president april 11, 2018 president elect superintendent...

PRESIDENT Aldine ISD Dr. Wanda Bamberg PRESIDENT‐ELECT Alief ISD Mr. HD Chambers VICE PRESIDENT Hurst‐Euless‐Bedford ISD Mr. Steve Chapman SECRETARY Northside ISD Dr. Brian Woods TREASURER Katy ISD Dr. Lance Hindt PAST PRESIDENT Arlington ISD Dr. Marcelo Cavazos

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April 11, 2018

Superintendent & LEAD Staff Agenda

10:30 – 10:35 a.m. Welcome and Introductions Dr. Wanda Bamberg

10:35 – 11:10 a.m. Consultants’ Report Moak, Casey & Associates, Hillco Partners, Thompson & Horton

11:10 – 11:25 a.m. Texas Supreme Court Property Tax Decision Moak, Casey & Associates, Hillco Partners, Thompson & Horton

11:25 – 12:00 p.m. Federal Update Thompson & Horton

12:00 – 12:15 p.m. Texas Commission on Public School Finance Moak, Casey & Associates and Hillco Partners

12:15 – 1:00 p.m.

LUNCH

1:00 – 2:15 p.m. Lt. Governor Dan Patrick

2:15 – 2:30 p.m. Closing Remarks and Adjournment Dr. Wanda Bamberg

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IN THE SUPREME COURT OF TEXAS

══════════ No. 15-0683

══════════

EXLP LEASING, LLC AND EES LEASING, LLC, PETITIONERS,

v.

GALVESTON CENTRAL APPRAISAL DISTRICT, RESPONDENT

══════════════════════════════════════════

ON PETITION FOR REVIEW FROM THE COURT OF APPEALS FOR THE FOURTEENTH DISTRICT OF TEXAS

══════════════════════════════════════════

Argued October 10, 2017

JUSTICE BROWN delivered the opinion of the Court. JUSTICE GUZMAN did not participate in the decision.

The Texas Constitution requires that taxation “shall be equal and uniform” and that

property “shall be taxed in proportion to its value.” The Galveston County appraisal district argues

that a statutory formula determining the taxable value of leased natural-gas compressors located

in its jurisdiction violates these constitutional provisions because this formula values the

compressors at a “minute fraction” of their market value. The parties further disagree on which

county—Galveston or Washington—may tax the compressors. We hold that the county has failed

to rebut the presumed constitutionality of the statutes at issue and that Washington County is the

taxable situs for the compressors. As the court of appeals held otherwise, we reverse its judgment.

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I

EXLP Leasing, LLC, and EES Leasing, LLC (collectively, “EXLP”) are wholly owned

subsidiaries of Exterran Holdings, Inc. EXLP owns and leases out compressor stations used to

deliver natural gas into pipelines. Some of these compressors are in use in Galveston County.

The county traditionally taxed the compressors in its jurisdiction as business-personal

property based on their full market value. But the legislature overrode that practice in 2012 when

it added leased heavy equipment to a statutory formula used to appraise the value of heavy

equipment held by dealers for sale. Act of May 21, 2011, 82d Leg., R.S., ch. 322, 2011 Tex. Gen.

Laws 938, 938–41. Accordingly, state law now requires appraisal based on the lease revenue the

compressors generated during the previous tax year divided by twelve. See TEX. TAX CODE

§ 23.1241(b).

EXLP contends the legislature intended to fix a problem that arose when the same

equipment was leased multiple times within one year, with each lease counting as an individual

sale for tax purposes. See Briggs Equip. Tr. v. Harris Cty. Appraisal Dist., 294 S.W.3d 667, 672

(Tex. App.—Houston [1st Dist.] 2009, pet. denied) (holding that “successive leases” cannot be

“‘subsequent sales’” because “they are not ‘dealer-financed sales’” as defined by the tax code).

The new divide-revenue-by-twelve formula would simplify the appraisal process while providing

an “offsetting gain” for the tax revenue lost to the fix. See Fiscal Note, Tex. H.B. 2476, 82d

Leg., R.S. (2011). But the county claims the anticipated offset never materialized because

lawmakers proceeded on the erroneous assumption that counties were not already taxing leased

heavy equipment at full market value. As a result, a statutory change “intended to produce a slight

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gain in tax revenue or remain neutral has actually resulted in a 97% loss in [compressor-based] tax

revenue” for Galveston County.

EXLP and the county are also at odds over where the compressors may be taxed in light of

the 2012 tax-code amendments. After the amendments were enacted, EXLP took the position that

its compressors in Galveston County are taxable only in Washington County, where EXLP

maintains a business address and storage yard. The county disagreed. In a letter to all dealers with

heavy equipment leased in its jurisdiction, the county announced it would appraise leased heavy

equipment under the tax-code provision generally covering business-personal property, see TEX.

TAX CODE § 22.01, declaring that “[r]ecent litigation has determined that the valuation of leased

heavy equipment under Section 23.1241 of the Texas Property Tax Code is unconstitutional.”

EXLP sued for judicial review pursuant to tax code sections 42.10 and 42.21. Both sides

moved for summary judgment. The county argued that: (1) the tax-code provisions at issue are

unconstitutional as applied to EXLP’s compressors in Galveston County; (2) EXLP’s compressors

are not actually “heavy equipment” under the tax code, and therefore the disputed statute is

inapplicable; and (3) Galveston County is the taxable situs for the compressors at issue. EXLP

urged the trial court to rule that: (1) the legislature validly exercised its power to prescribe a method

for appraising the value of its compressors; (2) its compressors are “heavy equipment” as defined

by the tax code; and (3) Washington County is the proper taxable situs. The trial court granted the

county’s motion in part, declaring that EXLP’s compressors are heavy equipment under the tax

code, but that tax code sections 23.1241 and 23.1242 are unconstitutional as applied to those

compressors. The trial court also declared Galveston County the compressors’ taxable situs.

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EXLP appealed.1 The court of appeals reversed in part, holding that “[n]either side

produced summary[-]judgment evidence demonstrating, as a matter of law, that the method of

appraising compression unit rental inventories embodied in sections 23.1241 and 23.1242 of the

Tax Code is either a reasonable or unreasonable method of calculating their reasonable market

value.” 475 S.W.3d 421, 428 (Tex. App.—Houston [14th Dist.] 2015). The case was remanded

“for further proceedings on the constitutionality of sections 23.1241 and 23.1242 as applied to the

compression unit rental inventories at issue.” Id. at 429. But the court of appeals affirmed the trial

court’s declaration of Galveston County as the taxable situs of EXLP’s compressors, holding that

tax code section 23.1241(f) “does not create a specific situs rule for [EXLP’s] inventory” and that

“its situs is determined under the general rule of section 21.02.” Id. at 430. Both parties sought our

review.

II

“There is always a presumption of constitutional validity with regard to legislation and it

is especially strong in respect to statutes relating to taxation.” In re Nestle USA, Inc., 387 S.W.3d

610, 623 (Tex. 2012) (quoting Vinson v. Burgess, 773 S.W.2d 263, 266 (Tex. 1989)). Courts

presume that the Legislature “understands and correctly appreciates the needs of its own people,

that its laws are directed to problems made manifest by experience, and that its discriminations are

based upon adequate grounds.” Enron Corp. v. Spring Indep. Sch. Dist., 922 S.W.2d 931, 934

(Tex. 1996) (quoting Smith v. Davis, 426 S.W.2d 827, 831 (Tex. 1968)). The party challenging the

statute’s constitutionality bears the burden of demonstrating that the enactment fails to meet

1 The county did not contest the trial court’s declaration that the compressors are “heavy equipment” under

tax code section 23.1241(a)(6).

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constitutional requirements. Spring Branch Indep. Sch. Dist. v. Stamos, 695 S.W.2d 556, 558 (Tex.

1985).

A

The Texas Constitution provides that “[t]axation shall be equal and uniform.” TEX. CONST.

art. VIII, § 1(a). We have held that the constitutional provisions that follow this directive are

examples of equal and uniform taxation, see Nestle, 387 S.W.3d at 620, including the requirement

that “real property . . . shall be taxed in proportion to its value, which shall be ascertained as may

be provided by law” but “never at a greater value than its fair market cash value.” TEX. CONST. art.

VIII, §§ 1(b), 20. Accordingly, a property tax is equal and uniform “only if it is in proportion to

property value.” Nestle, 387 S.W.3d at 620.

The county argues that for constitutional purposes, “value” under article VIII, section 1(b)

means the actual market value a willing buyer would pay a willing seller for the compressors at

issue. Cf. TEX. TAX CODE § 1.04(7) (defining “market value” as “the price at which a property

would transfer for cash or its equivalent under prevailing market conditions”); City of Harlingen

v. Estate of Sharboneau, 48 S.W.3d 177, 187 (Tex. 2001) (“Market value is the price the property

would bring when it is offered for sale by one who desires, but is not obligated to sell, and is

bought by one who is under no necessity of buying.” (internal quotation marks omitted)). The

county contends the legislature’s chosen approach for dealer-held leased heavy equipment,

however, values the compressors for tax purposes at “a minute fraction” of their market value.

Nothing in the constitution, however, binds the legislature to tax only on “market value”

as so defined. The constitution refers only to the legislature’s authority to set the “value” of

property for taxation. See TEX. CONST. art. VIII, § 1(b). It sets no requirement that “value” must

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approximate “market value.” In fact, section 1(b) does not mention “market value” at all. Instead,

the constitution assigns to the legislature the task of determining “value,” providing that it “shall

be ascertained as may be provided by law.” Id. This provision “would seem to leave the Legislature

free to adopt the mode of ascertaining the value of any class of property by such method as it might

deem best.” Mo., K. & T. Ry. Co. of Tex. v. Shannon, 100 S.W. 138, 144 (Tex. 1907); see also

Republic Ins. Co. v. Highland Park Indep. Sch. Dist., 102 S.W.2d 184, 193 (Tex. 1937) (observing

that “the fixing of a standard of valuation” is “purely of the exercise of discretion and judgment

on the part of the Legislature”).

To read “market value” into the constitution would both add a word the drafters omitted

and reduce legislative discretion to a purely ministerial duty. If “value” must always mean “market

value,” what is left for the legislature to “ascertain[]” and “provide[] by law”? See TEX. CONST.

art. VIII, § 1(b). Plainly, it is the legislature’s province under the constitution to decide how

property should be valued for taxation. In doing so, the legislature is not tethered to an extra-textual

valuation methodology that would dictate a particular outcome.

But the county argues our case law acknowledges “market value” as the appropriate

constitutional benchmark. See, e.g., Enron, 922 S.W.2d at 935 (“We have further held that section

1 of article VIII of our Constitution requires ‘value’ for ad valorem purposes to be based on the

reasonable market value of the property.”); State v. Whittenburg, 265 S.W.2d 569, 572 (Tex. 1954)

(noting that courts “have interpreted [article VIII, section 1 and a statute providing that ‘real

property shall be valued at its true and full value in money’] to mean that assessed valuations shall

be based on the reasonable cash market value of property” (internal quotation marks omitted));

Lively v. Mo., K. & T. Ry. of Tex., 120 S.W. 852, 856 (Tex. 1909) (“The value of the property is to

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be determined by what it can be bought and sold for.” (quoting New York State v. Barker, 179 U.S.

279, 285 (1900)). The county further contends this interpretation has been “codified” in the tax

code; indeed, the valuation statute challenged here itself purports to determine the “market value”

of dealer-held leased heavy equipment. See TEX. TAX CODE § 23.1241(b)–(c).

If our case law contradicts the constitution’s plain text, our case law is wrong. But we do

not believe any of our decisions warrant the conclusion that “value” must be constitutionally

attached to “market value.” And while many of the tax code’s valuation methodologies are based

on market value, the code also provides for alternative valuation methods in some circumstances.

In any event, the legislature’s reliance on market valuation for the vast majority of property does

not create a constitutional imperative that it do so in all instances.

We first address the tax code and then discuss our case law.

B

Without question, the tax code is built on the foundation of taxing property at market value.

It provides that “all taxable property is appraised according to its market value,” which “shall be

determined by the application of generally accepted appraisal methods and techniques.” Id.

§ 23.01(a)–(b). Accepted appraisal methods include the “cost method,” see id. § 23.011, the

“income method,” see id. § 23.012, and the “market data comparison method,” see id. § 23.013.

So at the outset, the tax code provides that taxation should generally be based on “market

value” but immediately clarifies that “market value” can mean different things depending on the

applicable “accepted appraisal method.” The code then supplements these baseline valuation

methods with a bevy of “special appraisal provisions”—an entire subchapter’s worth—

establishing different valuation rules and formulas for discrete categories of property. See id. §§

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23.11–.26. The challenged statute in this case is among them. It is one of seven statutes that value

certain classifications of property through a formula-based approach that bases value on a portion

of income—clearly a departure from the “generally accepted appraisal methods.” Four of them—

sections 23.121, 23.124, 23.1241, and 23.127—calculate “market value” based on the same

concept: dividing annual revenue by twelve to reach a monthly income average. Yet in each

instance, the applicable statute continues to refer to “market value” when describing the number

the formula is intended to produce.

Viewing tax code chapter 23 as a whole, the legislature clearly chose a single label—

“market value”—as a catch-all reference to the taxable value produced through application of the

code’s rules. Exactly what “market value” means for taxation purposes depends on the

circumstances at hand and the rules the legislature prescribed for them. The tax code has not

“codified” a single understanding of market value as the price a willing buyer would pay a willing

seller. Rather, the term encompasses a variety of ways to determine taxable value. See Tarrant

Appraisal Dist. v. Colonial Country Club, 767 S.W.2d 230, 234 (Tex. App.—Fort Worth 1989,

writ denied) (“One should not lose sight of the fact that the valuation is used only for purposes of

taxation. . . . What would occur in an actual sale would have no bearing on the proper valuation

for tax purposes.”). Importantly, section 23.1241 provides that “[f]or the purpose of the

computation of property tax, the market value of a dealer’s heavy equipment inventory on January

1 is . . . .” TEX. TAX CODE § 23.1241(b).

Regardless of how the term “market value” is used in the tax code, the legislature cannot

legislate itself a constitutional imperative. The constitution does not compel market-value-based

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valuation. That fact does not change simply because the legislature has enacted a tax code built on

“market value” terminology.

C

When speaking broadly about article VIII, section 1(b), we have observed that the

provision “would seem to leave the Legislature free to adopt the mode of ascertaining the value of

any class of property by such method as it might deem best.” Shannon, 100 S.W. at 144. For

instance, we have considered a constitutional challenge to a statute that allowed an insurance

company to deduct its reserves from the valuation of its personal property when computing its

property taxes. Republic Ins., 102 S.W.2d at 193. We concluded that “the question is not one

primarily of exemption of property from taxation, but is the fixing of a standard of valuation of

personal property for taxation,” which we held was “purely of the exercise of discretion and

judgment on the part of the Legislature.” Id. And when this resulted in an insurance company’s

paying no taxes on personal property at all, we cited article VIII, section 1, and held that “[t]he

Legislature has simply provided that in arriving at the valuation of assets of an insurance company,

account must be given to the reserve.” Hardin v. Cent. Am. Life Ins. Co., 374 S.W.2d 881, 884

(Tex. 1964).

But the county has scoured our case law and presented examples in which we referred to

“reasonable market value” when considering the constitution’s “value” provision. Still, none of

these cases turned on whether “value” in article VIII, section 1(b), means “market value.” Nor did

any examine the constitutional text as part of resolving a dispute about that text.

Two cases on which the county relies involved disparate local taxation. In Lively v.

Missouri, K. & T. Railroad Co., some property was taxed by local authorities at 100% of its market

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value while other property was taxed at 66%. 120 S.W. at 856. In Whelan v. State, some property

was taxed at a flat rate, regardless of market value. 282 S.W.2d 378, 380 (Tex. 1955). Both

schemes were then, and are today, examples of unequal and non-uniform taxation. See Enron, 922

S.W.2d at 935 (discussing Whelan and Lively and noting the local taxing authorities’ actions were

“clearly contrary to the constraints placed on the taxing authority by section 1”). But the county

argues these cases stand for a constitutional requirement that valuation always be based on market

value. We disagree.

Again, in neither of these cases did we directly construe article VIII, section 1(b). Nor was

the constitutionality of any statute challenged. In Lively and Whelan, it was the actions of local

taxing authorities that contravened state statutes and the constitution. And for the property at issue,

the law called for taxation at market value, and the constitution required it to be equal and uniform.

See Whelan, 282 S.W.2d at 380; Lively, 120 S.W. at 856–57. The local taxing authorities’ unilateral

actions violated both mandates. Neither case stands for the principle that all valuation statutes

themselves must be based on willing-buyer-willing-seller market value.

The county also directs us to State v. Whittenburg, in which we enforced a market-

value-based approach to property valuation for tax purposes. 265 S.W.2d at 572. But in that case,

willing-buyer-willing-seller market value was a statutory requirement. Id. (citing a statute

directing that “real property shall be valued at its true and full value in money”). So we held fast

to willing-buyer-willing-seller market value because that was the valuation method the legislature

prescribed for the property at issue.

The parties reserve most of their wrangling for Enron v. Spring ISD, in which the county

reminds us that we said “our Constitution requires ‘value’ for ad valorem tax purposes to be based

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on the reasonable market value of the property.” 922 S.W.2d at 935. Enron, however, was not a

case construing constitutional “value,” nor was there any dispute in that case whether valuation of

the property at issue was market-value based. Moreover, this statement preceded a brief

explanation of the constitutional error in Whelan, a case not directly applicable here for the reasons

explained above. EXLP, on the other hand, directs us to our holding that the legislature “may

constitutionally draw distinctions in the manner in which market value of property is determined

for ad valorem purposes, so long as the classifications are not unreasonable, arbitrary, or

capricious.” Id. at 936. In singling out heavy equipment held by dealers for lease, EXLP argues,

the legislature reasonably drew such a distinction.

Enron concerned a constitutional challenge to a statute that allowed Enron to choose

between two dates for tax appraisal of its natural-gas inventory. Id. at 933. Either way, Enron

would be taxed on the market value of its natural-gas inventory as of that date. Id. Accordingly,

no issue existed as to whether the formula would generate a number approximating “market value.”

Instead, the issue was whether it was fair to allow Enron—but not other taxpayers—to choose the

day on which its property would be valued. Id. at 933–34.

We upheld the statute, observing that on either date Enron’s natural-gas inventory was

appraised at its market value, as was statutorily required. Id. at 939. We likewise noted that the

legislature could reasonably conclude that “storage of natural gas for the needs of the citizens of

this state should not be discouraged or penalized by a taxation scheme,” and that the challenged

provision may reflect a “desire to promote assessments on a value that is more reflective of true

market value.” Id. In other words, the legislature treated taxpayers differently, but acted

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rationally—and therefore constitutionally—in doing so. See id. (“We cannot say that th[is] method

for valuing inventory . . . is so arbitrary and unreasonable that it is unconstitutional.”).

EXLP contends the legislature’s decision to value leased heavy equipment based on

income produced rather than willing-buyer-willing-seller market value is a permissible

classification appropriate for dealer-held inventory. The county urges, however, that the valuation

formula here is too divorced from actual market value to pass constitutional muster.2 In other

words, even if Enron allowed distinctions in treatment between taxpayers, the taxation itself must

still be based on reasonable market value. Allowing for a “reasonable discrepancy between the

true value of the property and the value at which it is assessed for taxes” due to “difference in

judgment,” see Dall. Cty. v. Dall. Nat’l Bank, 179 S.W.2d 288, 289 (Tex. 1944), the county

contends that the statute’s requirement that compressors be “valued at a maximum of one-month’s

rent” is “unreasonable, arbitrary, [and] capricious.”

The entirety of the county’s argument against section 23.1241 is that it impermissibly

ignores the compressors’ actual market value; the county offers no additional arguments for why

the scheme is otherwise unreasonable, arbitrary, or capricious. But no one argues the legislature

attempted to approximate market value, and we hold it is not constitutionally bound to do so. The

county’s complaint that the outcome is unfair—the compressors are taxed at a “minute fraction”

of their market value and the county has lost revenue—is a concern beyond our purview. Even if

the policy is inadvisable, we “decline to usurp legislative authority by issuing reform diktats from

2 The county also argues the classification here violates the equal-and-uniform provision—an argument we

address later.

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on high, supplanting lawmakers’ policy wisdom with our own.” Morath v. Tex. Taxpayer &

Student Fairness Coal., 490 S.W.3d 826, 886 (Tex. 2016).

EXLP mounts a vigorous defense of sections 23.1241 and 23.1242 as an efficient and

equitable statutory scheme, but we need not consider it. “The burden is on the party attacking the

statute to show that it is unconstitutional.” Tex. Mun. League Intergov’tl Risk Pool v. Tex. Workers’

Comp. Comm’n, 74 S.W.3d 377, 381 (Tex. 2002). The county made its stand on the idea that the

constitution compels a market-value approach to taxing the compressors at issue. Because it offers

no other reason why the statute is unconstitutional, the presumption favoring constitutionality

prevails. See Nestle, 387 S.W.3d at 623; see also Regan v. Taxation with Representation of Wash.,

461 U.S. 540, 547 (1983) (“[I]n taxation, even more than in other fields, legislatures possess the

greatest freedom in classification.” (quoting Madden v. Kentucky, 309 U.S. 83, 87–88 (1940)).

D

The county also briefly argues section 23.1241 violates the constitution’s “equal and

uniform” provision because other compressors—those owned rather than leased by their users—

are still taxed based on their market value. This “grossly disparate treatment,” the county contends,

is “fundamentally inequitable and inherently unconstitutional.”

Indeed, the legislature has, for tax purposes, classified leased heavy equipment owned by

dealers differently from heavy equipment owned by its ultimate users—a policy decision of which

the county clearly disapproves. But we held in Enron that the legislature may “constitutionally

draw distinctions . . . so long as the classifications are not unreasonable, arbitrary, or capricious.”

922 S.W.2d at 936. And the constitution’s equal-and-uniform mandate “generally applies only

within classes, not between classes.” Hegar v. Tex. Small Tobacco Coal., 496 S.W.3d 778, 785

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(Tex. 2016); see also EXLP Leasing, LLC v. Ward Cty. Appraisal Dist., 476 S.W.3d 752, 767

(Tex. App.—El Paso 2015, pet. filed) (“The constitutional mandate of equality and uniformity

requires only that persons falling within the same class be taxed alike.”). Those who own

compressors for their own use and those who own them to lease out are both compressor owners,

but they are in different tax classes. The county makes no argument why this classification is

impermissible. Instead, it summarily declares that the legislature’s method for assigning market

value is unreasonable, arbitrary, and capricious. As the county’s argument provides us nothing to

analyze, it fails.

E

The court of appeals correctly reversed the trial court’s judgment, but it erred when it

remanded the case for further proceedings on the basis that “[n]either side produced summary[-]

judgment evidence demonstrating, as a matter of law,” that the appraisal statutes at issue here

constitute a “reasonable or unreasonable method of calculating [the compressors’] reasonable

market value.” 475 S.W.3d at 428. The court of appeals noted the county’s evidence that the

legislature’s chosen appraisal method “reduced the appraised value of individual compression

units, sometimes to zero if a unit was not leased at all during that year.” Id. at 427. But, the court

concluded, the county did not furnish any evidence that such a result is arbitrary, capricious, or

unreasonable. Id.

We agree that the county has not carried its burden to rebut the presumed constitutionality

of the appraisal statutes at issue, but remanding for more factual development is not the answer.

However phrased, the county’s arguments can be reduced to its belief that the legislature may not

constitutionally appraise leased heavy equipment on a basis other than market value. But the

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legislature is not so confined. The question, therefore, is not whether the legislature’s chosen

approach reasonably or unreasonably calculates market value. Nor is it whether the legislature’s

decision to classify dealers of leased heavy equipment separately for tax purposes is or is not

reasonable. Again, the county makes no argument against the classification outside its contention

that the scheme is “unreasonable, arbitrary, or capricious” because it is not market-value-based.

The question here is one of law.3 It does not require the development of contingent facts.

The county did not carry its burden to rebut presumed constitutionality. Indeed, it had no hope of

doing so because the basis on which it proceeded—that the legislature must employ methodology

that approximates actual market value—finds no support in either the plain text of the constitution

or in our precedent. The trial court erred by holding the valuation statutes unconstitutional. And

the court of appeals erred by not reversing the trial court’s judgment and rendering judgment that

the county failed to rebut the presumed constitutionality of sections 23.1241 and 23.1242.

III

In its second issue, EXLP argues the court of appeals erroneously held that Galveston

County is the taxable situs of EXLP’s compressors located there. The legislature’s 2012 tax-code

amendments, EXLP argues, provide that taxes should be paid in the county where it conducts

business—Washington County—based on the revenue generated by its inventory as a whole and

regardless of the physical location of individual leased units. In moving for summary judgment on

this issue, EXLP offered evidence that the compressors located in Galveston County are part of its

3 The court of appeals treated the county’s argument as the county labeled it—an as-applied constitutional

challenge. But the claim here is facial; it attacks every application of the statute because the statute clearly does not even attempt to approximate market value under any set of circumstances. The county reveals its true position on the statute by its decision to categorically refuse to apply it as to all dealers doing business in its jurisdiction.

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Gulf Coast Region fleet, which EXLP leases and services out of its Washington County storage

yard and office.

Galveston County notes, however, that the statute on which EXLP relies nowhere mentions

taxable situs. Rather, the county argues, chapter 21 of the tax code determines situs. See TEX. TAX

CODE § 21.02. Section 21.02 provides that “tangible personal property is taxable by a taxing unit

if,” among other scenarios, “it is located in the unit on January 1 for more than a temporary period.”

Id. § 21.02(a)(1). The county maintains that EXLP’s compressors in Galveston County are semi-

permanent installations that often remain in place for years, and so they certainly should qualify

under section 21.02. EXLP responds that although the heavy-equipment inventory statutes at issue

never employ the phrase “taxable situs,” the statutory framework they create necessitates taxation

of an entire inventory in the county where the dealer conducts business.

In construing statutes our primary objective is to effectuate the legislature’s intent. See City

of Houston v. Bates, 406 S.W.3d 539, 543 (Tex. 2013). “Legislative intent is best expressed by the

plain meaning of the text unless the plain meaning leads to absurd results or a different meaning

is supplied by legislative definition or is apparent from the context.” Id. (citing Tex. Lottery

Comm’n v. First State Bank of DeQueen, 325 S.W.3d 628, 635 (Tex. 2010)). In ascertaining

legislative intent, we read the entire statute as a whole and do not consider isolated sections,

provisions, or terms in a vacuum. See City of San Antonio v. City of Boerne, 111 S.W.3d 22, 25

(Tex. 2003).

Chapter 21 of the tax code is titled “Taxable Situs” and includes various provisions

controlling the determination of where property may be properly taxed. See TEX. TAX

CODE §§ 21.01–.10. Section 21.02 applies to “[t]angible [p]ersonal [p]roperty [g]enerally . . .

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[e]xcept as provided by Subsections (b) and (e) and by Sections 21.021, 21.04, and 21.05.” Id.

§ 21.02(a). Section 21.02, the county argues, speaks definitively and provides for limited

exceptions to its applicability, none of which apply here.

EXLP’s situs argument, on the other hand, is based entirely on chapter 23, which is titled

“Appraisal Methods and Procedures” and includes the previously discussed provisions addressing

taxation of heavy equipment held by dealers for sale or lease. Sections 23.1242 and 23.1242 do

not specifically mention taxable situs. But EXLP contends a process for inventory reporting and

prepayment of taxes on a dealer’s entire inventory to a single county establishes a scheme that

supplants the default rules found in chapter 21.

In considering the implications of sections 23.1241 and 23.1242 for taxable situs of dealer-

held heavy equipment, we “consider the statute[s] as a whole and construe [them] in a manner

which harmonizes all of [their] various provisions.” Lamar Homes, Inc. v. Mid-Continent Cas.

Co., 242 S.W.3d 1, 19 (Tex. 2007). Chapter 21 addresses taxable situs by name; sections 23.1241

and 23.1242 do not. But the omission of “taxable situs” as a term of art in those sections does not

mean they say nothing on the subject. If, instead, they create a statutory framework specific to

dealer-held heavy equipment that assumes or necessitates a taxable-situs rule different from

section 21.02, we may ascertain legislative intent for a rule specific to the circumstances at hand

that overcomes the general situs rules separately found in chapter 21. In that case, “the specific

provision will ordinarily prevail unless the general provision is the later enactment and the

manifest intent is that the general provision prevail.” Harris Cty. Appraisal Dist. v. Tex. Workforce

Comm’n, 519 S.W.3d 113, 122 (Tex. 2017).

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18

We conclude that sections 23.1241 and 23.1242, read together, reflect the legislature’s

intent to fix the situs of dealer-held heavy equipment at the location where the dealer maintains its

inventory, rather than at the various locations where the equipment might otherwise be physically

located through application of the default situs rules set forth in chapter 21. This framework, which

we explain in greater detail below, cannot function if chapter 21’s provisions still determine

taxable situs.

The framework for valuation of dealer-held heavy equipment established in section

23.1241 ignores the physical location of any particular unit of inventory on any particular date.

Instead, section 23.1241(b) provides that the value of a dealer’s heavy-equipment inventory is

determined by the annual income generated by the inventory as a whole, rather than the income

from each individual unit of equipment. See TEX. TAX CODE § 23.1241(b) (“For the purpose of the

computation of property tax, the market value of a dealer’s heavy equipment inventory on

January 1 is the total annual sales [defined elsewhere to include lease revenue] . . . for the 12-

month period corresponding to the preceding tax year, divided by 12.” (emphasis added)). A

“[d]ealer’s heavy equipment inventory” is statutorily defined as “all items of heavy equipment that

a dealer holds for sale, lease, or rent in this state during a 12-month period.” Id. § 23.1241(a)(2)

(emphasis added). Similarly, “[t]otal annual sales” includes “lease and rental payments for each

lease or rental of heavy equipment inventory in a 12-month period.” Id. § 23.1241(a)(9)(B).

Broadly speaking, section 23.1241 looks to inventory-wide revenue. The revenue

generated by individual units, wherever they may be, is relevant only in that it produces part of the

data fed into the valuation formula that produces an aggregate taxable valuation on “all items of

heavy equipment . . . in this state.” See id. § 23.1241(a)(2). Section 23.1241 includes no process

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for tracking individual units or documenting the revenue they produce while located in any given

county on any particular date.

Section 23.1241 further requires dealers to value their inventory and file an annual

declaration “with the chief appraiser” and “collector” containing “a statement that the declarant is

the owner of a dealer’s heavy equipment” and stating “the market value of the declarant’s heavy

equipment inventory for the current tax year as computed under [section 23.1241(b)].” Id.

§ 23.1241(f)(2)–(3). The dealer’s annual declaration is a precursor to the statutorily required

monthly prepayment of anticipated property taxes due on that inventory to the local taxing

jurisdictions. This process is outlined in section 23.1242, titled “Prepayment of Taxes by Heavy

Equipment Dealers.”

The process for prepayment of taxes indicates legislative intent to fix the tax situs for heavy

equipment at the business location where the dealer maintains its inventory, not the myriad

locations where units of the inventory are physically present at any given time. Dealers are required

to file an annual heavy-equipment inventory form promulgated by the comptroller, which must

contain: (1) “the name and business address of each location at which the declarant conducts

business” (not each location where a unit of heavy equipment was located on January 1); (2) “a

statement that the declarant is the owner of a dealer’s heavy equipment inventory”; and (3) “the

market value of the declarant’s heavy equipment inventory for the current tax year as computed

under Subsection (b).” Id. § 23.1241(f). Then the dealer must file with “the collector” monthly

heavy-equipment inventory tax statements indicating the “unit property tax” of all items sold or

leased the preceding month and, “together with the statement,” must “deposit with the collector an

amount equal to the total of unit property tax assigned to all items of heavy equipment sold, leased,

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20

or rented from the dealer’s heavy equipment inventory in the preceding month to which a unit

property tax was assigned.” Id. § 23.1242(b) (emphasis added). Those funds are held in escrow.

Id. § 23.1242(c). At the end of the year, after tax rates are finalized, the taxing unit prepares the

annual tax bill, toward which prepayments held in escrow are applied. See id. § 23.1242(h). This

tax-prepayment system centers on the “unit property tax,” which is calculated by multiplying the

payments received for each unit by the “unit property tax factor,” calculated as the “tax rate at the

location where a dealer’s heavy equipment inventory is located on January 1”—not the different

tax rates at the various locations where each individual unit of the dealer’s inventory is located on

January 1. Id. § 23.1242(a)(4) (emphasis added).

The county’s position would require EXLP to initiate this process in every county in which

any piece of its leased equipment is located long enough to be taxed under section 21.02. But the

procedure explained above is incompatible with that approach—it plainly calls for prepayments

based on the monthly revenue generated by a dealer’s entire inventory, regardless of the physical

location of individual units. Under section 21.02, however, physical location is nearly all that

matters.

It necessarily follows that those prepayments—and the dealer’s ultimate tax liability—can

be made and incurred in only one county. Otherwise, dealers would face double or greater taxation

when paying taxes on an entire inventory in every county where a unit of property is located. And

application of the default situs provision would lead to exactly that result. Because it considers the

location of individual units of inventory rather than the revenue generated by the inventory as a

whole, dealers would be subject to taxation in each county where a unit of their inventory was

located “on January 1 for more than a temporary period.” See id. § 21.02(a)(1). This piecemeal

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approach to valuing and taxing heavy-equipment inventories is inconsistent with the

comprehensive methodology contained in sections 23.1241 and 23.1242, which look to inventory-

wide revenue regardless of location.

A county seeking to tax only EXLP’s compressors in its jurisdiction faces a statutory

impossibility: it must rely on section 21.02 to establish taxable situs within its jurisdiction but

cannot apply the exclusive procedure for taxing dealer-owned heavy equipment without valuing

and taxing the dealer’s entire inventory. If a county seeks to tax discrete units in its jurisdiction

under section 21.02, it must ignore sections 23.1241 and 23.1242 altogether. And Galveston

County chose exactly this when it effectively decided to ignore the legislature’s 2012 tax-code

amendments and continue taxing EXLP’s compressors in its jurisdiction based on their full market

value.

Conversely, a dealer could not pay taxes on individual units of leased equipment to the

counties in which the equipment resides on January 1 and simultaneously follow the process for

valuing and making prepayments on its entire inventory as mandated by sections 23.1241 and

23.1242. If a dealer were required to pay taxes on, say, one compressor located in any given county

to that county, the procedure specified in sections 23.1241 and 23.1242 would require the dealer

to file a declaration of its entire inventory in that county and make monthly tax prepayments based

on the revenue produced by that inventory.4 This is obviously not a process that can be followed

more than once, in a single county, every tax year. It would be neither sensible nor workable to

4 Under section 23.1242(b), monthly prepayments must consist of “the total of unit property tax assigned to

all items of heavy equipment sold, leased, or rented from the dealer’s heavy equipment inventory in the preceding month.” Pursuant to that subsection, this “unit property tax” is determined by multiplying the sales price or rental payment received for each unit by the “unit property tax factor,” which, under section 23.1242(a)(4), is calculated based on the preceding year’s ad valorem tax rate “at the location where a dealer’s heavy equipment inventory”—not each individual unit—is located on January 1 of the current tax year.

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send prepayments and monthly statements to each of the various counties in which a unit is

located—which may not always be possible when dealers do not know where leased equipment is

at all times—rather than to a single county where a dealer’s entire inventory is based.

We hold section 21.02 does not control the taxable situs of property covered by section

23.1242. Although section 21.02(a) does not include an exception to its applicability for leased

heavy-equipment inventory, it nonetheless cannot be applied while giving effect to the valuation

and prepayment framework created by sections 23.1241 and 23.1242. But both statutes can be

given full effect if section 21.02(a) is seen for what it is—a default rule determining taxable situs

for tangible personal property generally—and if sections 23.1241 and 23.1242 are read to create a

comprehensive statutory scheme containing its own taxable-situs rules.

The county sought summary judgment that, based on section 21.02, Galveston County is

the taxable situs of EXLP’s compressors located there. It makes no alternative argument that,

pursuant to sections 23.1241 and 23.1242, EXLP was obligated to file a declaration of its inventory

in Galveston County, see id. § 23.1241(f), pre-pay taxes on that inventory, see id. § 23.1242(b),

and ultimately be liable to Galveston County for the taxable value of its inventory, see id. §

23.1242(b). We are left with no basis to conclude, as a matter of law, that Galveston County is the

taxable situs for EXLP’s inventory or for any units located in Galveston County.

The question, then, is whether EXLP should have been granted summary judgment that its

compressors located in Galveston County are properly taxable in Washington County. Sections

23.1241 and 23.1242 are clear that taxes should be paid based on inventory-wide revenue, and

EXLP argues it should make payment in the county where it “conducts business.” According to

affidavit testimony from an EXLP regional vice president, the compressors located in Galveston

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23

County are part of EXLP’s “Gulf Coast Region fleet.” As such, they are “assigned” to EXLP’s

“business location and storage yard in Washington County,” which is used to “manage the

inventory of compressors in the Gulf Coast region.” At this location, EXLP “maintains offices

open to the public, stores the equipment in the yard when not in use, services and repairs the

equipment, stores and sells replacement parts, maintains its records, coordinates its field service

and logistics, and employs service personnel.” So although individual units of EXLP’s inventory

may be anywhere on January 1, its inventory is based and maintained in Washington County.

Importantly, Galveston County does not argue Washington County should not be EXLP’s

taxable situs if the statutory framework described above is accepted. It did not present

controverting evidence that EXLP’s Washington County yard is not where the leased compressors

located in Galveston County are maintained, serviced, and overseen. But EXLP offered summary-

judgment evidence that its Washington County business location is such a facility—the

compressors at issue here are “assigned to” the Washington County storage yard, which “manages

the inventory of compressors in the Gulf Coast region.” We conclude EXLP met its summary-

judgment burden to conclusively establish Washington County as the proper taxable situs for its

inventory.

* * *

The county goes to great lengths to argue the impropriety of both the valuation scheme and

situs implications found in 23.1241 and 23.1242. It paints a dire picture of lost tax revenue. And

it insists the compressors at issue are massive installations that remain fixed in place for years and

should not be treated the same as a truly transitory inventory of bulldozers or backhoes. But even

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if this were all true, it does not cure our inability to pass judgment on the wisdom of the

legislature’s chosen tax policies.

The legislature is “free to adopt the mode of ascertaining the value of any class of property

by such method as it might deem best,” Shannon, 100 S.W. at 144, and its statutory scheme sets

situs in the county where the dealer does business. If the legislature’s chosen taxation scheme

produces undesirable results unforeseen by the legislature, the remedy lies in modifying the law

through the legislative process. We reverse the court of appeals and render judgment against

Galveston County on both issues.

_______________________________ Jeffrey V. Brown Justice

OPINION DELIVERED: March 2, 2018

25

3/26/2018 President Trump Signs Spending Bill That Includes Billions More for Education - Politics K-12 - Education Week

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President Trump Signs Spending Bill That Includes Billions More for Education

By Andrew Ujifusa on March 23, 2018 1:31 PM

President Donald Trump signed into law spending legislation that provides a significant funding increase for the U.S. Department of

Education, including more money for educator development, after-school programs, and special education, among other programs.

During the 2016 campaign, Trump said he was interested in either eliminating or dramatically shrinking the Education Department. But after

months of failing to agree on fiscal 2018 spending levels, lawmakers finally passed a spending package that rebuffed Trump's attempt to cut

the department's budget by the largest percentage in its history. And Capitol Hill also left out two major school choice initiatives put forward

by Trump and Secretary of Education Betsy DeVos. (Trump said Friday morning that he was considering vetoing the bill over its lack of

protections for recipients of Deferred Action for Childhood Arrivals, or DACA, and the lack of "full funding" for a wall on the border with

Mexico.)

"We wanted to include DACA in this bill. The Democrats would not do it," Trump said after announcing he had signed the bill.

Lawmakers boosted overall spending at the Education Department by $2.6 billion over previously enacted levels in fiscal 2018, up to $70.9

billion. It's the highest-ever appropriation for discretionary spending at the Education Department on paper, although not when you adjust for

inflation.

In addition, funding for Title I, the biggest pot of federal money for public schools, which is earmarked for disadvantaged students, is rising by

$300 million from fiscal 2017 enacted spending, up to $15.8 billion.

Trump's budget plan for fiscal 2018 would have cut discretionary education spending by $9.2 billion. So the final appropriations for fiscal 2018

are a significant rebuke of sorts to the president's education vision.

In fact, the bill Trump signed into law omitted the $250 million private school choice initiative the president and DeVos sought, as well as a $1

billion program designed to encourage open enrollment in districts.

Title II, which provides professional development to educators, is flat-funded at roughly $2.1 billion. The Trump budget pitch for fiscal 2018

eliminated Title II entirely—it was the single biggest cut to K-12 Trump sought for fiscal 2018. And Title IV, a block grant for districts that can

fund a diverse set of needs from school safety to ed-tech, is receiving $1.1 billion, a big increase from its current funding level of $400 million.

Trump also sought to eliminate Title IV.

Funding for 21st Century Community Learning Centers increases by $20 million up to $1.2 billion; that's another program the Trump budget

proposal axed. In addition, special education grants go up by $299 million to $13.1 billion. And federal aid to charter schools rise to $400

million, a $58 million boost.

The fiscal 2018 appropriations measure also bans funds from the bill being used for "a reorganization that decentralizes, reduces the staffing

level, or alters the responsibilities, structure, authority, or functionality of the Budget Service of the Department of Education." DeVos had been

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seeking such a change as part of her effort to restructure and streamline the department.

Lawmakers also rebuffed a move by DeVos to reduce the office for civil rights' budget by $1 million—the bill increases funding from $109

million to $117 million.

The spending agreement includes a $2.37 billion increase to the Child Care Development Block Grant, totaling $5.226 billion. And it hikes up

Head Start funding by $610 million, bringing it to $9.863 billion. Meanwhile, the Preschool Development Grants, which the Trump administration

sought to eliminate, were level-funded at $250 million. The program, which was created through ESSA, is a big priority for Sen. Patty Murray of

Washington state, the top Democrat on the Senate education committee.

There's also $120 million for the Education Innovation and Research program or EIR, which helps test out promising practices at the district

level. In its most recent budget request, the Trump administration sought to boost that program to $200 million, and fund only projects that

would help bolster science, technology, engineering, and math education. Instead, there's now a chunk of EIR funding for STEM, $50 million.

The rest can go to other kinds of projects.

Congress must first pass the bill and send it to Trump for his signature before these spending levels are set. The government will shut down

when Friday turns to Saturday if new spending levels for fiscal 2018 aren't finalized by then.

Technically, the deadline for lawmakers approving appropriations legislation for this fiscal year was the start of last October. But as you've

probably heard, Capitol Hill's dealmaking ability on spending has been weak recently. So federal spending has limped along through a series of

resolutions that have largely carried over fiscal 2017 spending.

A sign of how far behind Congress is: House lawmakers just heard from U.S. Secretary of Education Betsy DeVos about the president's fiscal

2019 budget blueprint on Tuesday.

Changes to School Safety

While the new spending accord raises overall federal school safety funding, it also shifts funds from an existing, wide-ranging school safety

grant program that focuses on school environments toward the new STOP School Violence Act, which allows that funding to be used for

physical security measures, like metal detectors. (The STOP Act, introduced previously in the House and Senate, is included in the omnibus

bill.)

The final budget takes $75 million appropriated for the Comprehensive School Safety Initiative—an existing program in the Department of

Justice that funds research and implementation of a wide range of evidence-based safety programs that range from bullying prevention to

innovative approaches to school policing—and redirects that funding toward programs authorized under the STOP School Violence Act.

The Comprehensive School Safety Initiative, which was developed after the 2012 school shooting in Newtown, Conn., emphasized evaluation to

determine best practices and build an evidence base for school safety programs. The STOP School Violence Act does not include a focus on

research and evaluation of the program it funds.

The budget says funding provided through the STOP School Violence Act can be used to support evidence-based programs, violence

prevention efforts, and anonymous reporting systems. But it can also be used to support physical security upgrades for schools, like "metal

detectors, locks, lighting, and other deterrent measures."

Some school safety researchers have largely favored efforts to build safe and supportive schools over physical security measures, which

they've said can make some students feel less safe.

Lawmakers' Reaction

Earlier this week, the top Senate Democrat for education, Sen. Patty Murray of Washington state, praised the bipartisan agreement to dismiss

the "extreme ideas to privatize our nation's public schools and dismantle the Department of Education" from DeVos.

"I'm proud to have worked with Republicans in Congress to flatly reject these ideas, and increase funding for programs Secretary DeVos tried

to cut, including K-12 education, civil rights protections, college affordability, and more," Murray said in a statement.

And Sen. Marco Rubio, R-Fla., praised the measure for including the STOP School Violence Act, as well as funding for other programs that

can be use to help with school safety, such as Title IV:

In addition to #STOPSchoolViolenceAct in the Omnibus we

Marco Rubio@marcorubio

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Meanwhile, the Title IV-A Coalition, which backs more funding for the program, also celebrated the new money for Title IV.

"This level of funding will allow school districts to have true flexibility in determining how to meaningfully invest in and support programs that

support safe and healthy students, a well-rounded academic curriculum, and an effective educational technology program," the group said in a

statement.

Need some key spending information in chart form? We've got you covered. Check it out below:

The Spending Bill's Potential Impact on theEducation Dept. Under Trump and DeVos

Congress is nally poised to approve a scal 2018 omnibus spending bill.See the chart below to see which key programs are slated to get more, less,or the same amount of money compared to scal 2017. Fiscal 2017 isrepresented by the blue bars, while the scal 2018 bill is represented by theorange bars. You can hover over the bars to see their value, in tens ofthousands of dollars. (So "$14,900" for Title I represents scal 2017 spendingof $14.9 billion.)

Title I Grants to Districts

Title II-A (Teacher and Principals)

Title III (English-LanguageAcquisition)

Title IV-A (Student Support andAcademic Enrichment Block Grant)

Special Education

Charter School Grants

21st Century Learning Centers(After-school)

15,500

15,800

2,100

2,100

737

737

400

1,100

12,800

13,100

342

400

1,100

1,200

In addition to #STOPSchoolViolenceAct in the Omnibus we were able to get $75M for the Comprehensive School Safety Initative,a $47m increase for school safety grant programs & $700m increase in grants to school districts for school counselors & school-based mental health8:50 PM - Mar 21, 2018

1,235 947 people are talking about this

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Of ce for Civil Rights

School Safety National Activities

Education Innovation and Research

Institute of Education Sciences

Career-Tech Grants

Indian Education

Head Start (Part of the Health andHuman Services Budget)

Comprehensive LiteracyDevelopment Grants

Migrant Students

Impact Aid

GEAR UP (Low-Income Students'Higher Ed. Access)

TRIO (Disadvantaged Students,K-12 and Higher Ed.)

1 2000 6000 10000 14000 18000

,

109

117

68

90

100

120

605

613

1,117

1,200

165

180

9,250

9,860

190

190

375

375

1,303

1,414

340

350

950

1,010

Fiscal 2017 Fiscal 2018 Omnibus Bill

Fiscal 2019 is due to start Oct. 1.

Staff Writer Evie Blad and Assistant Editor Alyson Klein contributed to this blog post.

Photo: President Donald Trump answers questions as he leaves the Diplomatic Room of the White House in Washington on March 23, after

signing the $1.3 trillion spending bill. (Pablo Martinez Monsivais/AP)

Don't miss another Politics K-12 post. Sign up here to get news alerts in your email inbox.

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Follow us on Twitter at @PoliticsK12.

Here are highlights of President Donald Trump's administration on education:

Year One Check-In: What's Trump Done on K-12 Compared to Other Presidents?

Here Are Major Questions About Education Facing Trump in 2018

Staffing the Education Department Under Trump

Trump's First Budget Plan Aimed Cut Spending but Increase School Choice

Categories: Betsy DeVos Congress Donald Trump Federal Budget School Spending

Tags: Betsy DeVos Congress federal budget spending Trump

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1 | Page

**Amounts are estimates based on TEA’s current knowledge and are subject to significant change. Some costs may be eligible for Federal Emergency Management Agency (FEMA) reimbursements. For FY 2019, TEA will request a supplemental appropriation during the 86th Texas Legislature for the difference between the amount necessary to fully fund the formulas in FY 2019 and the amount appropriated in the General Appropriations Act.

Hurricane Harvey School Finance Issues

March 12, 2018

Finance Issue/Response

A

Is there an Outstanding Decision for the Legislature?

B

FY 2018 Estimated Costs**

C

FY 2019 Estimated Costs** D

Biennial Total Est. Cost**

E

Legal Authority

F

Pre-Pay for Attendance increases for displaced students

1 Districts will experience increased enrollment due to student displacement in the 2017–2018 school year.

Is this currently a legally required cost to the state? Yes.

Issue: Many districts have newly enrolled students displaced from their home districts because of Hurricane Harvey. TEA does not normally increase Foundation School Program (FSP formula) funding to districts during the school year when there are increases in a district’s student enrollment. Instead, FSP formula increases are made during the FSP settle-up process occurring in September of 2018 (FY 2019) following the school year.

Legislative solution: Districts can receive an increase in their state aid during the 2017–2018 school year if they have increased average daily attendance (ADA) and apply to TEA.

To date, only six districts have applied for adjustments with TEA, with a total of 324 students in ADA. These districts include Calallen ISD, College Station ISD, Cuero ISD, Gregory Portland ISD, Splendora ISD, and Victoria ISD.

No.

TEA issued guidance to school districts. Beginning with the October 2017 FSP formula payment, TEA will increase the amount of state aid to districts that (1) have additional ADA and (2) apply to TEA.

To date, only six districts have applied for adjustments, with a total of 324 students ADA. These districts include Calallen ISD, College Station ISD, Cuero ISD, Gregory Portland ISD, Splendora ISD, and Victoria ISD.

State cost: $5 million State savings: (-$5 million)

These costs will be shifted from FY 2019 to FY 2018.

State cost: $0 TEC §42.005(d). Average Daily Attendance.

Enrollment Decline

2 Districts will lose FSP formula funding due to student enrollment declines caused by Hurricane Harvey during the 2017–2018 school year.

Is this currently a legally required cost to the state? Yes. With legislative approval, TEA has agreed to hold districts harmless for 2017–2018 enrollment declines that would otherwise decrease FSP state formula funding.

No.

With legislative approval, on October 9, 2018, TEA issued a To the Administrator Addressed Letter providing an ADA hold harmless option for 152 initially identified school districts and charter schools

Lost recapture state revenue: $33 million

Chapter 41 districts pay recapture during the 2017–2018 school year.

State cost: $66 million

$66 million is the estimated amount in additional state aid that will be paid to Chapter 42 districts during September 2018 (FY 2019) FSP settle-up as a result of holding

State cost/lost recapture revenue: $99 million

TEC §42.005(d). Average Daily Attendance.

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A


B


C



E

Legal Authority

F

Issue: School districts and charter schools with enrollment losses during the 2017–2018 school year will have lower average daily attendance (ADA). ADA is a major component in determining FSP formula funds as Texas provides funding on a per ADA basis. Thus, a decline in ADA in the 2017–2018 school year would normally result in the following:

1. For Chapter 42 districts, a loss of FSP funds in September 2018 (FY 2019) during FSP settle-up for the 2017–2018 school year.

2. For Chapter 41 districts, an increase in recapture made during the 2017–2018 school year.

Legislative solution: TEA will hold school districts and charter schools meeting certain qualifications harmless for their loss of ADA during the 2017–2018 school year. This will encourage districts to avoid reducing school personnel throughout the 2017–2018 school year. This is a one-time adjustment for the 2017–2018 school year.

As of February 20, 2018, TEA has approved 76 districts as eligible for the hold harmless option.

that (1) had damage to at least one facility, or (2) had instructional facilities that were closed for nine or 10 hurricane-related waiver days. The school district or charter school must complete the Governor’s Commission to Rebuild Texas Worksheet.

As of February 20, 2018, TEA has approved 76 districts as eligible for the hold harmless option.

TEA will continue to monitor to ensure that qualifying districts are held harmless for ADA losses.

school districts harmless for 2017–2018 enrollment declines.

TEA will request a supplemental appropriation for the state aid portion during the 86th Texas Legislature.

2017–2018 School Year Tax Issues

3a Districts which have not ordered re-appraisals may experience a loss of maintenance and operations (M&O) local property tax revenue during the 2017–2018 school year.

Is this currently a legally required cost to the state? No.

Issue: School districts may experience losses in M&O local property tax revenue during the 2017–2018 school year due to delayed and uncollected tax collections. TEA collected district data and currently estimates that local M&O property tax revenue collections will be approximately $150 million less than anticipated.

Potential legislative solution: The legislature must decide whether it wants to hold school districts harmless for the $150M loss of anticipated local property tax revenue during the 2017–2018 school year.

Yes.

The legislature must decide whether it wants to hold school districts harmless for the loss of anticipated local property tax revenue during the 2017–2018 school year.

Potential state cost: $150 million

State cost: N/A.

This is covered in the 2018–2019 school year tax issues in row 6 below.


TEC §42.2523. Adjustment for Property Value Affected by State of Disaster.

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A


B


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Legal Authority

F

3b Districts that have re-appraised their property for the 2017 will realize losses in SY 2018 tax collections as a result of the re-appraisals


Issue: Twelve school districts accounting for 26% of the affected districts property value have ordered reappraisals for the 2017 Tax year. These districts will experience losses in M&O local property tax revenue during the 2017–2018 school year due to lost tax collections. TEA collected district data and currently estimates that for these districts local M&O property tax revenue collections will be approximately $150 million less than anticipated.

YES

The legislature could choose to hold these districts harmless for the lost collections as a result of the re-appraisal

Potential state Cost:

$150 million

State Cost: N/A



TEC §42.2523. Adjustment for Property Value Affected by State of Disaster

4 Districts could experience a loss of local interest and sinking (I&S) property tax revenue during the 2017–2018 school year and default on their debt payments.


Issue: The local I&S property tax revenue provides funds for the payment of the debt that districts issue to finance facilities and other capital expenditures. TEA anticipates decreases in local I&S property tax revenue but is not aware of any district that is in jeopardy of not making its I&S payments.

TEA solution: TEA is not aware of any district that is in jeopardy of not making its I&S payments and has no recommendation to assist districts at this time.

Note: Charter schools do not levy taxes.

No.

TEA will continue to monitor, but is not aware of any district that is in jeopardy of not making its I&S payments.

State cost: $0 State cost: N/A.


State cost: $0 TEC §42.2523. Adjustment for Property Value Affected by State of Disaster.

2018–2019 School Year Tax Issues

5a Un-reappraised districts will not receive their originally estimated amount of maintenance and operations (M&O) property tax revenue due to property value declines caused by Hurricane Harvey. This could cause the district to lay off personnel prior to the 2018–2019 school year.

Yes.

. The legislature must determine whether to hold districts harmless for the loss of anticipated property tax revenue due to property value

State cost: N/A

This is covered in the 2017–2018 tax information above.

Potential state cost: Between $500 million and $1 billion (TEA estimate of the difference between the originally anticipated local property tax revenue and currently

Potential state cost: Between $500 million and $1 billion

TEC §42.2523. Adjustment for Property Value Affected by

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A


B


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Legal Authority

F

Is this currently a legally required cost to the state? No. There is no state obligation to make up for maintenance and operations (M&O) property tax revenue declines caused by Hurricane Harvey.

Issue: Un-reappraised districts will not receive their originally estimated amount of maintenance and operations (M&O) property tax revenue due to property value declines caused by Hurricane HarveyPotential legislative solution: The legislature must determine whether to hold districts harmless for the loss of anticipated property tax revenue due to property value declines. TEA estimates that the amount necessary to hold districts harmless for the loss of local property tax revenue is between $500 million and $1 billion.

declines. TEA estimates that the amount necessary to hold districts harmless for the loss of local property tax revenue is between $500 million and $1 billion.

estimated local property tax revenue).

There is currently no state obligation to make up for maintenance and operations (M&O) property tax revenue declines caused by Hurricane Harvey.

The legislature will decide whether it wants to hold school districts fully or partially harmless for the loss of anticipated local property tax revenue during the 2018–2019 school year.

TEA estimates that the amount necessary to hold districts harmless for the loss of local property tax revenue is between $500 million and $1 billion.

State of Disaster.

5b Districts that reappraised their property will have lower local property tax collections and therefore, will receive more state formula funding.

Is this currently a legally required cost to the state? Yes. TEA is required by the FSP formulas to provide increased FSP formula state aid for districts that reappraised their property value and lost local property tax revenue as a result.

Issue: Beginning with the 2018–2019 school year, the state is legally obligated to “make-up” state aid (state share) for any reported loss of local property tax revenue on reappraised 2017 tax year property.

TEA solution: TEA will pay additional state aid to make up for the loss of local property tax revenue. TEA will ask for a supplemental appropriation for the difference between amounts appropriated and actual district entitlements.

TEA is aware of 12 school districts that have voted to reappraise their 2017 taxable property values: Conroe ISD,

No.

TEA will pay additional state aid to make up for the loss of local property tax revenue.

TEA will ask for a supplemental appropriation for the difference between amounts appropriated and actual district entitlements.

State cost: $0

N/A. This is covered in the 2017–2018 tax information above.


Combined, these districts account for 29 percent of the tax base of the affected districts. TEA’s $150 million estimate assumes a seven-percent decline in value due to reappraisals.


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Fort Bend ISD, Humble ISD, Katy ISD, Lamar CISD, La Porte ISD, Magnolia ISD, Montgomery ISD, New Caney ISD, Splendora ISD, Spring Branch ISD, and Willis ISD.

6 As property values have declined, districts may be required to increase their local interest & sinking (I&S) tax rates to cover debt service payments during the 2018–2019 school year. This may result in higher local tax bills in certain districts.


Issue: School districts are required to levy an I&S tax rate to provide enough property tax revenue to pay for the debt for their facilities and other capital expenditures. School districts may experience losses in I&S local property tax revenue during the 2018–2019 school year and be required to raise I&S tax rates. This may result in higher local tax bills in certain districts.

Potential legislative solution: The legislature must determine whether to hold districts harmless so that they are not required to raise their tax rates. TEA estimates the amount necessary to hold districts harmless for the loss of I&S local property tax revenue is $132 million.

Note: Charter schools do not levy taxes.

Yes.

The legislature will decide whether it wants to hold school districts fully or partially harmless so that they will not have to increase local I&S property taxes rates.

TEA estimates the hold harmless amount required to by paid to districts to be $132-$260 million.

State cost: N/A.

This is covered in the 2017–2018 school year tax issues (above).

Potential state cost: $132-$260 million

The legislature will decide whether it wants to hold school districts fully or partially harmless so that they will not have to increase local I&S property taxes rates.

Potential state cost: $132-$260 million

The legislature could consider options to help mitigate the tax increase. However, I&S rates are adopted in the summer of 2018.

TEC §45.003 Bonds and Tax Elections.

TEC §45.052 Guaranteed Bonds.

TAX §26.08a Election to Ratify School Taxes

7 Districts with enrollment losses during the 2017–2018 school year will have lower average daily attendance, which will in turn decrease the amount of their potential Instructional Facilities Allotment (IFA) or Existing Debt Allotment (EDA) state aid during the 2017–2018 school year settle-up that will occur in September of 2018 (FY 2019).


Issue: Approximately 39 of the 130 affected school districts receive approximately $47 million in state FSP aid for the IFA or EDA. These programs help districts pay for the debt they incur for facilities and other capital expenditures.

No.

1. For the 2017–2018 school year, TEA will hold school districts meeting certain qualifications harmless for their loss of ADA. This is anticipated to largely stabilize their IFA and EDA state aid amounts. This is a one-time adjustment for the 2017–2018 school year. See row 2 above.

2. For the 2018–2019 school year, qualifying districts that reappraised will receive additional EDA and IFA state

State cost: N/A. Cost is included in $100 million ADA hold harmless in row 2 above.

TEA will hold school districts meeting certain qualifications harmless for their loss of ADA. This will largely stabilize their IFA and EDA amounts. This is a one-time adjustment for the 2017–2018 school year. See row 2 (above).


Qualifying districts that reappraised will receive additional EDA and IFA state aid funding to make up for lost local property value and property tax revenue. See 5b above.


TEC §46.003 IFA

TEC §46.032 EDA

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A


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Legal Authority

F

TEA solution: 1. For the 2017–2018 school year, TEA will hold school

districts meeting certain qualifications harmless for their loss of ADA. This will largely stabilize their IFA and EDA state aid amounts. This is a one-time adjustment for the 2017–2018 school year. See row 2 above.

2. For the 2018–2019 school year, qualifying districts that reappraised will receive additional EDA and IFA state aid funding to make up for lost local property value and property tax revenue. See row 5b above.

Note: Charter schools are not eligible for IFA or EDA funding.

aid funding to make up for lost local property value and property tax revenue. See row 5b above.

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A


B


C



E

Legal Authority

F

Facilities Issues

8 Chapter 41 districts that experienced facilities damage due to Hurricane Harvey may not have enough funds to cover their recapture payments.

Is this currently a legally required cost to the state? Yes, in forgone recapture funding to the state treasury.

Issue: Chapter 41 school districts that have property damage can apply for a reduction or elimination in their recapture payment to the state for the 2017–2018 and 2018–2019 school years for any facility damage costs not covered by insurance or FEMA. Importantly, however, districts cannot recover more than their recapture payment amounts (but see row 9 below).

TEA solution: Chapter 41 districts with eligible remediation costs can offset recapture payments by applying to TEA in the 2017–2018 and 2018–2019 school years. To date, TEA has received no applications.

No.

Chapter 41 districts can apply to TEA for disaster aid assistance to reduce their recapture payments for the 2017–2018 and 2018–2019 school years.

Facilities replacement costs obtained by TEA are estimated at $900 million, $300 million of which would be realized by Chapter 41 districts. FEMA and insurance should cover 90 percent of the anticipated losses, which implies a total of $30 million in uncovered costs for Chapter 41 districts.


Loss of budgeted recapture to state treasury.

Due to TEA requirements in documenting unremediated losses, TEA anticipates the majority of losses will be realized in the 2018–2019 school year


Loss of budgeted recapture to state treasury.


TEC §41.0931 Disaster Remediation Costs.

9 Chapter 42 districts that experienced facilities damage due to Hurricane Harvey can receive facilities assistance, and Chapter 41 districts that experienced facilities damage due to Hurricane Harvey can receive facilities assistance beyond their recapture payment amounts.

Is this a legally required cost to the state? No.

Issue: The Texas Education Code provides that (1) Chapter 42 districts can receive facilities assistance, and (2) Chapter 41 districts can receive facilities assistance beyond their recapture payment amounts (see row 8 above), only if there is an FSP surplus in the fiscal year. Even if there is an FSP surplus, TEA must first use the surplus to finance special education camera needs.

Note: Based on preliminary information, TEA has learned that FEMA may cover up to 90 percent of uninsured loss, leaving districts with at least a 10 percent uninsured and uncovered loss.

Yes.

TEA is encouraging districts to work with their insurance providers and FEMA to determine unreimbursed damage amounts and turn in applications to TEA. To date, TEA has received no qualifying applications.

Facilities replacement costs obtained by TEA are estimated at $900 million, $600 million of which would be realized by Chapter 42 districts. FEMA and insurance should cover 90 percent of the anticipated losses, which implies a total of $60 million in uncovered costs for Chapter 42 districts.

Potential increased state aid payments: $30 million

This cannot happen unless TEA borrows money from FY 2019 to create an FSP surplus in FY 2018. This has never been done before.

Potential increased state aid payments: $30 million

$0 unless there is a sufficient FSP formula surplus in FY 2019.

The legislature could provide additional funding as part of a supplemental appropriation during the 86th Texas Legislature.


TEC §42.2524 Reimbursement for Disaster Remediation Costs.

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A


B


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Legal Authority

F

Potential legislative solution: For school year 2017–2018, the only potential legal mechanism TEA can use to assist districts is to borrow money from FY 2019 and declare an FSP surplus in FY 2018. This has never been done before. Further, the surplus would first be required to be used for special education camera needs.

For school year 2018–2019, the legislature could provide additional funding as part of a supplemental appropriation during the 86th Texas Legislature.

Other Funding Issues 10 Students will be newly eligible to generate State

Compensatory Education (SCE) FSP formula funds, which will increase FSP state formula costs.


Issue: Data from the Texas Department of Agriculture (TDA) National School Lunch Program (free and reduced-price lunch) indicates that districts will have more students qualifying for the FSP formula SCE weight during the 2017–2018 and 2018–2019 school years.

TEA solution: For the 2017–2018 school year, TEA estimates that 80,500 additional students will qualify for the SCE weight in the school finance system. Consistent with current practice, TEA updated its FSP formulas related to SCE in February of 2018. As a result, affected districts recognized increases to state aid for SCE–identified students beginning with their February 2018 FSP payments.

No.

TDA collects and provides National School Lunch Program student eligibility data to TEA. Per customary practice, TEA incorporated TDA data into the FSP system for the 2017–2018 school year during February of 2018. Thus, affected districts recognized increases to state aid beginning with their February 2018 FSP payments.

State cost: $103 million State cost: $44 million

Costs will vary depending on the number of additional students eligible for free or reduced-price lunch.


TEC §42.152. Compensatory Education Allotment.

11 Districts will incur unreimbursed storm recovery costs.


Issue: Affected districts may face storm recovery expenditures for transportation, additional counselors, student mental health needs, and overtime for auxiliary and maintenance staff.

Yes.

The legislature could provide additional funding as part of a supplemental appropriation during the 86th Texas Legislature.

Potential state cost: $0

All additional costs are borne by school systems.


All additional costs are borne by school systems.

The legislature could provide additional funding as part of a supplemental appropriations bill during the 86th Texas Legislature.


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F

Potential legislative solution: The legislature could provide additional funding as part of a supplemental appropriation during the 86th Texas Legislature.

12 Education service centers (ESCs) are incurring additional costs.

Is this currently a legally required cost to the state? No, but TEA has pledged assistance.

Issue: ESCs are incurring substantial costs as they help districts with hurricane-related remediation.

TEA solution: TEA has pledged to help the ESCs, possibly by using its FSP transfer authority in Rider 25 of the 2018–2019 General Appropriations Act.

No.

TEA will continue to collect hurricane-related costs from the ESCs and report to the legislature.

State cost: $1 million State cost: $1 million State cost: $2 million

40

Understanding the 15%in Rider 78

EA R LY C HILD HOOD E D U C AT ION D IV IS IO N

TAMAL A OLSBY AN D CO DY S UMME RVILLE

COPYRIGHT © TEXAS EDUCATION AGENCY, 2018. ALL RIGHTS RESERVED. 42

Agenda Rider 78 – general information

High-quality components and the 15%

General recommendations regarding the 15%

Resources

43

Article III, Rider 78 FSP Formula Funding for High-Quality Prekindergarten Programs. Included in amounts appropriated above in Strategy A.1.1, FSP - Equalized Operations, is an estimated $1,580 million in the 2018-19 biennium for formula funding entitlement for pre kindergarten programs. Of this amount, the Commissioner shall ensure that school districts and charter schools receiving these funds shall use not less than 15 percent of their entitlement, an estimated $236 million statewide, to implement prekindergarten consistent with the requirements of a High-Quality Prekindergarten program, as established in Education Code, §§29.167 - 29.171, and consistent with the provisions of Education Code, Chapters 41 and 42.

44

What does it mean? In simpler language:

The Commissioner is to ensure that at least 15% of prekindergarten FSP funds of each school district and charter school are used to implement high-qualityprekindergarten components.

45

Does Rider 78 apply to your program? Yes, if:

You are a school district or charter school

You serve 4-year-old children who are eligible for freeprekindergarten

You receive FSP funding from Texas to operate

46

What does the 15% refer to?

Existing funding - not additional funding

Foundation School Program (FSP)

Eligible for free prekindergarten

4-year-olds

Average daily attendance

47

Questions

48

High Quality Prekindergarten

49

High-QualityPrekindergarten Components Curriculum

Student progress monitoring

Teacher qualifications and Professional development

Teacher to Student Ratio

Family engagement plan

Program evaluation

Data Reporting

50

15%: Curriculum Implementing expenditures included in 15%:

Costs associated with curriculum implementation, i.e.curricular kits/collections, games and teacher guides

Curricular support materials/equipment, i.e. books,manipulatives and classroom furniture

Supplemental curriculum

51

15%: Student Progress Monitoring(Prekindergarten and Kindergarten) Implementing expenditures included in 15%:

Costs associated with implementing student progressmonitoring, i.e. tool charges per student and printing costs

Substitute costs to allow teachers to conduct student progress monitoring

Technology tools/equipment to conduct student progress monitoring

52

15%: Teacher Qualifications and PD Implementing expenditures included in 15%:

Costs associated with achieving or maintaining an"additional qualification," i.e. costs associated withgetting a CDA, etc.

Costs associated with any early childhood education-specific professional development done forprekindergarten teachers and/or paraprofessionals

Costs associated with implementing prekindergarten mentoring/coaching as part of the district's/charter'sprekindergarten professional development activities,i.e. training of prekindergarten mentors/coaches and salaries of prekindergarten mentors/coaches

53

15%: Teacher-to-Student Ratio Implementing expenditures included in 15%:

The portion of all prekindergarten paraprofessionalsalaries that are paid for by FSP funding for eligible 4-year-olds

Please note: Pre-existing prekindergarten teachers' salaries should not be counted as part of the 15% referenced in Rider 78.

54

15%: Family Engagement Implementing expenditures included in 15%:

Costs associated with prekindergarten familyengagement activities, i.e. meeting costs, speaker costsand printing costs

Family engagement personnel salaries (prekindergartenfamily engagement should be sole job responsibility)

55

15%: Program Evaluation Implementing expenditures included in 15%:

Costs associated with conducting a program evaluation, i.e. meeting costs and printing costs

Costs associated with a 3rd party evaluator

Costs associated with informing parents of the results of the program evaluation, i.e. meeting costs and printing costs

56

15%: Data Reporting There are no recommended expenditures associated withdata reporting.

57

Questions

58

General Recommendations Regarding the 15% In implementing the high-quality prekindergarten components referenced in Rider 78, districts/chartersshould:

Implement the high-quality prekindergarten components (TEC 29.167 - 29.172)

Plan ahead

Develop a way to document the 15% expenditures

59

FAQs General 15% FAQs – https://tea.texas.gov/Academics/Early_Childhood_Education/General_15__FAQ/

Calculating 15% FAQs – https://tea.texas.gov/Academics/Early_Childhood_Education/Calculating_15__FAQ/

60

Questions

61

TEA -Early Childhood Education Division Jacquie Porter, Director

[email protected]

Sylina Valdez, Manager [email protected]

Scott Bodnar, Manager [email protected]

Howard Morrison, Statewide Coordinator

[email protected]

Tamala Olsby, Program Specialist: Quality

[email protected]

Anna Gu, Program Specialist: PreK Partnerships

[email protected]

Cody Summerville, Program Specialist [email protected]

62

TEA Texas Education Agency

© 2018 by the Texas Education Agency Copyright © Notice. The Materials are copyrighted © and trademarked ™ as the property of Texas Education Agency (TEA) and may not be reproduced without the express written permission of TEA except under the following conditions:

1) Texas public school districts, charter schools, and education service centers may reproduce and use copies of the Materials and Related Materials for the districts' and schools' educational use without obtaining permission from TEA.

2) Residents of the state of Texas may reproduce and use copies of the Materials and Related Materials for individual personal use only, without obtaining written permission from TEA.

3) Any portion reproduced must be reproduced in its entirety and remain unedited, unaltered, and unchanged in any way.

4) No monetary charge can be made for the reproduced materials or any document containing them; however, a reasonable charge to cover only the cost of reproduction and distribution may be charged.

Private entities or persons located in Texas that are not Texas public school districts, charter schools, or education service centers, or any entity, whether public or private, educational or non-educational, located outside the state of Texas must obtain written approval from TEA and will be required to enter into a license agreement that may involve the payment of a licensing fee or a royalty.

For information, contact the Office of Copyrights, Trademarks, License Agreements, and Royalties, Texas Education Agency, 1701 N. Congress Ave., Austin, Texas, 78701-1494; phone 512-463-7004, email: [email protected].

63

Continued Political Rhetoric• James Quintero, Texas Public Policy Foundation, American‐Statesman Op‐Ed, 4‐2‐18• “Austin’s education lobby is pushing the narrative that public schools are underfunded and the state is to blame.”

• “To begin, public schools have sufficient funding. In the 2015‐16 school year alone, Texas school districts spent a total of $64.8 billion on 5.3 million schoolchildren. That level of expenditure has grown by more than $20 billion over the last 10 years despite only a modest increase in student enrollment.”

© MOAK, CASEY AND ASSOCIATES 36April 2018

64

Facts• 2015‐16

• $64,767,380,510 Total Expenditures

• 5,281,243 enrolled students• Is a 17.2% increase in students “slight”?

• Can the state absorb 776,600 students with no additional funding? That’s the combined enrollment of Houston, Dallas, Cy‐Fair, Northside, Fort Worth, and Austin combined, or more than the smallest 930 school districts combined

• After excluding capital outlay, debt service, and food service, expenditures per enrolled student have increased only 2.2% per year

• 2005‐06• $43,375,742,026 Total Expenditures

• 4,504,627 enrolled students


65

Quintero continues• “On a per pupil basis, there’s enough money in the system to spend $12,250 on every student. For the average classroom of 20 students, that yields almost $250,000 for every nine‐month school year. Yet, most of us recognize that much of that money isn’t reaching the classroom.”


66

Facts• $12,264 per student

• $2,822 of that for capital outlay and debt service, and cannot be legally spent on instruction

• $529 of that for food service, and cannot be legally spent on instruction

• $929 of that for plant maintenance and operations – that is the classroom

• The $250,000 per supposed classroom reduces to $178,240 after excluding funds that cannot legally be spent on instruction

• Actual student to teacher ratio is 15.26 to 1, so “per classroom” spending is actually $135,997


67

Facts• Of the $135,997 “per classroom”

• $14,165 is for plant maintenance, including utilities, custodial services, grounds maintenance, etc.

• $4,065 is for transportation to get students to school each day

• $5,099 is for guidance and counseling services

• $1,725 is for librarians

• $2,765 is for data processing

• $1,282 is for security

• $8,296 is for campus administration, including principals and related staff, attendance clerks, etc.

• $81,137 (60%) is for instruction, including teachers, aides, and instructional materials and equipment


68

Quintero on Facilities• “Consider that during the 2015‐16 school year, school districts spent $7.3 billion on debt service, costing educators 11 cents out of every dollar.”

• “If you think that all these debts were issued out of necessity, remember that Texas is home to several of the nation’s most‐expensive high school stadiums, including: Cy‐Fair ISD’s Berry Center ($84 million); Katy ISD’s Legacy Stadium ($70.3 million); McKinney ISD’s as‐yet‐unnamed stadium ($69.9 million) and its literal down‐the‐road neighbor, Allen ISD’s Eagle Stadium ($60 million).”


69

Facts• The “11 cents of every dollar” cannot be legally spent on teachers • Debt service funds are separately authorized, and do not “cost” teachers anything

• Those “most‐expensive high school stadiums” total to $284 million, and were constructed over 11 years

• Total capital outlay over those 11 years has been $78.363 billion; those stadiums account for 0.36%

• The vast majority of capital outlay is funded with locally approved voter authorized debt


70

Quintero on Administration• “Administrative bloat is also a big problem. From 1993 to 2015, Texas’ student population grew by 48 percent while the number of teachers grew by 56 percent. In contrast, the number of nonteaching staff positions increased by 66 percent and many of those jobs cost taxpayers a pretty penny.”


71

Facts• The “administrative bloat” apparently includes, librarians, nurses, counselors, and others with direct student contact, along with professional administrators and non‐professional staff.

• Professional support staff counts are 1 for every 5.18 teachers

• Professional administrative roles in PEIMS totaled 26,801 in 2014‐15, or 1 for every 12.77 teachers

• Non‐teaching salaries are on average 69% of the average teacher salary


72

Teacher Compensation PracticesSENATE EDUCATION COMMITTEE, MARCH 26, 2018

73

Key Takeaways

(1) Good teachers should be paid SIGNIFICANTLY more in order to improve retention, especially at high poverty and rural schools.

(2) There are reasonable processes that can be used to define exactly what "Good" and "Best" teachers are, but they aren't easy or without controversy:

• Best if locally developed and involve some statewide calibration• Small, rural districts need a process managed by a third-party given

capacity limitations

(3) A policy framework will require a willingness to make a long term commitment via funding formulas, not one time grants.

Key Takeaways On Teacher Compensation

3/26/2018 2 74

Our Strategic Priorities

Recruit, support, retain teachers and

principals

Build a foundationof reading and

math

Connect high school to career and

college

Improve low-performing schools

Enab

lers

Stra

tegi

c prio

ritie

s

Strengthen organizational foundations(resource efficiency, culture, capabilities, partnerships)

Ensure compliance, effectively implement legislation and inform policymakers

Increase transparency, fairness and rigor in district andcampus academic and financial performance

Every child, prepared for success in college, a career or the military.

3/26/2018 3 75

Recruit, support, retain teachers and

principals

Build a foundation of reading and

math

Connect high school to career and

college

Improve low-performing schools

Enab

lers

Stra

tegi

c prio

ritie

s

Strengthen organizational foundations(resource efficiency, culture, capabilities, partnerships)

Ensure compliance, effectively implement legislation and inform policymakers

Increase transparency, fairness and rigor in district andcampus academic and financial performance

Every child, prepared for success in college, a career or the military.

Our Strategic Priorities

3/26/2018 4 76

Recruit, Support and Retain Teachers and Principals

3/26/2018 5 77

Recruitment Challenges

3/26/2018 6 78

Country’s Best Students Remain Uninterested

In a 2010 report, McKinsey & Co found:

• 23% of new teachers in the US come from the top 1/3rd

of their college graduating classes.

• 14% of new teachers in high poverty schools come from the top 1/3rd of their graduating classes.

• 100% of new teachers come from the top 1/3rd of their graduating classes in Singapore, Finland, and South Korea.

vs.

3/26/2018 7 79

Competitive Compensation A Key Factor

0 20 40 60 80%

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48

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This job would be challenging in a satisfying way

Jobs in this career would prepare me for almost any job I might take in the future

My supervisor in this job would help me improve my performance

Only top students get jobs in this field

This job attracts the type of people I would want to work with

This job would provide high quality training and support to help me imporve my performance on the job

People in this job are considered successful

I could support a family with this career

In this job, people get promoted when they do well

There are opportunities to continue to advance professionally in this career

This job would allow me to work in a well resourced, professional environment

This job offers a salary that would increase substantially over the next seven to ten years

This job pays appropriately for the skills and effort I would bring

This job offers a competitive starting salary

If I were to do well in this job, it would be rewarded financially

Compensation

Professional development

Environment/culture

DIFFERENCE BETWEEN TEACHING AND PREFERRED OCCUPATIONJOB ATTRIBUTE

3/26/2018 8 80

Retention Challenges

3/26/2018 9 81

Teacher Experience

Teacher Experience

3/26/2018 10 82

Teacher Salaries Peak Late

A Slower ClimbIt is well know that teachers earn less than doctors and lawyers. However, few realize that most doctors and lawyers make up much of the gap between their initial and peak earnings by their early 40s, while teachers’ earnings rise slowly and peak when they reach their mid-50s and are nearretirement.

3/26/2018 11 83

Texas Compensation Strategy Examples

3/26/2018 12 84

Dallas ISD

Comprehensive change to teacher evaluation system impacting all teachers,

based on three components:supervisor observations, student growth,

and student survey results.

Teacher salaries are explicitly tied to performance appraisal, as opposed to the

years-of-service salary schedule.

High performing teachers offered additional $10k stipends to teach at

highest needs campuses, recruited enmasse.

Lubbock ISD

District-wide group & individual performance bonuses eligible to staff and

teachers.

Group bonuses include campus-wide and content-area student growth. Individual

bonuses awarded to teachers in core-content areas based on growth of their

students.

High performing teachers eligible for $15k of bonuses in high needs campuses vs $3k

in other campuses.

Austin ISD

Offers incentives and support for teachers to pursue National Board Certified

Teachers. NBCT is a rigorous certification process covering all teaching areas that

takes anywhere from 12-24 months, and NBCT teachers have been shown to have a

positive impact on student growth.

Support includes covering up front costs and cohort support for those in process. Stipends of $2k per year thereafter are

offered while the certification is maintained, regardless of campus

placement.

Current Teacher Performance Compensation Models

3/26/2018 13 85

Implemented an innovative 3-tiered teacher performance pay

model to highlight work of teachers and campuses that were closing

academic gaps

Option 2

Longview ISD Mathis ISD Instituted longevity bonuses for teachers and administrators that

include $850 per year increases for the first 10 years of employment

with the district f

Pharr-San Juan-Alamo ISD

Performance pay implemented based on a teacher effectiveness rubric that

requires both observation and student growth data.

Seymour ISD

Provides a comprehensive benefits package to teachers that includes a 403b contribution, an HSA account,

and a stipend towards gym memberships.

Flatonia ISD Retention stipends provided annually

to staff based on years with the district. An “Early Notice Exit

Incentive” provided to teachers transitioning to support recruitment

efforts.

Era ISD Retention and longevity stipends

available to all teachers. An “Academic Coordinator” stipend was

created to incentivize the district’s highest performing teachers to stay

in the classroom.

Current Teacher Performance Compensation Models

3/26/2018 14 86

U.S. Compensation Strategy Examples

3/26/2018 15 87

Example from TN: Go Slow To Go Fast

2010 2014201320122011

TDOE gathered stakeholder input about how the state/districts could use compensation to increase teacher effectiveness and equitable access

All districts in Tennessee adopted differentiated compensation schemes—based on one of four models designated by TDOE:• New roles for

teachers• Incentives for

hard-to-staff subject areas

• Performance pay• New salary

structures

A total of 16 districts piloted compensation plans

3 additional districts launched compensation plans

TN state differentiated pay policy revised• Provided four

intensive support sessions to 34 districts

• Then moved to building statewide support model

Used early adopters to refine the model, identify what works, and identify key conditions for success

Source: Reform Support Network, ‘Implementing Differentiated Compensation Systems for Educators’

3/26/2018 16 88

DC Impact

How does IMPACTplus compare with the previous compensation system? • Under the previous contract, the starting salary was $42,369 and it took 21 years to achieve the

maximum salary of $87,584. Under IMPACTplus, a Highly Effective teacher has the potential to earn $79,975 in her/his first year, and can achieve the maximum salary of $131,540 in just nine years.https://does.dc.gov/sites/default/files/dc/sites/dcps/publication/attachments/2013-2014%20IMPACTplus%20For%20Teachers.pdf

Evidence from DC Impact – National Bureau of Economic Research… results indicate that dismissal threats increased the voluntary attrition of low-performing teachers by 11 percentage points (i.e., more than 50 percent) and improved the performance of teachers who remained by 0.27 of a teacher-level standard deviation. We also find evidence that financial incentives further improved the performance of high-performing teachers (effect size = 0.24).http://www.nber.org/papers/w19529

3/26/2018 17 89

International Compensation Strategy Examples

3/26/2018 18 90

Differentiated Compensation: Singapore

LeadershipTrack

Senior SpecialistTrack

TeachingTrack

Classroom Teacher

Director General of Education

Director

Deputy Director

Cluster Superintendent

Principal

Vice Principal

Head of Department

Subject Head / Level Head

Lead Specialist

Senior Specialist 2

Senior Specialist 1

Principal Specialist

Chief Specialist

Principal Master Teacher

Master Teacher

Lead Teacher

Senior Teacher

Key difference between the Singapore system and historic approaches to

‘career ladders’ in the US—a meritocratic system for determining

performance & potential

3/26/2018 19 91

Differentiated Compensation: Shanghai

Third-grade /Novice Teachers

Senior-grade / Master teachers

First-grade /Advanced Teachers

Second-grade / Intermediate

Teachers

Coaching &Developing othersDirect

InstructionTIMEUSE

2 levels of pay 3 levels of pay 3 levels of pay

An extraordinary honor that is only bestowed up 0.1% of teachers after careful district consideration

• Conduct research

Promoted to 2nd grade after:

• 5 years of teaching• A school-based

evaluation

Promoted after: • 5 years of service

at 2nd Grade• An internal school-

based evaluation • And an external

district-based evaluation

3/26/2018 20 92

Key Lessons on Merit Pay

Several attempts at “merit pay” have been conducted around the country that have shown little impact on student achievement, teacher retention, and teacher recruitment.

Key Lessons To Take Into Consideration:• Size matters – small dollar amounts lead to limited impact on behavior

• Clarity matters – if teachers don’t understand how the incentives work, the incentives don’t change behavior

• Calibration matters – evaluations of performance must be rigorous and consistent, otherwise grade inflation occurs disconnecting the incentives from the desired outcomes; Money for all is different than money aligned to student outcomes

• Eligibility: The More The Better – if the incentive is limited to only a few teachers at a campus, teachers have a disincentive to work together

• Permanence matters – one-time offerings often disappear when funding dries up, having limited impact on behavior

• A Comprehensive Design is better – add-on bonuses to otherwise pre-existing evaluations and salary schedules have less impact on behavior than more comprehensive evaluation & salary structure changes

• Focus On The Need – Recruitment and retention are not universally problematic within the state, so incentives designed should be designed with that in mind (ex: higher salaries for serving in high needs schools)

3/26/2018 21 93

Appendix

3/26/2018 22 94

• Tend to be narrowly structured for achieving short term outcomes:

• Ex: If you get a significant test score gain, you get a one-time bonus

• Tend to be bolted on to existing compensation systems:• Ex: years of service salary schedule remains in place, so

the core value rewarded by the compensation system is still one of seniority, but with bonuses

• Typically rests on an assumption that performance of existing employees can be improved with financial incentives:

• Ex: our teachers would get better student outcomes if we gave them bonuses to raise student outcomes

• Not necessarily aligned with other practices to grow employee capacity

• Ex: teacher evaluations and professional development continue as they have, but merit bonuses are also available

“Merit Pay”“Differentiated Compensation” VS

• Tends to be broadly structured around long term organizational needs:

• Ex: Based on summative performance evaluations, you get a raise or promotion

• Tends to be designed as holistically new compensation system• Ex: Seniority-based salary schedules replaced with new

schedule based on evaluation rating and/or expanded leadership duties and/or placement needs

• Typically focused primarily on retaining more top performers over time, and attracting similar performers

• Ex: outcomes for students will improve over time if the makeup of our teaching force improves over time, especially for our neediest schools

• Typically foster aligned changes in evaluation & coaching practices

• Ex: since employee raises & job promotions are now tied to summative evaluations, everyone has an interest in getting better in the areas evaluated

Differentiated Compensation vs. Merit Pay

3/26/2018 23 95

In spring 2017, Dallas ISD teachers answered a survey about this approach to evaluation & compensation:

“My salary should be based on how effective I am as an educator.”

6716 responses• Strongly Agree - 23.0%• Agree - 38.7%• Neutral - 23.6%• Disagree - 9.4%• Strongly Disagree - 5.4%

14.8% Disagree

61.7% Agree

Dallas ISD Teacher Options

• 3/26/2018 24 96

Dallas ISD

• 3/26/2018 25 97

Dallas ISD ACE Results

• 3/26/2018 26 98

45 45 45

53 52

62

0

10

20

30

40

50

60

70

All Subjects Reading Math

All Students - Approach Grade Level or Better

2016 2017

Lubbock ISD – Impact of Targeted Performance Pay

Highest performing teachers (as judged by gains of students on STAAR) given $10,000+ to stay at a high needs school

• 3/26/2018 27 99

Comparing Average Professional Salaries

Source: McKinsey Report: Closing the talent gap: attracting and retaining top-third graduates to careers in teaching, September 2010

• 3/26/2018 28 100

Projected Career Earnings Over Time

• 3/26/2018 29 101

Teacher Turnover

12.2 12.112.6

13.3

15.515.0

16.015.7 15.6

14.3

16.1

14.6

15.615.2

14.7

11.8 11.9

12.6

15.3

16.216.6 16.5

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

TEACHER TURNOVER RATE

Source: TEA

• 3/26/2018 30 102

Teacher Experience Over Time

In the span of 25 years, the percentage of teachers with more than three years of experience has dropped by 5.1% from 83.5% in 1991 to 78.4% in 2016.

1991 2000 2010 20161st Year Teachers 12,916 20,511 20,082 27,9992nd Year Teachers 11,159 17,794 22,224 24,4993rd Year Teachers 9,910 15,810 23,071 22,694

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

Num

ber o

f Te

ache

rs

*Teachers in their 4th year or more totaled 171,940 in FY1991, 214,112 in FY2000, 267,726 in FY2010, and 272,160 in FY2016. Source: Texas Education Agency PEIMS Data

• 3/26/2018 31 103

Trends In Teacher Student Ratios

1991 1996 2001 2006 2011 2016Student / Total Staff Ratio 8.6 8.1 7.5 7.6 7.4 7.7Student / Teacher Ratio 16.4 15.6 14.8 15.0 14.7 15.3

13.0

13.5

14.0

14.5

15.0

15.5

16.0

16.5

17.0

17.5

18.0

6.5

7.0

7.5

8.0

8.5

9.0

Stud

ent /

Teac

her R

atio

Stud

ent /

Tota

l Sta

ff Ra

tio

It does not appear larger class sizes are to blame for reductions in retention.

• 3/26/2018 32 104

Why Are Top Teachers Leaving The Profession?

In a 2012 report by TNTP, less than half of the top performing teachers surveyed were told they were high-performing by their school leadership, let alone compensated accordingly.

“State and district leaders should phase out quality-blind pay structures in favor of more flexible compensation systems that offer greater earnings potential for high-performing teachers early in their careers. As a rule of thumb, we recommend that Irreplacebles (high-performing teachers) be able to make a six-figure salary by the end of their sixth year of teaching.”

• 3/26/2018 33 105

Teacher Salary Distribution – All Teachers2015-2016 School Year

$0 to$19,999

$20,000 to$24,999

$25,000 to$29,999

$30,000 to$34,999

$35,000 to$39,999

$40,000 to$44,999

$45,000 to$49,999

$50,000 to$54,999

$55,000 to$59,999

$60,000 to$64,999

$65,000 to$69,999

$70,000 to$74,999

$75,000 to$79,999

$80,000 +

ALL TEACHERS 0.4% 0.3% 0.3% 1.4% 3.2% 7.8% 16.9% 33.2% 20.7% 8.7% 3.9% 1.7% 0.7% 0.8%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

Percentage of Teachers in Each Salary Bracket

• 3/26/2018 34 106

Experts Agree On The Need

The Texas Teacher Preparation Collaborative calls for a competency-based, tiered licensure system that differentiates performance and strengthens teaching as a profession

“Teachers need a pathway for career advancement that involves growth in professional skills and expertise, improves outcomes for students, and opens the door to greater responsibilities and opportunities.”

• 3/26/2018 35 107

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April 10, 2018

TO THE ADMINISTRATOR ADDRESSED:

Subject: House Bill 22 2018 Accountability Decisions Framework

The purpose of this letter is to communicate decisions regarding the construction of the 2018 state academic accountability system, established by House Bill (HB) 22 (85th Texas Legislature).

These decisions were informed by extensive feedback from educators and the public, including over 100 meetings and focus groups and countless individual communications gathered over the course of the last two years, which in turn were also reviewed and further refined by recommendations from the Accountability Policy Advisory Committee (APAC) and Accountability Technical Advisory Committee (ATAC).

TEA took this feedback into account when making decisions, in some cases significantly altering the system’s design (see attached description of some adjustments). These accountability system decisions have been summarized into the attached Decisions Framework document, which will serve as the basis for the 2018 Accountability Manual. The 2018 Accountability Manual is scheduled to be published as a proposed rule for further public comment in mid-May.

The HB 22 accountability framework sets the stage for a significant change in the way the state of Texas examines school performance, including an opportunity to shift our collective attention to a continuous improvement mindset, focused on achieving excellence for students, as opposed to complying with minimum performance standards. A few key design elements are worth noting:

Best of Progress or Achievement: The prior accountability system placed a premium on student achievement as opposed to progress, given that three out of the four indices were based on student achievement. The new HB 22 three-domain framework uses the better of Student Achievement or School Progress for all students, while factoring in a weighted rating for the performance of specific student groups in Closing the Gaps. This allows us to highlight districts and campuses where educators have achieved tremendous gains for their students, even if students started with lower levels of proficiency. This also means that the relationship between levels of student poverty and overall district and campus ratings in the HB 22 framework is significantly lower than the relationship between assessment passing rates and student poverty, as districts

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and campuses that demonstrate strong growth on their path to proficiency can still achieve the highest rating.

Holistic Measurement: The HB 22 framework continues our statewide focus on progress and achievement of students in the critical areas of reading and mathematics, but it also significantly broadens that focus to other measures of student achievement. When examining high schools and districts, the majority of the underlying rating is focused not on STAAR results but is instead focused on whether graduates are ready for college (verified in many ways, including SAT/ACT, AP/IB, dual credit, etc.), a career (verified if students have obtained a meaningful industry credential or have completed a sequence aligned to those credentials), or the military (verified if students have enlisted). At the elementary and middle school level, the HB 22 three-domain model is focused on reading and mathematics results on STAAR, but districts have the option of adding other key performance indicators for use in their local communities. A group of districts is currently working with TEA to help pilot this approach, with the goal of preparing a process available to all districts in time for campus-level A–F ratings under HB 22, which begin in 2019.

The Decisions Framework answers many but not all questions about the specific design of the HB 22 accountability system. The 2018 Accountability Manual will provide the remaining details of the accountability system. The manual will be posted online as a proposed rule in mid-May and will be finalized subject to public comment in late summer (see timeline below).

For districts and campuses impacted by Hurricane Harvey, an appendix to the 2018 Accountability Manual will be published as a proposed rule separately in June. This appendix will provide specific answers as to what adjustments to accountability determinations will be made because of the storm.

The Decisions Framework document and other relevant materials are available at http://tea.texas.gov/2018AccountabilityDevelopment/.

The following timeline outlines anticipated dates for the release of the 2018 Accountability Manual and additional materials associated with the A–F accountability system. Anticipated Timeline

May 2018—The proposed 2018 Accountability Manual will be published in the Texas Register for public comment.

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http://tea.texas.gov/2018AccountabilityDevelopment/

of 3

June 2018—A proposed appendix to the 2018 Accountability Manual containing the

methodology and data sources used to make decisions related to Hurricane Harvey will

be published in the Texas Register for public comment.

August 2018—The 2018 Accountability Manual will be adopted into the Texas

Administrative Code.

August 2018—The appendix associated with Hurricane Harvey decisions will be

adopted into the Texas Administrative Code.

August 15, 2018—Districts will receive a rating of A, B, C, D, or F for overall performance and for performance in each domain. Campuses will receive a rating of Met Standard, Met Alternative Standard, or Improvement Required for overall performance and for performance in each domain. Along with these ratings, TEA will release a significantly updated district and school report card with videos and other communication materials to help educators and the public fully understand the new rating system.

These materials will be enhanced and expanded upon throughout the following year, leading up to campus-level A–F ratings, which will be issued in August 2019.

Please note, HB 22 also requires that before the end of the calendar year, TEA release a separate “What If” document noting what campus ratings would have been from the 2017–18 school year if given an A–F rating.

If you have questions regarding this Decisions Framework or the soon-to-be proposed rules for accountability, please contact the Performance Reporting Department at (512) 463-9704 or [email protected].

Thank you.

Contact Information Texas Education Agency Office of Academics Penny Schwinn, Chief Deputy Commissioner Performance Reporting–Jamie Crowe, Executive Director (512) 463-9704 [email protected]

Attachment—Decisions Framework Attachment—Notable Changes to House Bill 22 Framework Based on Feedback

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mailto:[email protected]

mailto:[email protected]

https://tea.texas.gov/2018_Accountability_Decisions_Framework.pdf

https://tea.texas.gov/2018_HB22_Framework_Feedback.pdf

Notable Changes to House Bill 22 Framework Based on Feedback

Texas Education Agency | Academics | Performance Reporting 1 of 7

The Decisions Framework for House Bill (HB) 22 (85th Texas Legislature) has evolved significantly based on stakeholder feedback. TEA sought feedback from many sources, including 60+ regional forums with superintendents, 40+ focus group meetings, and countless emails and one-on-one conversations conducted by multiple agency staff with superintendents, school board members, principals, teachers, parents, students, business leaders, professional associations, and other advocacy groups.

As is expected given the complexity of the topic and the size of Texas, stakeholders brought a range of perspectives. The feedback we solicited did not give us one consistent direction, and at times stakeholders proposed radically different or even directly conflicting directions for our A–F framework. To help us weigh competing recommendations, the Accountability Policy Advisory Committee (APAC), with technical support provided by the Accountability Technical Advisory Committee (ATAC), reviewed much of this feedback and engaged in rigorous discussions on these topics. These advisory groups then submitted synthesized recommendations from this feedback, which we found immensely helpful in reconciling competing points of view, but even their recommendations were not unanimous in all cases.

Despite these challenges, this feedback was immensely helpful and guided our revisions to the Decisions Framework substantially. The following chart highlights the impact of this stakeholder feedback on the final Decisions Framework to be put forth as proposed rule in the 2018 Accountability Manual. The chart notes:

• TEA’s original recommendations prior to stakeholder feedback, • stakeholder feedback, as synthesized by APAC and ATAC, and • the resulting changes to TEA’s recommendations.

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House Bill (HB) 22 Original TEA Proposal Stakeholder Feedback TEA Final Decisions Framework for Proposed Rule

Student Achievement Domain

Dual Credit

Under HB 2804, which preceded HB 22, students who did not qualify as college ready based on TSI scores could otherwise qualify by completing twelve credit hours of dual-credit coursework.

Under HB 22, TEA proposed reducing this requirement to nine credit hours.

Reduce the requirement to three hours of dual credit in any subject area.

Earn three hours of dual credit in ELA OR mathematics; or nine hours of dual credit in any subject.

This decision considers both stakeholder feedback and research that shows a correlation between first year persistence in higher education for students who complete three hours of credit in ELA/mathematics or who complete nine credit hours in any subject.

CTE Coherent Sequence

TEA proposed that students could qualify as career ready by relying solely on whether students achieved one of the workforce-vetted industry-based certifications. Students who did not receive this certification would not be considered career ready, even if they were enrolled in a coherent sequence of CTE classes.

Include some mechanism to recognize CTE coherent sequence graduates, especially given the fact that many districts have not yet transitioned to offering the industry credential examination opportunities.

Include CTE coherent sequence graduates as career ready if they have completed and received credit for at least one CTE course aligned with the list of 73 industry-based certifications.

Given that passing rates on industry-based certifications appear to average about 50 percent (although they vary by type), apply a one-half point credit to the CCMR score for those qualifying coherent sequence graduates who did not receive an industry-based certification.

Maintain this one-half point credit through 2020 to ensure districts have enough time to begin offering these certification examinations.

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https://tea.texas.gov/WorkArea/DownloadAsset.aspx?id=51539620913

https://tea.texas.gov/Industry_Based_Certifications.pdf

https://tea.texas.gov/Industry_Based_Certifications.pdf





High Schools, Districts, and K–12 Weights

At the high school and district level, Student Achievement is made up of three components: STAAR, College, Career and Military Readiness (CCMR), and graduation rates.

TEA proposed weighting these as follows: STAAR-45%, CCMR-45%, graduation rates-10%.

Give greater weight to graduation rates. Options included the following:

• Use equal weighting for the three components of the Student Achievement domain: STAAR-34%, CCMR-33%, and graduation rates-33%.

• If not equal weighting, then weight the three components of the Student Achievement domain at STAAR-40%, CCMR-40%, and graduation rates-20%.

Weight the three components of the Student Achievement domain at STAAR-40%, CCMR-40%, and graduation rates-20%.

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School Progress Domain

Academic Growth Calculation

Prior to HB 22, credit for academic growth was only given for those students who saw sufficient vertical scale score point growth to be designated as reaching the Expected or Accelerated STAAR Progress Measure. This meant, for example, that credit might not be given for students who maintained Masters Grade Level from year to year.

TEA proposed providing full credit for maintaining Masters Grade Level but not necessarily full credit for maintaining proficiency below this threshold.

Award one-half point for students who maintain Meets Grade Level or Approaches Grade Level year over year if they don’t meet the Expected or Accelerated STAAR Progress Measure; award a full point if they also meet the Expected or Accelerated STAAR Progress Measure.

Accepted recommendation as proposed by stakeholders.

Award one-half point for students who stay at Meets Grade Level or Approaches Grade Level year over year, regardless of whether they met the Expected or Accelerated STAAR Progress Measure; award a full point if they also met the Expected or Accelerated STAAR Progress Measure.

Academic Growth in High School

The variation in examinations taken by high school students presents unique challenges in evaluating growth:

• A significant number of students take Algebra I in 8th grade. There is no subsequent mathematics examination, and therefore, we have no way of evaluating growth from 8th to 9th grade.

• Students take English I in 9th grade and English II in 10th grade. This allows us to calculate reading growth in 10th grade only.

Given this limited sample size, TEA proposed excluding Academic Growth for high schools when evaluating School Progress, relying only on Relative Performance.

Even though sample sizes will be limited, it is still valuable to recognize the growth achieved for high schools.

Accepted recommendation as proposed by stakeholders.

Academic Growth to be included at the high school level.

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School Progress Domain

Relative Performance Calculation

TEA proposed using a linear calculation (y = mx + b) to determine relative campus performance, examining the Student Achievement domain score relative to district and campus economically disadvantaged student percentages.

The linear comparison model appeared to create outliers at the extremes (very low poverty and very high poverty schools). Consider some adjustment to the model to minimize this effect.

Acted on recommendation from stakeholders.

The comparison will now be based on a slightly curved line, using a quadratic calculation to better account for the outliers at the extremes.

School Progress Combined Rating

HB 22 describes using academic growth and relative performance to assess school progress but does not specify how to weight the two parts of the domain. TEA proposed using the average of the two to get the school progress combined domain rating.

Use a best of approach, taking the better of academic growth or relative performance for the school progress combined rating.

Accepted recommendation from stakeholders.

School Progress will be based on the better of academic growth or relative performance.

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Closing the Gaps Domain

Indicator/Student Group Targets

This domain includes multiple performance indicators analyzed for multiple student groups, with targets sets for each. This domain also aligns with ESSA, so there is a single state and federal accountability system in Texas moving forward.

TEA proposed targets that were aligned with the 5-year goals for the state from the state’s submitted ESSA plan.

Consider using lower targets given the 5-year goals were substantially above the state’s current average performance.

Acted on recommendation from stakeholders.

Targets will be aligned with current average performance for each student group for each indicator upon approval of an amendment to the ESSA state plan.

Component Weighting

TEA proposed weighting each component equally to compute a percentage of indicators met within the domain.

Consider adjustments to place an equal emphasis on growth and achievement.


Weights will be applied to each component to provide equal emphasis on growth and achievement upon approval of an amendment to the ESSA state plan.

English Language Proficiency

Consistent with ESSA requirements, TEA proposed using TELPAS as an indicator to measure progress for English learners.

Request a one-year waiver from the USDE due to TELPAS changes in 2018.


If granted, a one-year waiver will allow TEA to use two years of comparable TELPAS in 2019 to calculate the English Language Proficiency component.

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Other

Substitute Assessments

TEA proposed attempting to use substitute assessments in the accountability system in lieu of STAAR EOC, at least in the Student Achievement domain.

Create performance level descriptors for all substitute assessments at Masters, Meets, and Approaches Grade Level standards, and use both for Student Achievement and the Academic Growth portion of School Progress.

Working to explore and implement stakeholder feedback.

The standard-setting and equating processes for aligning substitute assessments with STAAR takes more time than what was available in the 2017–18 school year. For the 2018 accountability ratings, only Meets Grade Level will be included for substitute assessments. TEA will explore identifying cut points for Approaches Grade Level and Masters Grade Level on all substitute assessments. TEA will also explore using the differentiated performance level descriptors described above to calculate simple academic growth for high school students on substitute assessments. The goal is for this to be in place for the 2020 accountability ratings.

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Figure: 19 TAC §74.1003 2017-18 Final List of Industry-Based Certifications

A-F Accountability System


# Certification Industry Authorizing Certification Career Cluster

1 API 1104 Welding Certificate American Petroleum Institute Manufacturing

2 ASE Automatic Transmission/Transaxle (A2) Automotive Service Excellence Transportation, Distribution & Logistics

3 ASE Automobile Service Technology Automotive Service Excellence Transportation, Distribution & Logistics

4 ASE Automotive Maintenance and Light Repair (G1) Automotive Service Excellence Transportation, Distribution & Logistics

5 ASE Brakes (A5) Automotive Service Excellence Transportation, Distribution & Logistics

6 ASE Electronic/Electrical Systems (A6) Automotive Service Excellence Transportation, Distribution & Logistics

7 ASE Engine Performance (A8) Automotive Service Excellence Transportation, Distribution & Logistics

8 ASE Engine Repair (A1) Automotive Service Excellence Transportation, Distribution & Logistics

9 ASE Heating and A/C (A7) Automotive Service Excellence Transportation, Distribution & Logistics

10 ASE Manual Drive Train and Axles (A3) Automotive Service Excellence Transportation, Distribution & Logistics

11 ASE Mechanical and Electrical Components (B5) Automotive Service Excellence Transportation, Distribution & Logistics

12 ASE Medium/Heavy Truck Technician, Brakes (T4) Automotive Service Excellence Transportation, Distribution & Logistics

13 ASE Medium/Heavy Truck Technician, Diesel Engines (T2) Automotive Service Excellence Transportation, Distribution & Logistics

14 ASE Medium/Heavy Truck Technician, Drive Train (T3) - Professional Automotive Service Excellence Transportation, Distribution & Logistics

15ASE Medium/Heavy Truck Technician, Electrical/Electronic Systems

(T6) Automotive Service Excellence Transportation, Distribution & Logistics

16 ASE Medium/Heavy Truck Technician, HVAC (T7) - Professional Automotive Service Excellence Transportation, Distribution & Logistics

17 ASE Medium/Heavy Truck Technician, Suspension and Steering (T5) Automotive Service Excellence Transportation, Distribution & Logistics

18 ASE Non-Structural Analysis and Damage Repair (B3) Automotive Service Excellence Transportation, Distribution & Logistics

19 ASE Painting and Refinishing (B2) Automotive Service Excellence Transportation, Distribution & Logistics

20ASE Refrigerant Recovery and Recycling (EPA Section 609) -

Professional Automotive Service Excellence Transportation, Distribution & Logistics

21 ASE Structural Analysis and Damage Repair (B4) Automotive Service Excellence Transportation, Distribution & Logistics

22 ASE Suspension and Steering (A4) Automotive Service Excellence Transportation, Distribution & Logistics

23 Associate of (ISC)² International Information System Security Certification Consortium Information Technology

24 AWS D1.1 Certification American Welding Society Manufacturing

25 AWS D9.1 Certification American Welding Society Manufacturing

26 AWS SENSE Welding Level 1 American Welding Society Manufacturing

27 Certified Clinical Medical Assistant (CCMA) National Healthcareer Association (NHA) Health Science

28 Certified Dental Assistant (CDA) Texas State Board of Dental Examiners Health Science

December 2017 Page 1 of 3

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29 Certified EKG/ECG Technician (CET)

National Healthcareer Association (NHA)/National Center for

Competency Testing (NCCT) Health Science

30 Certified Nurse Aide/Assistant (CNA) Texas Department of Aging and Disability Services Health Science

31 Certified Patient Care Technician (CPCT)



32 Certified Pharmacy Technician (CPhT) National Healthcareer Association (NHA) Health Science

33 Certified Phlebotomy Technician (CPT)



34 Certified SolidWorks Associate (CSWA) SolidWorks Science, Technology, Engineering & Math

35 Certified Veterinary Assistant (CVA) Texas Veterinary Medical Association Agriculture, Food & Natural Resources

36 Child Development Associate (CDA) National Association of the Education of Young Children Human Services

37 Cisco Certified Entry Networking Technician (CCENT) Cisco Systems, Inc. Information Technology

38 Cisco Certified Network Associate (CCNA) Cisco Systems, Inc. Information Technology

39 Cisco Certified Network Associate Security (CCNA Security) Cisco Systems, Inc. Information Technology

40 CompTIA A+ Certification CompTIA Information Technology

41 CompTIA Network+ CompTIA Information Technology

42 CompTIA Security+ CompTIA Information Technology

43 Cosmetology Operator License Texas State Board of Cosmetology Human Services

44 Electrical Apprenticeship Certificate Level 1 Independent Electrical Contractors (IEC) of Texas Architecture & Construction

45 Emergency Medical Technician (EMT) National Registry of Emergency Medical Technicians Health Science

46 ISCET Associate-Level Certified Electronics Technicians (CET) International Society of Certified Electronics Technicians Business Management & Administration

47 Medical Laboratory Assistant American Medical Technology (AMT) Health Science

48 Microsoft Office Specialist (MOS) - Excel Expert Certiport/Microsoft Business Management & Administration

49 Microsoft Office Specialist (MOS) - Word Expert Certiport/Microsoft Business Management & Administration

50 Microsoft Office Specialist (MOS) Master Certification Certiport/Microsoft Business Management & Administration

51 Microsoft Technology Associate (MTA) Certiport/Microsoft Information Technology

52 NCCER Carpentry, Level 1 National Center for Construction Education and Research Architecture & Construction

53 NCCER Construction Technology National Center for Construction Education and Research Architecture & Construction

54 NCCER Core Curriculum National Center for Construction Education and Research Architecture & Construction

55 NCCER Electrical, Level 1 National Center for Construction Education and Research Architecture & Construction

56 NCCER Electronic Systems Technician, Level 1 National Center for Construction Education and Research Architecture & Construction


120





57 NCCER HVAC, Level 1 National Center for Construction Education and Research Architecture & Construction

58 NCCER Industrial Maintenance Mechanic, Level 1 National Center for Construction Education and Research Architecture & Construction

59 NCCER Instrumentation, Level 1 National Center for Construction Education and Research Architecture & Construction

60 NCCER Masonry, Level 1 National Center for Construction Education and Research Architecture & Construction

61 NCCER Millwright, Level 1 National Center for Construction Education and Research Architecture & Construction

62 NCCER Painting/Commercial and Residential, Level 1 National Center for Construction Education and Research Architecture & Construction

63 NCCER Pipefitting, Level 1 National Center for Construction Education and Research Architecture & Construction

64 NCCER Plumbing, Level 1 National Center for Construction Education and Research Architecture & Construction

65 NCCER Sheet Metal, Level 1 National Center for Construction Education and Research Architecture & Construction

66 NCCER Weatherization, Level 1 National Center for Construction Education and Research Architecture & Construction

67 NCCER Welding, Level 1 National Center for Construction Education and Research Manufacturing

68 NIMS Certification, Level 1 National Institute for Metalworking Skills Manufacturing

69 Oracle Certified Associate Java SE 8 Programmer Oracle Information Technology

70 Oracle Certified Database Associate Oracle Information Technology

71 QuickBooks Certified User Certiport Finance

72 Wastewater Collections, Class 1 Texas Commission on Environmental Quality Agriculture, Food & Natural Resources

73 Water Operators, Class D Texas Commission on Environmental Quality Agriculture, Food & Natural Resources


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2018 Accountability—CTE Courses Aligned with Industry-Based Certifications


Code Course Title Course Abbreviation

N1300262 Introduction to Process Technology INTRPT

N1300426 Pipefitting Technology II PIPETEC2

N1302803 Internetworking Technologies I (Cisco) INTNET1

N1302804 Internetworking Technologies II (Cisco) INTNET2

N1302810 Principles of Cybersecurity CYBRSEC

N1302812 Introduction to C# Programming Applications INTCPA

13000600 Veterinary Medical Applications VETMEDAP

13000610 Veterinary Medical Applications/Agricultural Laboratory and Field Experience VETMEDLAB

13001100 Energy and Natural Resources Technology ENGNRT

13001110 Energy and Natural Resource Technology/Agricultural Laboratory and Field Experience ENGNRTLAB

13001200 Advanced Energy and Natural Resource Technology ADENRT

13001210 Advanced Energy and Natural Resource Technology/Agricultural Laboratory and Field Experience ADENRTLAB

13004220 Principles of Construction PRINCON

13005000 Construction Management II CONSMGT2

13005200 Construction Technology II CONTECH2

13005250 Practicum in Construction Technology (First Time Taken) PRACCT1

13005260 Practicum in Construction Technology (Second Time Taken) PRACCT2

13005300 Mill and Cabinetmaking Technology MACTECH

13005500 Building Maintenance Technology II BUILDMA2

13005700 Electrical Technology II ELECTEC2

13005900 Heating, Ventilation, and Air Conditioning (HVAC) and Refrigeration Technology II HVACREF2

13006100 Plumbing Technology II PLTECH2

13006200 Practicum in Construction Management (First Time Taken) PRACCM1

13006205 Practicum in Construction Management/Extended Practicum in Construction Management (First Time Taken) EXPRCM1

13006210 Practicum in Construction Management (Second Time Taken) PRACCM2

13006215 Practicum in Construction Management/Extended Practicum in Construction Management (Second Time Taken) EXPRCM2

13006400 Masonry Technology II MASTECH2

13011500 Business Information Management II BUSIM2

13011510 Business Information Management II/Business Lab BUSMLAB2

13012200 Practicum in Business Management (First Time Taken) PRACBM

13012205 Practicum in Business Management/Extended Practicum in Business Management (First Time Taken) EXPRBM

13012210 Practicum in Business Management (Second Time Taken) PRACBM2

13012215 Practicum in Business Management/Extended Practicum in Business Management (Second Time Taken) EXPRBM2

13016700 Accounting II ACCOUNT2

13020400 Health Science Theory HLTHSCI

13020410 Health Science Theory/Health Science Clinical HLSCLIN

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13020500 Practicum in Health Science (First Time Taken) PRACHLS1

13020505 Practicum in Health Science/Extended Practicum in Health Science (First Time Taken) EXPRHLS1

13020510 Practicum in Health Science (Second Time Taken) PRACHLS2

13020515 Practicum in Health Science/Extended Practicum in Health Science (Second Time Taken) EXPRHLS2

13020950 Pharmacology PHARMC

13024800 Child Guidance CHILDGUI

13025000 Practicum in Human Services (First Time Taken) PRACHUS1

13025005 Practicum in Human Services/Extended Practicum in Human Services (First Time Taken) EXPRHUS1

13025010 Practicum in Human Services (Second Time Taken) PRACHUS2

13025015 Practicum in Human Services/Extended Practicum in Human Services (Second Time Taken) EXPRHUS2

13025300 Cosmetology II COSMET2

13025310 Cosmetology II/Cosmetology II Lab Innovative COSLAB2

13027300 Computer Maintenance COMPMTN

13027310 Computer Maintenance/Computer Maintenance Lab COMMTLAB

13027400 Networking NETWRK

13027410 Networking/Networking Lab NETWRLAB

13027500 Computer Technician Practicum (First Time Taken) COMPT1

13027505 Computer Technician Practicum/Extended Computer Technician Practicum (First Time Taken) EXCOMPT1

13027510 Computer Technician Practicum (Second Time Taken) COMPT2

13027515 Computer Technician Practicum/Extended Computer Technician Practicum (Second Time Taken) EXCOMPT2

13027700 Computer Programming II COMPPRO2

13028000 Practicum in Information Technology (First Time Taken) PRACIT1

13028005 Practicum in Information Technology/Extended Practicum in Information Technology (First Time Taken) EXPRIT1

13028010 Practicum in Information Technology (Second Time Taken) PRACIT2

13028015 Practicum in Information Technology/Extended Practicum in Information Technology (Second Time Taken) EXPRIT2

13032400 Welding II WELD2

13032410 Welding II/Welding II Lab WELDLAB2

13032600 Precision Metal Manufacturing II PREMMAN2

13032610 Precision Metal Manufacturing II/Precision Metal Manufacturing II Lab PRMMLAB2

13033000 Practicum in Manufacturing PRACMAN1

13033005 Practicum in Manufacturing/Extended Practicum in Manufacturing (First Time Taken) EXPRMAN1

13033010 Practicum in Manufacturing (Second Time Taken) PRACMAN2

13033015 Practicum in Manufacturing/Extended Practicum in Manufacturing (Second Time Taken) EXPRMAN2

13036900 Solid State Electronics SOSTELEC

123




13037400 Practicum in Science, Technology, Engineering, and Mathematics (First Time Taken) PRCSTEM1

13037410 Practicum in Science, Technology, Engineering, and Mathematics (Second Time Taken) PRCSTEM2

13037405 Practicum in Science, Technology, Engineering, and Mathematics/Extended Practicum in Science, Technology, Engineering, and Mathematics (First Time Taken)

EXPRSTEM1

13037415

Practicum in Science, Technology, Engineering, and Mathematics/Extended Practicum in Science, Technology, Engineering, and Mathematics (Second Time Taken)

EXPRSTEM2

13037600 Digital Electronics DIGELC

13039700 Automotive Technology II: Automotive Service AUTOTEC2

13039710 Automotive Technology II: Automotive Service/Advanced Transportation Systems Laboratory AUTOLAB2

13039800 Collision Repair COLLISR

13039810 Collision Repair/Advanced Transportation Systems Laboratory COLLRLAB

13039900 Paint and Refinishing PAINTREF

13039910 Paint and Refinishing/Advanced Transportation Systems Laboratory PTREFLAB

13040450 Practicum in Transportation Systems (First Time Taken) PRACTRS1

13040455 Practicum in Transportation Systems/Extended Practicum in Transportation Systems (First Time Taken) EXPRTRS1

13040460 Practicum in Transportation Systems (Second Time Taken) PRACTRS2

13040465 Practicum in Transportation Systems/Extended Practicum in Transportation Systems (Second Time Taken) EXPRTRS2

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House Bill 22 2018 Accountability Decisions Framework


This document presents the commissioner of education’s final decisions for 2018 accountability.

2018 System Overview

Rigor The overall design of the accountability system evaluates performance according to three domains: Student Achievement School Progress Closing the Gaps

Domain Construction

Student Achievement Evaluates performance across all subjects for all students, on both general and alternative assessments

Grade Level Component Description Rationale

EL, MS, HS, K–12, and Districts

STAAR (All Grade Levels and Subject Areas)

Percentage at Approaches Grade Level or Above

• Reward success at all performance levels to encourage administrative focus on all students, rather than just those near the Approaches Grade Level standard.

• The average of the three levels is very close to the percentage of students who achieve the Meets Grade Level standard. The Meets Grade Level standard equates to a 60 percent chance of completing one year of college without remediation which seems most appropriate in alignment with 60x30TX. (The higher Masters Grade Level standard, like the SAT/ACT college readiness threshold, equates to a 75 percent chance of completing one year of college without remediation.)

Percentage at Meets Grade Level or Above

Percentage at Masters Grade Level

HS, K–12, and Districts

College, Career, and Military Readiness (CCMR)

Meet Reading TSI Criteria on TSIA, ACT, SAT, or Complete and Receive Credit for a College Prep Course in English Language Arts and Meet Mathematics TSI Criteria on TSIA, ACT, SAT, or Complete and Receive Credit for a College Prep Course in Mathematics

Meeting the criteria in both reading and mathematics aligns with Texas Higher Education Coordinating Board’s expectations for college readiness, consistent with 60x30TX.

Meet Criteria of 3 on AP or 4 on IB Examinations in Any Subject

Research shows a correlation between first year persistence in higher education for students who meet the criteria on an AP/IB examination, consistent with the college ready threshold for SAT/ACT/TSIA. Including any subject area is in response to stakeholder feedback.

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Grade Level Component Description Rationale


College, Career, and Military Readiness (CCMR)

Earn Three Hours of Dual-Course Credits in ELA/Mathematics or Nine Hours in Any Subject (includes technical courses), down from the 12 hours required by HB 2804 (84th Texas Legislature [2015])

Research shows a correlation between first year persistence in higher education for students who complete three hours of credit in ELA/mathematics. Including nine hours in any subject is in response to stakeholder feedback.

Enlist in the U.S. Armed Forces Enlistment standard encompasses academic readiness (ASVAB), physical fitness, and character screening.

Earn an Approved Industry-Based Certification

Completion of at least one of the 73 industry-based certifications is a strong indicator of meaningful post-graduate employment. List validated via Tri-Agency stakeholder feedback and, where available, employment data.

Earn an Associate’s Degree while in High School

Automatically met by students meeting dual-credit threshold but highlighted distinctly to showcase postsecondary completion.

Graduate with Completed IEP and Workforce Readiness (Graduation Type Code of 04, 05, 54, or 55)

Crediting districts and campuses for annual special education graduates who complete workforce or work-skill programs while in high school meets the intent of the statute.

CTE Coherent Sequence Coursework Completion and Credit Aligned with Approved Industry-Based Certifications (one-half point credit)

Giving partial credit to districts and campuses for CTE coherent sequence students who complete and earn credit for coursework aligned with the approved list of industry-based certifications is in response to stakeholder feedback. Also, phasing out CTE coherent sequence allows districts and campuses to receive credit for efforts already in progress. The following is an overview of the current transition plan from CTE coherent sequence to industry-based certification. • For 2018 and 2019, CTE coherent

sequence graduates who complete and receive credit for at least one industry-based certification aligned CTE course earn one-half point (see attached list).

• For 2020 and 2021, CTE coherent sequence graduates who complete and receive credit for a pathway of courses toward an industry-based certification earn one-half point.

• For 2022 and beyond, only graduates who earn an industry-based certification earn one point.


Graduation Rates

Best of Four-year, Five-year, or Six-year Longitudinal Graduation Rates

Expanded to include six-year rates to help ensure an incentive to support the most struggling students.

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https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&ved=0ahUKEwj9nZf41J7aAhWB14MKHXLwAsoQFghQMAQ&url=https%3A%2F%2Ftea.texas.gov%2FIndustry_Based_Certifications.pdf&usg=AOvVaw32wOHwyX4mMGl3p2HIckuc







Assessments Evaluated Results are evaluated for grades 3–8 and end-of-course assessments for

STAAR (with and without accommodations), STAAR Alternate 2, and substitute assessments (at Meets Grade Level).

Student Groups Evaluated All students, including English learners (ELs) as described below, are evaluated as one group.

Inclusion of English Learners English learners (ELs) in their first year in U.S. schools are excluded from Student Achievement domain calculations unless they were administered STAAR Alternate 2. STAAR Alternate 2 assessments are included in all domains without regard to years in U.S. schools. Furthermore, TEA will seek a waiver from the USDE for ELs in their second year in U.S. schools. If approved, ELs in year two in U.S. schools will be excluded from accountability calculations for 2018.

Asylees, refugees, and students with interrupted formal education (SIFEs) are not included in state accountability until their sixth year of enrollment in U.S. schools.

Methodology

STAAR One point is given for each percentage of assessment results that are at or above the following:

Approaches Grade Level or Above Meets Grade Level or Above Masters Grade Level

The STAAR component is calculated by dividing the total points (cumulative percentage of assessments at each performance level) by three, resulting in an overall score of 0 to 100.

Percentage of Assessments at Approaches Grade Level or Above + Percentage of Assessments at Meets Grade Level or Above +

Percentage of Assessments at Masters Grade Level Three

CCMR One point is given for each annual graduate who accomplishes any one of the CCMR indicators except for CTE coherent sequence graduates who completed coursework aligned to the approved list of industry-based certifications. One-half point will be given for these graduates. The CCMR component is calculated by dividing the total points (cumulative number of CCMR graduates) by the number of annual graduates.

Number of Graduates Who Accomplished Any One of the CCMR Indicators Number of 2017 Annual Graduates

Graduation Rate High school graduation rates include the four-year, five-year, or six-year longitudinal graduation rate (with state exclusions) or annual dropout rate, if the graduation rate is unavailable.

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Student Achievement Domain Calculation

Campus Type Component Weight Elementary School STAAR 100%

Middle School STAAR 100%


STAAR 40% CCMR 40%

Graduation Rate or Annual Dropout Rate 20%

Rationale: The weighting for the Student Achievement domain was chosen in response to stakeholder feedback.

School Progress Measures district and campus outcomes in two parts: the number of students that grew at least one year academically (or are on track) as measured by STAAR results, as well as the achievement of students relative to similar districts or campuses. School Progress, Part A: Academic Growth Provides an opportunity for districts and campuses to receive credit for STAAR results that either meet the student-level criteria for the STAAR progress measure or maintain proficiency.

Assessments Evaluated Results are evaluated for assessments with eligible STAAR progress measures. Substitute assessments are not included in Part A of the School Progress domain because they have no STAAR progress measures.


Inclusion of English Learners English learners (ELs) in their first year in U.S. schools are excluded from School Progress, Part A domain calculations unless they were administered STAAR Alternate 2. STAAR Alternate 2 assessments are included in all domains without regard to years in U.S. schools. The STAAR progress measure is used for ELs and non-ELs in the School Progress, Part A domain. Furthermore, TEA will seek a waiver from the USDE for ELs in their second year in U.S. schools. If approved, ELs in year two in U.S. schools will be excluded from accountability calculations for 2018.

Asylees, refugees, and SIFEs are not included in state accountability until their sixth year of enrollment in U.S. schools.

Methodology School Progress, Part A includes all assessments with a STAAR progress measure. Districts and campuses earn credit for results that maintain proficiency or meet growth expectations on STAAR.

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Methodology

Current-Year Performance on STAAR

Pri

or-Y

ear

Per

form

ance

on

STA

AR

Does Not Meet Approaches Grade

Level Meets Grade

Level Masters Grade

Level

Does Not Meet

Met or Exceeded Growth

Expectation=1 point,

Else = 0 points


Expectation=1 point, Else = 0.5 point

1 point 1 point

Approaches Grade Level



Else = 0 points


Expectation=1 point, Else = 0.5 point

1 point 1 point

Meets Grade Level

0 points 0 points



Else = 0.5 point

1 point

Masters Grade Level

0 points 0 points 0 points 1 point

Rationale: School Progress, Part A provides an opportunity for districts and campuses to receive credit for STAAR results that either maintain proficiency or meet the student-level criteria for progress. Awarding only one-half point for remaining at Meets Grade Level without meeting progress measure expectations is in response to stakeholder feedback.

Rationale: School Progress, Part A provides an opportunity for districts and campuses to receive credit for STAAR Alternate 2 results that either maintain proficiency or meet the student-level criteria for progress.

Current-Year Performance on STAAR Alternate 2

Pri

or-Y

ear

Per

form

ance

on

STA

AR

A

lter

nate

2

Level I: Developing Level II: Satisfactory Level III: Accomplished

Level I: Developing

Met or Exceeded Growth Expectation=1

point, Else = 0 points

1 point 1 point

Level II: Satisfactory 0 points

Met or Exceeded Growth Expectation=1

point, Else = 0.5 point

1 point

Level III: Accomplished 0 points 0 points 1 point

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School Progress, Part B: Relative Performance Evaluates the achievement of all students relative to districts or campuses with similar socioeconomic statuses.

Assessments Evaluated Results are evaluated for grades 3–8 and end-of-course assessments for STAAR (with and without accommodations), STAAR Alternate 2, and substitute assessments (at Meets Grade Level).


Inclusion of English Learners English learners (ELs) in their first year in U.S. schools are excluded from School Progress, Part B domain calculations unless they were administered STAAR Alternate 2. STAAR Alternate 2 assessments are included in all domains without regard to years in U.S. schools. Furthermore, TEA will seek a waiver from the USDE for ELs in their second year in U.S. schools. If approved, ELs in year two in U.S. schools will be excluded from accountability calculations for 2018.


Methodology

Campus Type Evaluation

Elementary School Student Achievement STAAR component results compared to elementary schools with similar percentages of economically disadvantaged students

Middle School Student Achievement STAAR component results compared to middle schools with similar percentages of economically disadvantaged students

HS, K–12, and Districts with CCMR Component

Student Achievement STAAR component and CCMR component results averaged compared to districts or campuses with similar percentages of economically disadvantaged students

HS, K–12, and Districts without CCMR Component

Student Achievement STAAR component results compared to districts or campuses with similar percentages of economically disadvantaged students

AEA Districts and Campuses

Alternative education accountability (AEA) districts and campuses are not evaluated on School Progress, Part B due to the small number of districts and campuses used for comparison.

Rationale: Comparing relative performance of similar districts and campuses is statutorily required. Research has shown that a student’s socioeconomic status is one of the most accurate predictors of achievement. Highlighting campuses that are the most successful educating students who are economically disadvantaged can help identify best practices.

School Progress Domain Calculation Step 1: Calculate a scaled score for both School Progress, Part A and Part B.

Step 2: Take the higher scaled score for either School Progress, Part A or Part B. The higher scaled score is used to calculate the School Progress domain rating.

Rationale: Using the better of School Progress, Part A or Part B is in response stakeholder feedback.

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Closing the Gaps Measures achievement differentials among students, including differentials among students from different racial and ethnic groups and socioeconomic backgrounds and other factors including: students formerly receiving special education services, continuously enrolled students, and students who are mobile.

Student Groups Evaluated All Students African American Hispanic White American Indian Asian Pacific Islander Two or More Races

Economically Disadvantaged Special Education Former Special Education Current and Monitored English Learners

(through fourth year as allowed by ESSA) Continuously Enrolled Non-Continuously Enrolled

Inclusion of English Learners English learners (ELs) in their first year in U.S. schools are excluded from Closing the Gaps domain calculations unless they were administered STAAR Alternate 2. STAAR Alternate 2 assessments are included in all domains without regard to years in U.S. schools. Furthermore, TEA will seek a waiver from the USDE for ELs in their second year in U.S. schools. If approved, ELs in year two in U.S. schools will be excluded from accountability calculations for 2018.


Components Academic Achievement (at the Meets Grade Level or above standard) in Reading and Mathematics Growth in Reading and Mathematics (School Progress, Part A) for Elementary and Middle Schools Four-year Graduation Rate (without state exclusions) for High Schools, K–12s, and Districts with

Graduation Rates Student Achievement Domain STAAR Component for Elementary and Middle Schools College, Career, and Military Readiness Performance for High Schools, K–12s, and Districts

Rationale: The Closing the Gaps domain was designed to meet the federal requirements of the Every Student Succeeds Act (ESSA). Due to changes to the TELPAS, Texas will request a waiver from the USDE to waive the English Language Proficiency component for 2018 accountability. If granted, the English Language Proficiency component will be evaluated for the first time in 2019.

Closing the Gaps Domain Calculation Cumulative performance for each component is based on the total number of eligible student groups that meet minimum-size criteria. The maximum number of measures met for each component is totaled and then divided by the total count of eligible measures, resulting in an overall percentage for each of the three domain components. Percentages for each component are then weighted based on the district or campus type to calculate an overall domain score.

Rationale: House Bill 22 requires the use of disaggregated data to demonstrate differentials among racial/ethnic groups, socioeconomic backgrounds, and other factors.

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2018 Accountability Rating Labels

Rating Labels The 2018 rating labels for districts and campuses are as follows. Rating labels are assigned to each domain, and an overall rating is assigned.

Campuses Met Standard: Assigned for overall performance and for performance in each domain to campuses

that meet the required performance targets Improvement Required: Assigned for overall performance and for performance in each domain to

campuses (including AEAs) that do not meet the required performance targets Met Alternative Standard: Assigned for overall performance and for performance in each domain to

alternative education campuses evaluated under alternative education accountability (AEA) provisions that meet the required performance targets

Not Rated: Assigned to campuses that—under certain, specific circumstances—do not receive a rating

Districts A, B, C, or D: Assigned for overall performance and for performance in each domain to districts that

meet the required performance target for the letter grade F: Assigned for overall performance and for performance in each domain to districts (including AEAs)

that do not meet the required performance target to earn at least a D Not Rated: Assigned to districts that—under certain, specific circumstances—do not receive a rating

Rationale: House Bill 22 requires that districts receive domain and overall letter grades of A–F and campuses receive domain and overall ratings of Met Standard, Met Alternative Standard, or Improvement Required.

Scaling In order to align letter grades and scores used in the A–F academic accountability system to the common conception of letter grades, raw component and domain scores are adjusted to scaled scores.

Weighting of the Overall Rating

Step 1: Determine the better outcome of the Student Achievement and the School Progress domain scaled scores.

Step 2: Weight the better outcome of the Student Achievement or the School Progress domain scaled score at 70 percent.

Step 3: Weight the Closing the Gaps domain scaled score at 30 percent.

Step 4: Total the weighted outcome of the two scaled scores to calculate the overall score.

Overall Rating Targets—Districts In order to receive an overall rating of A, B, C, or D, districts must meet the performance target for the letter grade, if they have performance data for evaluation. If a district fails to meet the performance target for at least a D, the district receives an F. District ratings are assigned based on the following scaled scores: A=90–100, B=80–89, C=70–79, D=60–69. Districts will be assigned an F if the overall scaled score is less than 60.

Overall Rating Targets—Campuses In order to receive an overall Met Standard or Met Alternative Standard rating, campuses must meet the performance target, by campus type, if they have performance data for evaluation. Campuses will be assigned a rating of Met Standard/Met Alternative Standard based on an overall scaled score of 60–100. Campuses will be assigned an Improvement Required rating if the overall scaled score is less than 60.

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2018 Accountability Cut Points

Cut Points The 2018 cut points for districts and campuses will reflect high expectations for student achievement, school progress, and reducing achievement gaps among students of different racial and ethnic backgrounds and different socioeconomic statuses.

An effort is being made to establish A cut points equating high performance consistent with meeting statewide goals for our students. For example, achieving a raw score of 60 in Student Achievement is consistent with the 60x30TX plan and would be used to designate an A (or a 90 out of 100 scaled score) in that domain.

Performance in a domain that was precisely average for campuses in the 2016–17 school year is being used to determine C cut points (specifically, 78 out of 100 for a slightly high C).

Exact cut score levels are informed based on performance achieved last year (the 2016–17 school year). To the extent possible, those cut scores will remain static over five-year intervals, so that as campuses improve statewide, campus ratings also improve. This allows for easier year-over-year performance comparisons and ensures it remains mathematically possible for all campuses to achieve an A, even in the first year of implementation.

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Distinction Designations

Updates to Distinction Designation Indicators Distinction designation indicators are updated to align with the achievement indicators in the 2018 accountability system. The following table shows these updates:

Distinction Designation Update(s)

All Subject Area Distinction Designations Advanced/Dual-Credit Course Completion Rate indicator evaluates grades 9–12

Top 25 Percent: Student Progress Awarded if School Progress, Part A domain scaled score ranks in top 25 percent (Q1) of campuses in campus comparison group

Top 25 Percent: Closing Performance Gaps Awarded if Closing the Gaps domain scaled score ranks in top 25 percent (Q1) of campuses in campus comparison group

Postsecondary Readiness • Percentage of STAAR Results at Meets Grade Level or Above Standard (All Subjects) indicator replaces Index 4–Percentage at STAAR Meets Grade Level Standard

• College, Career, and Military Ready Graduates indicator added

• TSI Criteria Graduate indicator replaces College Ready indicator

• Percentage of Grade 3–8 Results at Meets Grade Level or Above in Both Reading and Mathematics indicator added

Rationale: The updated indicators align more closely with the methodology for similar indicators used in accountability calculations.

Distinction Designation Eligibility Campuses that receive an accountability rating of Met Standard are eligible to earn distinction designations. Districts that receive a rating of A, B, C, or D are eligible for a distinction designation in postsecondary readiness.

Rationale: House Bill 22 (85th Texas Legislature) defines acceptable performance as an overall or domain performance rating of A, B, C, or D.

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Hurricane Harvey Affected Districts and Campuses

Decisions Related to Hurricane Harvey The commissioner will make decisions related to 2018 accountability for districts and campuses impacted by Hurricane Harvey in late spring.

Anticipated Timeline

May 2018—The proposed 2018 Accountability Manual will be published in the Texas Register for public comment.

June 2018—The commissioner will announce accountability decisions related to Hurricane Harvey affected districts and campuses.

June 2018—A proposed appendix to the 2018 Accountability Manual containing the methodology and data sources used to make decisions related to Hurricane Harvey will be published in the Texas Register for public comment.

August 2018—The 2018 Accountability Manual will be adopted into the Texas Administrative Code.

August 2018—The appendix associated with Hurricane Harvey decisions will be adopted into the Texas Administrative Code.

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