84 rd Texas Legislative Session

1. 84rd Texas Legislative Session School Board Update – Video 2 2015

2. And now…. 84th Legislature Public Education Video 2 Presented by Doug Karr Dkarr @suddenlink.net 1 hour, 10 minutes

3. Texas Education Budget OVERVIEW Making sure all Texas Children receive a high-quality education is key to the future economic prosperity of the state. An adequate and equitable system of school finance is critical for school improvement to succeed

4. Texas Schools • Five million students • 60% economically disadvantaged • Public school enrollment increased 20% • Economically disadvantaged increased 43.7% • Hispanic pop +46.5%--White -10.2% • Bilingual pop +49.2% --Limited English proficiency +39.4 %

5. 2011 Cuts • Cut 4 Billion from formula funding (FSP) • Cut 1.3 Billion from educational programs outside the FSP • (primarily programs targeted disadvantaged and At-risk populations)

6. What did the cuts do? • 21,000 fewer teachers • Three times as many over-crowded classrooms • Six lawsuits against state by parents, schools, and public education advocates

7. 2014-15 Budget did not fully restore cuts • Added 3.2 billion back to public ed. funding • 2008 Local/state/federal per student $10,220 • 2015 Local/state/federal per student $9609 To bring school funding back to just 2008 levels 5.9 Billion would be needed

8. Student Enrollment Growth • Texas adds 85,000 students per year 2014-15 budget did take into account growth, however when funding is cut, or when funding does not take into account inflation, every student is funded at a lower level

9. Pre-Kindergarten • In 2011 the legislature eliminated $208.6 million for Pre-K expansion grants. • 2014-15 budget adds $30 million for Pre-K • If all eligible students qualify for funding, it will be at less than $300 per student

10. What 2014-15 budget accomplished • Partially restored state funding cuts from 2011 • Those hit hardest by education cuts Economically disadvantaged students At-risk populations

11. What Did not Happen? • HB 1759 - Funding Weight Changes - Taxpayer Scholarships or Vouchers - Indexed Homestead Exemption - Sales Tax Reduction - 50 cent test fix - Enhanced facilities assistance

12. What Didn’t Happen? • HB 1759 (cont.’) - Basic Allotment of $5,888 - Eliminate the COEI, Transportation Allotment, High School Allotment, Staff Allotment, 1992-93 Chapter 41 hold-harmless -Reduce & phase out the mid-sixe adjustment - Hold-harmless for 2 years - Other changes

13. 2016-17 budget highlights for the FSP • Public Education Budget - Just over $54B (all funds) +5.6% increase - Just over $37B (GR funds) +10.7% increase • $6.2B left on the table unspent • $11.1B left in the Rainy Day Fund

14. 2016-17 budget highlights for the FSP • $1.2 billion for the basic allotment per ADA ($5,140 both years) • $200 million for fractional funding (districts with compressed tax rates below $1.00) • Guaranteed Yield increases to $74.28 (2016) and $77.53 (2017) • $55.5 million for IFA (FY 2017) • $47.5 million for NIFA

15. 2016-17 budget highlights for the FSP • Equalized Wealth Levels (EWLs) for Chapter 41 - $319,500 (no change) - $514,000 (up from $504,000) • State share of FSP - 2016 = 43.4% - 2017 = 40.9% $4.5B in FSP savings from local value growth + $1.1B increase in recapture offsetting state costs = $5.6B in total state savings for the biennium

16. Other budget items outside FSP • 25 million for Education Service Centers* • 31 million for Communities in Schools* • 12 million for Teach for America* • 8 million for Virtual Schools* • 16.3 million for Advanced Placement Initiative* • 6 million for Early College High School* • 3 million for T_STEM, down from 6 million (*indicates the amount unchanged from 2014-15 budget)

17. Other budget items outside FSP • 1.04 billion for IMA, up from 838 million • 40.6 million for math and reading academies • 31.7 million for SSI, down from 60.5 million • 30 million for supplemental funding for Pre-K* • 118 million for Pre-K programs that meet certain requirements (*indicates the amount unchanged from 2014-15 budget)

18. Business and Property tax relief Included in Article III is funding for tax relief • 2.6 billion for 25% reduction to franchise tax • 1.2 billion to hold districts harmless for $10,000 increase in homestead exemption

19. Cost Considerations • Health Insurance Premium Continued Increases • Contributions to TRS - 1.5% of the payroll cost (no more state support) - 0.55% of the active employees’ salaries • Know your district’s percentage breakdown of payroll, fixed, & discretionary costs

20. What’s Next? • The School Finance Lawsuit - Supreme Court on September 1, 2015 - Ruling expected in the Spring of 2016 - Legislative Response in a Summer 2016 special session or in the January 2017 regular session???

21. What’s Next? • Fall Tax Notices Include the additional $10K exemption • November 2015 Election to approve the Additional $10K Homestead Exemption • Comptroller to do a preliminary adjustment to the PTD value before then finalizing it after the election • Hold-harmless protection for M&O and I&S revenue • Revenue Budget Amendments May Be Necessary

22. What’s Next? • Target Revenue Funding Scheduled to Expire at the end of school year 2016-17 - No more ASATR (Additional State Aid for Tax Reduction) - Districts currently receiving ASATR will be facing significant revenue reduction in 2017-18 • Will there be future cuts to public education like those in 2011 if the price of oil does not increase??? • Comptroller set price of oil for state budget at $91 in 14-15 • Comptroller set price of oil for state budget at $61 in 15-16 • Current prices of oil significantly less than $61, which could impact state budget planning for 17-18

23. Region 18 Education Service Center Level One School Board Training is developed and provided as a collaborative effort of the 20 Education Service Centers