full local choice •  Combine funding requirements with the basic

allotment

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FUNDING FOR CHARTER SCHOOLS


• Charter schools lost in court over funding issues for facilities and operations

• Charter schools will seek legislative solutions (again) to deal with increased facility funding and funding for small charters

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ACHIEVEMENT SCHOOL DISTRICTS/LOW PERFORMING SCHOOLS


•  Statewide school district for limited number of low-performing schools with state direction and local funding

• Major political push by combination of conservative groups and some minority legislators

•  Substantial political support in 2013

•  Significant technical/legal issues over achievement school district use of local district funds

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VOUCHER-TYPE PROGRAMS


•  Recurring issue

• Variations in mechanism (straight voucher, taxpayer savings grant, mandatory school choice, tax-funded scholarships, etc.)

• Major political conflict

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VOUCHER/CHOICE LEGISLATION


• HB 279 by Simmons – PEG status for all special ed students

•  SB 276 by Campbell – taxpayer savings grant of 60% of average maintenance and operations spending; administration assigned to Comptroller; effective 2015-16

• HB 895 by Miller – tax credit scholarship program of 60% of the statewide average entitlement under Ch. 42; limited to $130M in 2016-17; credits under franchise or insurance premiums taxes limited to 50% of tax liability

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PRE-FILED BILLS – CLASS SIZE


• HB 51 by Gonzalez – 28 students in grades 5-8 • HB 171 by Alvarado – 22 students in grade 5 • HB 173 by Alvarado – reporting on class sizes

and assessment instruments in PK •  SB 73 by Ellis – 18 students in PK, starting 2019-20

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PRE-FILED BILLS - PROPERTY TAX / TAX RELIEF


• HB 52/HJR 30 by Martinez – Increase homestead exemption to $45,000

•  SB 156/SJR 14 by Nichols – Cap appraisal growth at 5%

• HB 193 by Murphy, HB 250 by Leach, SB 138 by Perry – Phase-out and repeal of franchise tax

•  SB 105 by Estes, SB 175 by Huffines – Repeal of franchise tax

•  SB 182 by Bettencourt, HB 365 by Elkins – Rollback rate calculations and election requirements for cities, counties, and other jurisdictions

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PRE-FILED BILLS - PROPERTY TAX / TAX RELIEF, CONT.


•  SB 279/SJR 21 by Watson – Increase homestead exemption to $25,000; adjust annually for inflation

•  SB 280 by Watson – New requirements for taxpayers appealing on the basis of unequal appraisal

•  SB 281 by Watson – New requirement for taxpayers to provide supporting evidence when protesting valuation

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FORECASTING PRODUCTIVITY OF THE 84TH LEGISLATURE & ITS


AFTERMATH

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SCHOOL FINANCE LITIGATION (TEXAS TAXPAYER V. WILLIAMS)


• Current system is: •  Inadequate •  Arbitrary •  Unsuitable •  Inequitable •  And fails the “meaningful discretion” test

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WHAT NEXT - OPTIONS FOR LEGISLATIVE ACTION


• Dietz opinion •  Most comprehensive indictment of Texas school

finance system ever issued •  Starting from scratch is not only an option, but is

virtually required given the scope of problems in the current system

•  Legislative/Executive reaction •  Further reduction of standards under consideration •  Informal efforts to understand current school

finance structure •  Public statements suggest delay until Supreme

Court decision (But they said the same thing two years ago)

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LITIGATION DECISION AREAS


•  The system fails to provide financial equity between taxpayers and school districts by permitting unconstitutional variations in the tax effort necessary to achieve the necessary operating costs of general diffusion of knowledge (GDK).

•  The system fails to provide financial equity in the provision of school facilities.

•  The system fails to provide sufficient resources for an overall adequate education encompassing the constitutional requirement of the general diffusion of knowledge (GDK).

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LITIGATION DECISION AREAS, CONT’D.


•  The inadequacy finding is particularly acute in the funding of programs for Economically Disadvantaged (ED) and English Language Learners (ELL).

• Current salary levels and staffing patterns represent a major illustration of inadequacy for the overall finance program.

•  School facilities are inadequate to achieving the GDK.

•  Resources for the GDK include funding for quality pre-K programs.

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LITIGATION DECISION AREAS, CONT’D.


• All of the structures used for the provision of state support are out of date and need revision, particularly including special education, small schools, CEI, high school allotment, technology funding, transportation, etc.

•  Local property tax features an absence of meaningful discretion for local enrichment.

•  The state fails to make provision for cost determinations under the GDK program.

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WHAT NEXT - APPEALS


Source: Thompson & Horton, LLP

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Next Steps Estimated Judge Dietz files final judgment

& findings of fact August 28, 2014

Appeal filed September 29, 2014

Supreme Court takes case January, 2015

Briefing scheduled April-August, 2015

Arguments before Supreme Court

Nov.-Dec., 2015

Supreme Court issues final ruling Spring, 2016

Legislative response in Special Session

Summer, 2016

Additional State Aid for Tax Reduction (ASATR)


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ASATR Reduction Factor

•  Revisions to funding formulas since 2011impacted schools districts currently outside of the Additional State Aid Tax Reduction (ASATR) funding portion of the Texas Education Code. Therefore, the District received only minimal benefit to state funding.

•  Per 2011 Legislation, ASATR is eliminated by 2017

FINANCE LEGISLATION


• HB 654 by Aycock – Complete revision to finance structure

•  Multi-district voluntary tax base consolidation •  Commissioner consolidation as alternative •  Elimination of the basic allotment and guaranteed

yield structure •  No defined state aid calculation; state funding

based solely on appropriations •  Limits on disparities in local revenue per WADA •  Equal distribution of state aid based on WADA •  Re-alignments of tax bases every 10 years

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COMPETITION


•  Tax Relief •  Transportation

•  RDF allocation far short of estimated requirements •  DPS transfer elimination •  Dedication of motor vehicle sales tax

• Higher Education •  Construction package

• Health and Human Services •  Current law costs for both biennium

•  TRS Care •  Increase needed in contributions

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www.texansforlocalschools.org

84th texas legislative session - northwest · pdf file© 2015 moak casey and associates...

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