Title: House Bill 1 Implementation Workshop June 2006
1House Bill 1 Implementation Workshop June
2006
2Agenda
- School District Efficiency
- Beyond School Finance
- States Fiscal Outlook and 80th
Session
- Introduction
- Tax Rate Issues
- School Finance Provisions
- Educational Employees
31. Introduction
- Review of Workshop Materials
- Special Session Review
4Special Session Success
- Court Order
- Legislative Cooperation
- Surplus
- No new school finance system
- Reforms
52. HB 1 TAX RATES
- Tax Rate Structure
- Basic MO Tax Rate 2006-07
- Basic MO Tax Rate 2007-08
- Rollback Rate Provisions
- Over-65 and Disabled Freeze
- Tax Rate Notices
6Tax Rate Structure
- Base tax rate based on qualifying reduction
percentage multiplied by 2005 MO tax rate - Additional tax rate of 4 permitted without
election - Possible additional tax rate without election
permitted for low current tax effort districts
(below 1.50) in 2007-08 - Additional tax rate permitted with election,
subject to 17 maximum above base
7Basic MO Tax Rate 2006-07
- 88.67 percent of 2005 MO Rate
- Example 1.50 x 0.8867 1.33005, or by TEA
definition 1.33 - No effective rate calculation for 2006-07
- Maximum remains at 1.50, or voted authorization
- First 4 available without election
- Remaining 13 requires election
- This could be higher than 13 for 2005 low-effort
districts since maximum MO rate is still 1.50
for most districts
82006-07 Rollback Rate Calculation (page 23)
- 2006-07 calculation based solely on 2005 tax rate
- Compression percentage of 88.67 percent applied
to 2005 tax rate with up to an additional 4 cents
available without election - Higher rate up to 17 cents permitted by rollback
election
9Rollback Election 2006-07
- For districts seeking to exceed 4 cent rollback
limit for 2006-07 school year, rollback election
date is Saturday, September 30, 2006 - 2006 rollback election cannot be held on any
other date - Election must be ordered not later than August
31, 2006 - If rollback election is to be called, tax rate
must be set by date rollback election is called
10Various District Examples
11Basic MO Tax Rate 2007-08
- Lesser of
- 66.67 percent of 1.50
- Example 1.50 x 0.6667 1.00005, or by TEA
definition 1.00, or - Effective rate calculation
- First 4 available without election
- Higher level for districts with less than 1.50
rate for 2005 - Maximum set at 1.00 17
- Remaining 13 requires election
- Exception for districts with 2005 MO rates
exceeding 1.50
122007-08 Rollback Calculation
- For districts at or below 1.50, the rollback
rate is the lesser of 1.04 or the effective rate
plus 0.04 - For districts above 1.50, the rollback rate is
the lesser of 0.6667 2005 tax rate plus 0.04
or the effective rate plus 0.04 - Circular provisions in HB 1 make calculation of
effective rate difficult - For modeling purposes, we use 0.6667 2005 rate
plus 0.04
13Rollback Election 2007-08 and beyond
- For Districts seeking to exceed 4-cent rollback
limit for 2007-08 school year, rollback election
date is governed by Tax Code 26.08(b) - Rollback election must be held between 30 and 90
days after tax rate set - If uniform election date, (i.e., 1st Tuesday
after 1st Monday in Nov.) falls within period,
election must be held on that date
14Rollback Election 2007-08 - and beyond, cont.
- Practical effect is that in order to avoid a
November rollback election, tax rate must be set
and rollback election called by August 3rd - Election must be held at least 62 days after
date election called under Election Code - 3.005 (earliest possible date October 3)
- 7 days prior to setting tax rate District must
publish truth-in-taxation notice in local
newspaper (latest possible date July 27)
15Rollback Election 2007-08 - and beyond, cont.
- If rollback election is triggered, there must be
2 public hearings. Tax Code 26.06 - Tax Appraisal certification is due by July 25.
Tax Code 26.01
16Over 65 and Disabled Freeze (page 34)
- Requires constitutional amendment
- Homeowners subject to this freeze would only see
tax reduction if current tax bill at the reduced
rate results in an amount less than tax freeze
amount - This is more likely to be issue with 0.50
reduction in 2007-08 - Possibility of this item being emergency
legislation during 80th Legislature so that a May
election can be held to grant a reduction in
current freeze levels
17Publication of Budgets (page 48)
- Requires districts to post on its website (or in
central office) a proposed budget summary with
publication of the notice of the budget - Must include aggregate per student spending on
instruction, instructional support, central
administration, district operations, and any
other category designated by commissioner - Must also provide comparison of proposed budget
to prior years budget - Must separate MO and IS tax rate
18Possible Function Groups for Aggregate per
Student Spending
- Instruction 11 (instruction), 12 (instructional
resources), 13 (curriculum and staff development) - Instructional Support 21 (instructional
leadership), 23 (school leadership), 31 (guidance
counseling), 32 (social work), 33 (health
services), 36 (extracurricular activities), 61
(community services), 95 (JJAEPs) - Central Administration 41 (central
administration) - District Operations 34 (transportation), 35
(food services), 51 plant maintenance, 52
(security), 53 (data processing)
19The Allocation of Texas Public School Expenditures
203. HB 1 FINANCE-RELATED PROVISIONS
- Formula Elements
- Hold Harmless Basic Level
- Hold Harmless Adjustments
- Yield for First 4
- Yield for Additional Tax Increases
21Formula Elements (pages 1-4)
- Guaranteed yield, basic allotment, and equalized
wealth level all reset at 88th percentile
(estimated at 319,500 per WADA) - Resulting increases (2006-07)
- guaranteed yield from 27.14 to 31.95
- basic allotment from 2,537 to 2,748
- equalized wealth from 305,000 to 319,500
- Austin ISD yield 41.21
22Projected 2007-08 Yields
- 88th percentile yield 35.24 (MCA)
- AISD yield 43.08 (MCA)
- Basic Allotment 3,031 (MCA)
23Hold Harmless Basic Level (page 6)
- Revenue set to best of
- 2005-06 revenue per WADA (local taxes recapture
state aid) - 2006-07 revenue per WADA at 2005-06 tax rate
- 2006-07 revenue per WADA at 2006-07 effective tax
rate under truth-in-taxation
24Hold Harmless Adjustments (page 6)
- Basic level adjusted for
- Pay raise
- 2,500 per teacher, counselor, nurse, librarian
- High school allotment
- 275 per ADA in 9-12
25Chapter 42 (Base Formula Revenue)
26Chapter 42 Additional Formula (b)
27Chapter 42 Additional Formula (c, maximum tax)
28Chapter 41
29Chapter 41 Additional Formula (b)
30Chapter 41 Additional Formula (c, maximum tax)
31Hold Harmless, cont.
- Revenue limitation (claw back) - reduction of
formula funds to basic hold harmless level pay
raise and high school allotment funds - Appears to apply to increases associated with
changes in the basic allotment, guaranteed yield
and equalized wealth level - Reduced for tax effort below 88.67 percent /
66.67 percent of 2005-06
32Hold Harmless, cont
- The hold harmless calculation includes
- the 110 per WADA that districts currently
receive - for chapter 42 districts that participated in a
chapter 41 agreement in 2005-06, the amount of
any gain that district received as a result of
the agreement (minus any payment to a third
party)adjusted for 1.50 - any adjustments made for declining ADA
- any adjustments made for declining property
values - any adjustments made due to protests by a major
tax payer
33Hold Harmless, cont.
- Outside hold harmless technology allotment,
wage increase for support staff, grant programs,
penalty and interest on local tax collections,
investment income, Educator Excellence funding
34Basic Level Revenue Examples
35Yield for First 4
- Yield for first 4 of additional tax effort set
to higher of - Austin ISD yield 41.21 or actual revenue level
- Available without election, regardless of year
chosen - No recapture permitted
- Estimated cost to state 463.3 million
- Total revenue 951.9 million
36Yield for Additional Tax Increases (2006-07
2007-08)
- Yield for additional tax effort after first 4
set to - 31.95 per WADA per penny of tax effort
- Available with election, except for certain
districts with sub 1.50 current tax effort - Recapture required for district with greater than
319,500 per WADA
37Additional 2 in 2008-09
- Austin ISD yield for total of 6 in 2008-09
- No recapture
- Voter approval required, in some circumstances it
may be possible to access this without an election
38Other Finance Issues
- TIF/TIRZ Payments
- Wages for Support Staff
- Textbook Proclamations
- PK Eligibility
- Repeal of Payment Delay
394. HB 1 EDUCATIONAL EMPLOYEES
- Teacher Pay Increase
- Health Care Supplement
- Educator Excellence Award Program
- School Leadership Pilot Program
- Mentors
40Teacher Pay Increase (page 91)
- 2,000 net pay increase for teachers/
counselors/nurses/librarians (composed of 2,500
pay increase and elimination of 500 health care
supplement) - Based on 2005-06 salary schedule, applied to
2006-07 school year - Health care supplement transferred to pay
increase for personnel other than teachers,
counselors, nurses, librarians - 802 million 2006-07
- States contribution to TRS 41-44 million
41Pay Raise, cont.
- Each district is required to add an additional
250 per month to local salary schedules - (2,750 for 11 month and 3,000 for 12 month)
- Funding provided in target revenue 2,500
multiplied by number of full-time teachers,
counselors, nurses, and librarians - Based on SB 4 (1999) precedent step increases
provided in the 2005-06 salary schedule must be
provided to the employees in addition to the 250
per month, regardless of whether district did not
intend to provide for step increases prior to HB 1
42Student Achievement Program (page 99)
- 100 million grant program for 2006-07
- Requires appropriation in 2007-08
- Only campuses in top half with respect to
students who are economically disadvantaged, and
rated academically acceptable or better are
eligible - 75 percent of award to be used for teacher pay of
3,000 to 10,000 - Can only be awarded to teachers who demonstrate
improved student achievementmust take into
account teachers assignment - Plans developed by campus-level decision-making
body
43Educator Excellence Program (page 105)
- Establishes fund of 1,000 per classroom teacher
in state (840 in 2007-08) - Requires appropriation
- 60 percent of awards must be used for classroom
teachers with improved student achievement - Remaining awards can be used for stipends for
mentors, shortage area teachers, post-graduate
degrees - Districts must apply for funding
- 261 million in 2008, increasing to 328 million
by 2011
44Mentors (page 98)
- Allows district to provide for mentor teachers
- Allows funds appropriated to program to be used
for stipends, mentor training, and time for
mentor teachers to provide mentoring - 13.3 million in 2007
455. HB 1 SCHOOL DISTRICT EFFICIENCY
- FIRST
- Shared Services
- Internal Auditor
- Review of the Accounting System and Software
- Spending Targets
46Change in FIRST (page 48)
- Financial accountability rating system must
- distinguish among school districts based on
levels of financial performance - include procedures to provide additional
transparency to public education finance and
enable the commissioner and school district
administrators to provide meaningful financial
oversight and improvement
47Shared Services (page 46)
- Allows commissioner to include an indicator in
FIRST that measures the effectiveness of
administrative management through the use of
cooperative shared service arrangements, if
feasible (Dec. 2006 determination for 2007-08
school year) - Also allows commissioner to require a district or
charter to enter into shared administrative
service arrangement if the district receives a
failing rating under FIRST - Requires Service Centers to notify districts of
opportunities available and assist school boards
with these opportunities
48Internal Auditors (page 48)
- If a district employs an internal auditor, the
board of trustees shall select the auditor and
the auditor shall report directly to the board
49Review of Accounting System (page 49)
- Commissioner to contract with third party to
review or make recommendations on accounting
system, including - Review of accounting system to ensure more
transparency and more thorough information on
campus spending - Facilitate program evaluations (including comp.
ed.) - Adjust reporting requirements based on district
size - Report due to Legislature January 2007
- 300,000 in 2007
50Evaluation of Accounting Software (page 50)
- No later than January 2007 the commissioner shall
submit a report to Legislature on the benefits
providing school districts with standardized
accounting software - Report shall include potential cost savings,
accountability benefits, and any personnel
required for implementation - 2 million in 2007
51Spending Targets (page 51)
- Requires commissioner to annually establish and
publish spending targets for each district
(2006-07) - Targets will be based on best practices of
school districts and campuses - Categories to include instruction, central
administration, district operation, and any other
category determined by commissioner - Boards that choose to exceed limits must adopt
and publish a resolution justifying the action - 1.1 million in 2007, 100,000 per year
thereafter
526. Beyond School Finance
- Elections
- School District Efficiency
- New Accountability Provisions
- Expanded Role of TEA
- High School Completion College Readiness
Programs - Miscellaneous
53School Board Elections Generally (page 141)
- Board Elections Must be held on the same date
in the same place as municipal elections unless
they already coincide with federal elections
(Effective for 2006-07 elections, upon
preclearance of Justice Dept.) - If no municipality, move to November election
date (county/state) - Board terms are required to be adjusted to
accommodate new election date and lengthening
terms from May to November is permissible
54Districts Located Within City Limits
- District chooses the municipality within the
school district to hold joint elections, but
municipality chooses election date - Early voting may be conducted jointly
- Voters may be served by a common polling place or
at locations outside the boundary of the election
precinct or political subdivision if the location
can adequately and conveniently serve the voters
55Districts Not Within City Limits
- If a district is not located within city limits,
it must move its election to the 1st Tuesday
after the 1st Monday in November to coincide with
county election date - Election will be held jointly with county
- Early voting may be conducted jointly
- Voters may be served by a common polling place or
at a location outside the boundary of the
election precinct or political subdivision if the
location can adequately and conveniently serve
the voters
56Education Research Centers (page 40)
- Commissioner and the THECB are authorized to
establish three centers for education research - Centers must conduct research on impact of state
and federal programs, educator preparation
programs, school finance, and best practices - Agency funding limited to start up costs
- Centers may accept grants, gifts, and fees
57Public Access to PEIMS Data (page 43)
- TEA must extend RFP to develop and implement a
Web-based process that makes available all
financial and academic performance data submitted
through PEIMS for districts and campuses - Commissioner to receive input on requirements
from an advisory panel comprised of educators,
stakeholders, business leaders, and other
interested parties - Results should be summarized and easily
understood by the public - Implementation by August 2007
58Electronic Student Record System (page 52)
- Requires school districts, open-enrollment
charter schools, and higher education to
participate - Enables electronic transfer of students course
or grade completion, teachers of record,
assessment results, special education services
received, and personal graduation plans - To be implemented for 2007-08 school year
59Best Practices Clearinghouse (page 45)
- TEA and LBB to establish online clearinghouse and
make the information available to school
districts - Third-party to develop and maintain system (RFP)
- Examples of best practices solicited from LBB,
Education Research Centers, Exemplary
Recognized Districts, Campuses, and charter
schools - Best Practices related to
- Instruction
- School finance
- Resource allocation
- Business practices
- Compensation and incentive systems
60Uniform School Start Date (page 138)
- School start date is the 4th Monday in August
- No end date
- No waiver option, unless district operates a
year-round program - Effective for the 2007-08 school year
- Does not apply to charters
61Optional Flexible School Day (page 123)
- For students in grades 9-12 who are dropouts or
at risk of dropping out, or attend a campus that
is implementing innovative redesign or early
college plan - Provides flexibility in the number of hours per
day a student can attend - Provides flexibility in the number of days a
student can attend - Students can enroll on a full-time or part-time
basis - Allows accumulation of instructional time to earn
state funding
62End-of-Course Assessments (page 126)
- Requires TEA to ensure that any end-of-course
test developed must, to the extent practicable,
be used to determine placement in higher
education courses with the same subject matter - No new tests, other than current law
63Student Transfers (page 142)
- If a student is transferred to another campus for
special education services, another student
living in the same household must be allowed to
attend the same school - Applies only if appropriate grade level is
offered at that campus - Excludes residential facility
- Transportation not required
64Bilingual Education/Special Language Programs
(page 58)
- Specifies that transfers out of a program may
occur more than once - TEA must approve tests
- Establishes detailed procedures for evaluating
students who transfer out of program (performance
on TAKS, grades, number of credits earned toward
graduation, etc.) - The evaluation must occur within the first two
years after the student is transferred out of a
program
65Accountability Provisions Under HB 1
- Academic Excellence Indicators
- Measure of Annual Improvement in Student
Achievement - Changes related to challenges of accountability
ratings and sanctions - Accreditation
66Academic Excellence Indicators (page 63)
- Two new indicators added to AEIS
- Measurement of progress toward preparation for
postsecondary success - Performance data on reading proficiency in
English and one other language to calculate
toward progress toward dual language
proficiency - Disaggregated student data
- Collect in 2007-08 evaluate in 2008-09
67Annual Improvement in Student Performance (page
59)
- Commissioner must determine method for measuring
annual improvement in student achievement on
assessment instrument - TEA will determine expected level of annual
improvement and report whether a student fell
below, met, or exceeded the agencys expectation
for improvement - Additionally, TEA will determine the necessary
annual improvement for a student to be prepared
to pass the exit-level assessment required for
graduation and report whether at student fell
below, met or exceeded the target - Begins with 2007-08 school year
68Challenging Accountability Ratings and Sanctions
(page 86)
- Commissioner to establish a process for
challenging academic or financial accountability
ratings - Commissioner appoints advisory committee to make
recommendations on a challenge (could be limited
to a written submission) - Commissioners decision is final and may not be
appealed to district court
69Sanctions for Closure or Alternative Management
(page 87)
- District or charter school that seeks to appeal a
decision related to closure or alternative
management may appeal to the State Office of
Administrative Hearings (SOAH) - Decision by SOAH is final and may not be appealed
to district court
70Accreditation (page 64)
- HB 1 added 3 levels of accreditation
- Accredited
- Accredited-warned
- Accredited-probation
- Based on financial and academic ratings
- A district on warned or probationary status must
notify parents and property owners of status - Commissioner may revoke accreditation and close
district - If not accredited a district is prohibited from
acting as a public school receive no state aid
71District Sanctions (page 64 )
- Districts failing to satisfy accreditation
criteria, academic performance standards, or any
financial accountability standard - Public notice, hearings, improvement plan
- On-site investigation
- Agency monitor
- Conservator
- Management team (non-profit or other school
district) - Board of managers
72Academically Unacceptable Campuses (Page 71)
- A campus is considered academically unacceptable
if performance is below any standard under Sec.
39.073(b) - Commissioner may permit innovative design or
require any of the following actions - Public notice, hearings, parental involvement,
district and campus-level planning, improvement
plan, campus intervention team
73Technical Assistance/Campus Intervention Teams
(page 75)
- In 2006-07, commissioner shall assign a campus
intervention team or technical assistance team to
a campus based on 2005-06 rating - Technical assistance team must be appointed to a
campus that is rated academically acceptable in
current year but would be rated unacceptable the
following year - If a campus is rated unacceptable for two
consecutive years, commissioner must order
reconstitution
74Continued Intervention (page 79)
- Campus intervention teams determine which
employees would be retained - Principals could not be retained unless
commissioner approves - Teachers teaching subjects tested on assessment
can only be retained if the team determines
significant academic improvement by students
taught by the teacher
75Continued Intervention (page 79)
- Intervention teams remain in place until campus
is rated academically acceptable for two
consecutive years unless commissioner determines
after one year success is likely - Commissioner must seek outside management if a
campus is rated academically unacceptable for two
years after the intervention team
76Alternative Management (page 81)
- Proposals from qualified non-profit entities
- Another school district within same ESC
- Performance contract no more than 5 years
- For specific condition, academically unacceptable
campus may receive one year waiver and contract
for technical assistance
77Professional Services (page 85)
- In addition to other sanctions, commissioner may
order district or campus to acquire professional
services at district or campus expense to address
applicable financial, assessment, data quality,
program or governance deficiency
78College Readiness
- End of Course Assessments
- P-16 College Readiness Strategic Plan
- Programs to Enhance student success
- Higher education course redesign
79High School Completion and Success College
Readiness (page 126)
- TEA must develop standards, provide guidance and
identify exceptional programs - Use of high school allotment
- Effective 2006-07
- Rulemaking required
80Four Years of Math Science (page 122)
- Recommended and advanced curriculum must include
four years of math and science (four courses in
each subject of the foundation school curriculum) - Required for those students entering the 9th
grade in 2007-08
81College Credit for High School Students (page 122)
- All school districts must provide an opportunity
for students to earn twelve hours of college
credit by the Fall of 2008 - Upon request, a public institution of higher
education must assist a school district in
developing and implementing
82High School Allotment (page 126)
- 275 per ADA for grades 9-12
- Districts will need to report expenditures in
similar manner as special program allotments
83High School Allotment Cont. (page 126)
- Must use funds to
- Implement college readiness programs for
underachieving students - Implement programs that encourage students to
pursue advanced academic opportunities (AP, dual
credit, IB) - Implement programs that encourage students to
take academically rigorous courses (4yrs math
science) - Implement program that aligns curriculum for
grades 6-12 with postsecondary curriculum and
expectations - Other high school completion programs approved by
commissioner
84Anaphylaxis Medication (page 140)
- Extends self-administration of prescription
medication by students to include medication for
anaphylaxis - Student must demonstrate skill to administer and
must be authorized by physician or health care
provider - Effective beginning with the 2006-07 school year
85School Breakfast Lunch Program (page 38)
- TDA, TEA and the Health and Human Services
Commission must ensure that applicable
information obtained by each entity is used
quarterly to identify children who are eligible
for free or reduced-price breakfast and lunch. - TDA will determine if it is feasible for
districts to verify student eligibility through
direct verification of information maintained
under the food stamp and Medicaid programs
86Texas Governors School (page 124)
- TEA may select a public senior college or
university to administer a summer residential
program for high achieving high school students - Curricula may include math, science, humanities,
leadership, and public policy - Program must be at least 3 weeks
87Technology Immersion Pilot (page 145)
- Project was created in 2003 to study the use of
technology in participating schools and districts - Extends the program to 2011
- Removes the provision prohibiting TEA from
spending more 1 million on the project - Allows use of undedicated and un-obligated
general revenue funds for the program no
appropriation
88Miscellaneous Provisions
- Joint Interim Committee to Review State
Assessment - Appointed by Speaker and Lt. Governor
- Study impact on quality of instruction, teacher
morale, and student motivation - Report due to legislature by September 2007
- TEA Sunset
- Extends sunset review process of TEA to 2012
897. FISCAL OUTLOOK AND 80TH SESSSION
- Appropriations
- State Finances
- 80th Legislative Session
90Appropriations
- House Bill 1
- 2006-07 fiscal note 3.922 billion
- Property tax reduction 2.148 billion
- Additional education spending 1.774 billion
- 3.825 billion appropriation to TEA for 2007 97
million short - TEA is directed to come up with funding plan
- Plan to be approved by the Governor and LBB
- Look to federal funds and other sources to fill
gap - Textbook Costs of 294.5 million (unresolved)
- Initial 2008-09 state agency budget requests to
be based on 10 reduction - Constitutional limit on growth in appropriations
to be a factor in 2008-09 appropriations debate
91States Fiscal OutlookUnder HB 1(Amounts in
Millions)
92(No Transcript)
93Issues for the 80th Session
- State financial plan
- Special Session Leftovers
- Tax rates, Tax freeze, Appraisal caps
- Financial accountability studies
- Hold harmless issues
- Adequacy challenge
- Interim charges
- Facilities
- Accountability review
- Ethics
- TRS
94- Johnny L. Veselka
- Executive Director
- Amy Beneski
- Associate Executive Director
- Governmental Relations
- J. David Thompson, III
- TASA Legislative Consultant
- Partner, Bracewell Giuliani LLP
- Houston, TX
- 406 East 11th Street
- Austin, TX 78701
- 512/477-6361 FAX 512/482/8658
- www.TASAnet.org
95- Lynn M. Moak Joe Wisnoski
- Amanda Brownson, PhD
- Associates
- Daniel T. Casey Bob Popinski
- Research Analyst
- Partners Kathy Mathias
- Larry Groppel
- Consultants
- 1801 N. Lamar Blvd., Suite 202
- Austin, Texas 78701-1050
- 512/485-7878 512/485-7888 (fax)
- http//www.moakcasey.com