Legislative Day 2013

1. Legislative Day 2013

2. Finance & Appropriations Overview Legislative Day 2013

3. Surplus rather than Shortfall • Legislature has $101.4 billion to spend ($92.6 billion in revenue & $8.8 billion in surplus), plus $11.8 billion in Rainy Day Fund • Budget bills filed in House and Senate appropriate $89.1 billion and $88.9 billion respectively.

4. Supplemental Appropriations HB 10 (Pitts/Williams) • $316 million for TEA shortfall caused by overestimating savings of payment delay • $1.75 billion to reverse the delayed August 2013 FSP payment • Also provides funding for other state services SB 758 (Williams) • Statutory fix to reverse the delayed FSP payment

5. Take It to the Limit Constitutional Spending Limit • Limits increases in appropriations from state tax revenue that is not constitutionally dedicated to the rate of growth in total personal income in the state (10.71 %, which applies to about $80 billion of GR spending) • Introduced SB 1 was $3.9 billion below the spending limit • Constitutional limit can be suspended by a vote of the majority of legislators Pay-as-You-Go Limit • Legislature may not appropriate more funds than the Comptroller says are available • Introduced version of SB 1 was $5.7 billion below this limit

6. Senate Bill 1 • Spends $88.9 billion • Funds enrollment growth ($2.2 billion) • Realizes $1.5 billion in state savings due to property value growth • As per action of the Senate Finance Committee last week, SB 1 now invests additional $1.5 billion in public education (on top of enrollment growth)

7. How they spent $1.5 billion

8. What does $1.375 billion buy? • Restores the Regular Program Adjustment Factor (RPAF) from 0.98 to 1 (cost: $1 billion) • Increases Basic Allotment • These BA increases cause ASATR to decline by $200 million in FY14 and $373 in FY15

9. What does that mean? • No districts experience a net loss of revenue, but there is a difference in the average gain per district. • 709 districts will be formula funded by FY2015 (compared to 621 under current law) TXSC Districts Average Gain Statewide Average Gain

10. Why? (Hypothetical Illustration)

11. Why? (Hypothetical Illustration) Target Revenue

13. House Budget Bill • No decisions from Article III Subcommittee • Indication that no additional funding will be used to restore programs • Will the House add $1.5 billion in FSP funding? More? Less? • Will the House move to reduce ASATR? Increase the Basic Allotment?

14. School Finance Ruling • District Court ruling announced on February 4, 2013 • Even before that time, several leaders expressed their desire to wait until the Texas Supreme Court ruled (and their plans to save any new money until that time) • Supreme Court ruling not expected until Spring or Summer 2014

15. Sequestration • Federally funded education programs cut by more than 5% (120 out of 130 cut) • About 20% of funding for public education in Texas is federal, so these cuts will have a significant impact on schools. • Will this impact state decision making?

16. Restore, Protect and Invest • Restore the Regular Program Adjustment Factor and the other funding cuts that were made last session • Protect districts against further cuts as ASATR is reduced • Invest in the future of Texas—the students in our public schools

17. Overview of Key Legislation Legislative Day 2013

18. School Finance • SB 775 (Deuell) – Establishes a statutory schedule for the expiration of ASATR (rather than making it subject to appropriation), thereby cutting funding to some districts if the increase to the Basic Allotment is not large enough to offset the reduction • SB 509/SJR 33 (Williams/Whitmire) Proposing a constitutional amendment authorizing school districts to create school security districts and impose ad valorem taxes for crime prevention measures

19. Transparency HB 14/SB 14 (Pitts/Williams) – Requires school districts to inventory facilities (those existing and those under construction). This information must be posted and available. Also creates new posting requirements for the issuance of bonds.

20. Local Control • HB 669 (Ratliff) – Pushes the school start date back one week earlier, providing more flexibility over school calendars • HB 671 (Ratliff) - Modifies the rollback statute so that districts that have had a TRE are allowed to maintain any voter authorized pennies, providing flexibility in tax rates

21. Assessments & Accountability • Grassroots movement resulted from over-emphasis on standardized testing • Too much instructional time and money spent on standardized tests • Legislators seem receptive to change in both chambers

22. Assessments & Accountability House Bill 5 (Aycock) - Coursework • Creates one foundation diploma for which students may earn an additional endorsement in one of four areas: STEM, Business and Industry, Public Services, and Arts and Humanities. • Grants current ninth and tenth grade students the benefits of the new structure

23. Assessments & Accountability House Bill 5 (Aycock) - Assessments • Reduces the number of EOCs from 15 to five • Allows students to meet their graduation assessment requirement by passing ELA II, Algebra I, Biology and US History(eliminates the cumulative score requirement) • Eliminates the 15% requirement (optional for districts) • Allows satisfactory performance on Advanced Placement exams, SAT exams and the ACT to satisfy graduation requirements • No changes to assessments in grades 3-8

24. Assessments & Accountability House Bill 5 (Aycock) - Accountability • Establishes new three category rating system that evaluates schools on academic performance, financial performance and community and student engagement by assigning a rating of A, B, C, D or F • In addition to state ratings, districts are required to set goals and evaluate performance according to local community expectations

25. Assessments & Accountability Senate Bill 3 (Patrick) • Creates greater flexibility in coursework required for graduation with four graduation pathways (similar to HB 5) • EOCs are required for any course a student takes (could be as few as 8 or as many as 15) and cumulative score for graduation is unchanged • Eliminates 15% requirement • Does not address assessments in grades 3-8 or accountability

26. Assessments & Accountability Senate Bill 225 (Seliger) • Creates greater flexibility in coursework required for graduation with five graduation pathways • Eliminates the 15% and cumulative score requirements • 15 EOCs remain, but only 5 are required for graduation (Eng. III(reading & writing), Algebra I, Biology, U.S. History)

27. Assessments & Accountability SB 240 (Van de Putte) & HB 640 (Patrick) • Eliminates the 15% and cumulative score requirements • Requires 3 EOCs for graduation: English III (reading & writing) and Algebra I • Eliminates administration of 12 other EOC exams • Prohibits use of EOC scores for higher education admission and class rank • Allows SAT, ACT, AP, IB dual credit scores to satisfy EOC requirements

28. Other Assessment/Accountability Bills • HB 596 (Villarreal) administer 15 EOCs; only 5 EOCs required for graduation; make 15% requirement optional; limit STAAR and local benchmarking tests to no more than 10% of instructional days • HB 55(Strama) Release STAAR tests every year vs. every 3 years • HB 65 (Guillen) Prevent use of LEP scores in state accountability system for 3 years after student’s initial enrollment • HB 224 (Huberty) Repeal 15% requirement • SB 135 (Patrick) make 15% requirement optional

29. School Choice Senate Bill 2 (Patrick) – Charter Schools • Requires Commissioner to create a list of underutilized and unused school district facilities that may be purchased or leased by charter schools, at their option, for $1 (amended to be “fair market value”) • Establishes Charter School Authorizing Authority, composed of seven appointed members, to grant, monitor and revoke charters • Removes the cap on charters that may be granted in Texas • Eases process for districts to convert to home-rule school districts and reduces the number of laws that apply to such entities, such as educator certification, admissions, & class size requirements • Entitles open-enrollment charters to an instructional facilities allotment

30. School Choice Senate Bill 115 (Williams) – Students with Disabilities • Provides scholarships (vouchers) for students with disabilities to attend private schools • Scholarship would be equal to the amount of funding to which the school district in which the student resides would be entitled • Participating schools must administer appropriate state assessments to students and make results available to parents

31. Key Messages Legislative Day 2013

32. Key Messages • Restore funding for public schools • Protect schools from any further funding cuts • Invest in the future of Texas—the students in our public schools.

33. Key Messages • Provide greater local control to school districts and communities. • Ensure that public funding for schools remains with public schools. • Provide for a more reasonable number of state assessments, accountability that is meaningful to the local community, and the resources necessary for schools to achieve state expectations.