Legislative Update May - Schedschd.ws/hosted_files/regiononeschoolboardconfere2017/6f/Region One... · Legislative Update May 2017 1 ... May 2017 MOAK, 2CASEY &ASSOCIATES. Legislative

Legislative Update May 2017

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Rio Grande Valley School Boards Legislative Update

“The Dust Has Not Settled Yet”

MAY 2017

10 Days Remaining

May 2017 MOAK, CASEY & ASSOCIATES 2


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IN THE BEGINNINGThere was money (in the Rainy Day Fund and in the Highway Fund).

There was leadership (for the far right agenda).

There was time (130 days ago).

There was public civility (in the election of Speaker Straus).

The Revenue Outlook

Major Revenue Surplus in 2015

Slow‐down of Growth in State Tax Revenue

Dedication of Sales Tax Funds to Highways

Franchise Tax Reduction

Relatively Tight Budget Outlook


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Important DatesSaturday, May 20, 2017 (131st day)—last day for House committees to vote out Senate bills

Tuesday, May 23, 2017 (134th day)—last day for House to consider Senate bills on second reading

Sunday, May 28, 2017 (139th day)—last day for House to adopt conference committee reports

Monday, May 29, 2017 (140th day)—Sine Die

Sunday, June 18, 2017 (20th day after session)—last day the governor can sign or veto bills passed during the regular session


Legislative Tensions



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Parliamentary MessConservative group of legislators has acted to kill many items of legislation

A compromise not reached

Actions could force special session

Speaker Straus Sends Letter to Lt. Governor Patrick Suggesting How to Avoid Special Session

“Texas lawmakers can avoid a special session if the House and Senate can pass two bills, House Speaker Joe Straus said in an unusual letter sent late Monday to Lt. Gov. Dan Patrick.” (Texas Tribune May 16,2017)

•Senate Bill 1

•Senate Bill 310 (Sunset bill)



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Lt. Gov.RespondsSpecial Session if House does not agree to property tax reform and Bathroom bill

School Finance bill depends on inclusion of vouchers

A‐F delay one year only

No use of Rainy Day Fund for ongoing projects


Other Points of Conflict•Major methods of finance

• Rainy Day Fund use, FSP payment deferral, sales tax diversion to Highway Fund Delay

•Higher education funding• Special program vs. Formula funding

•Governor’s programs• Pre‐kindergarten funding ($118 million), Texas Enterprise Fund ($43 million)

•Pressure on budget due to Senate priority bills: vouchers, bathroom bill, more restrictive rollback provisions



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Major Methods of FinanceHOUSE

•Local ISD property value growth: $3.6 billion

•FSP payment delay: $1.875 billion

•Increased recapture: $1.1 billion

•Rainy Day Fund: $2.5 billion

•Underfund Medicaid: $2.0 billion GR

•PSF to ASF Transfer: $300 million

•Contract Containment: $500 million

SENATE

•Local ISD property value growth: $3.6 billion

•FSP payment delay: $1.875 billion

•Increased recapture: $1.1 billion

•Sales Tax Diversion to Highway Fund delay: $2.5 billion

•PSF to ASF Transfer: $300 million


Hamstringing the Budget•Reduction in Oil and Gas Transfer to Rainy Day Fund(2014): Highway Fund receives half of transfer, approximately $1 billion per year

•Franchise tax reduction (2016): $1.25 billion per year

•Homestead exemption increase (2016): $600 million per year

•Sales tax diversion to Highway Fund (2018): Up to $2.5 billion per year

•Continued franchise tax reduction (SB 17, HB 28 FY 2020): $550 million to $1.5 billion per year



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School Finance

Foundation School Program•Full funding in both bills for enrollment growth‐‐$2.7 billion cost

•Property value assumptions the same in both

•Austin yield increase in both bills‐‐$1.5 billion cost

•Value growth savings exceed the cost of student growth and Austin yield increase‐‐$3.6 billion savings

•Elimination of ASATR‐‐$600 million savings

•House puts the extra savings to the state back into the FSP



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MAJOR BILLSThe Major Bills◦Senate Bill 1/House Bill 2 (General Appropriations)

◦House Bill 21 (School Finance)

◦House Bill 22/Senate Bill 2051 (Accountability)

HB 21 by Huberty•Eliminates the transportation allotment (approximately $680 million for the biennium)

•Eliminates the high school allotment (approximately $750 million for the biennium)

•Eliminates the staff salary allotment (approximately $273 million for the biennium)

Eliminates the Chapter 41 1992‐93 revenue level hold harmless (approximately $53 million for the biennium)

•Establishes a new weight of 0.10 multiplied by the adjusted allotment for students with dyslexia or related disorders



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HB 21 by Huberty, cont’d. •Increases the bilingual weight from 0.10 to 0.11 (10% increase)

•Includes "technology applications" courses and eighth grade CTE courses in those eligible for the CTE weight

•Establishes a financial hardship transition program of $125 million in 2017‐18 and $34 million in 2018‐19 to offset losses from features of the bill or the end of ASATR

•Begins a six year phase‐in that would eliminate the distinction in the small school district adjustment within the Foundation School Program

•intent to increase the Basic Allotment from $5,140 to $5,350 in the appropriations bill with payment delay


HB 21, cont’d. •Increases NIFA allotment in statute to be up to $1,000 per ADA, extends to repurposed facilities• Proration would occur if exceeds the $23.75 million appropriations cap



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Senate CSHB 21•As adopted by the Senate Education committee:

• Keeps all underlying provisions listed for HB 21 as passed by the House, except:

• Removes language for method of finance ($1.875 billion FSP payment delay)

• Restricts hardship grant to approximately 30 school districts• In the process, MCA estimates that only about one‐third of $125 million is needed to fund first year of hardship grant

• Districts are not allowed to benefit from both the hardship grant and value decline provision


Senate CSHB 21, cont’d. •As adopted by the Senate Education committee:

• Creates an “Education Savings Grant” voucher program for students with disabilities, eligibility includes: • Covered under the Individuals with Disabilities Education Act, or

• Section 504 of the 1973 Rehabilitation Act

• A child with a disability who is eligible to attend public school and has attended public school for the entire preceding year.

•Senate is offering reduced plan with limited detail available



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TRS‐Care Funding•HB 3976 by Ashby (passed from House and) would fund approximately $633 million of estimated $1 billion shortfall

•$500 million from Rainy Day Fund

•State contribution increase from 1.0 to 1.25 percent

•School district contribution increase from 0.55 to 0.75

•Premium and deductible increases for retirees• $3,000 deductible for pre‐65 retiree individual coverage

•Under the age of 65 plan would be transitioned to a high deductible plan

•Adds an open enrollment provision for retirees when they become 65


TRS Care Pre‐65 Retiree Coverage who are not age eligible for Medicare would move into a high deductible plan in 2018.

•$3,000 deductible includes all medical and prescription

•$7,150 Maximum out of pocket expenses

•After deductible is meet 80% of prescription coverage is covered

•2018 phase in begins with $200/month premium that is projected to rise to $370 per month by 2021

•65 and over transitioned to Medicare Advantage with premiums of $146

•Passed House

•Senate State Affairs Substitute leaves method of finance unclear ($500 million RDF), but leaves underlying package untouched except for new $20 million for prescription drug program



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Property Tax

Property Tax•SB 2 by Bettencourt

• Moves appraisal roll delivery to July 10th

• Pushes back date of early estimate of value from April 30th to May 15th

• Requires rollback elections be held on the November uniform election date

• Creates a Property Tax Administration Advisory Board to assist with and oversee the appraisal process

• Passed by Senate• House Ways and Means removed rollback provision and uniform election dates



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Ballot Language•SB 460 by Lucio

• Require a political subdivision holding an election for general obligation bonds

• Must post any sample ballot prepared for the election on their website.

• Prohibits a political subdivision from issuing a bond to purchase, construct, or improve personal property if the average maturity date of the bonds exceeds 120 percent of the projected average useful life.

• Prohibit a political subdivision from using unspent bond proceeds for any other purpose than what the bonds were issued for unless the specified purpose is accomplished or abandoned and an election is held in which a majority of voters approve the use for a proposed purpose.

• Passed Senate and House Investments Committee


Ballot Language•SB 461 by Lucio

• Requires detailed information be included on bond propositions for current and proposed total bond debt

• Additional information includes: current and future total bond debt secured by ad valorem taxes, as well as the impact the approval of new debt will have based on a standardized valuation.

•Committee Substitute in Senate• Removes additional language from ballot, but still requires the ballot include tax impact per $100,000 valuation

• Creates informational documents that are available to voters on the district website and at the polling location

• Infographic is to include a table of outstanding and proposed debt

•Passed by Senate and House Elections Committee



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Alternative Rollback RateHB 486 by VanDeaver

•Authorizes ISD that has had its adopted tax rate approved by a TRE to lower its M&O rate, and then within the next 10 years increase the rate back to the previously approved rate without having to hold another TRE

•Applies only to school districts that have had their adopted tax rate approved by TRE, and subsequently lower their M&O rate in the 2016 or a subsequent tax year

•Applies beginning with the 2018 tax year

•Passed by House and pulled from agenda of most recent Senate Education hearing


Assessment and Accountability


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HB 515 by Rep. VanDeaverEliminates:

STAAR Gr. 8 SS, EOC test in US History

Optional STAAR tests (Algebra II, English III)

Retesting in Gr. 5 & 8 in Reading & Math (no high stakes)

TAKS retesting (students shift to SAT, ACT, TSI with cutoff points linked to TAKS standards)

Adds:

Civics test for graduation Results used in accountability Administration, scoring, reporting are all at district expense

Accelerated Learning Committees for Gr. 3, 5, and 8 in R/M

Required test release cycle Shifts authority for test administration to COE

Revised method of assessing writing by 2021 based on pilot project

May 2017 © MOAK, CASEY AND ASSOCIATES 29

HB 22 by Ch. Huberty

• Stability, support and lead time◦Maintains 2016 Manual for SYs 2017‐18 & 2018‐19◦ Requires TEA to model results of new system – twice◦ Delays implementation of A‐F ratings to Aug. 2020◦ Indicators and standards must be announced earlier in the year (9/30 or as soon as possible after that, with stakeholder input)

◦ TEA to produce 250‐word descriptions of each domain◦ TEA to produce explanation of system suitable for districts to share with parents



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HB 22, cont’d.•More comprehensive view of performance◦More non‐test‐based indicators are included

◦ Three rather than five domains; NO overall ratings◦ Student achievement

◦ School progress

◦ School climate

◦ State assessment data contribute no more than 50% of the weight in the student achievement and school progress domains


HB 22, cont’d.

•Multiple feasibility studies by TEA◦ Progress measure for students served in special education◦ If NOT adopted, explanatory legislative report by Dec. 1, 2022

◦ Statewide school climate survey over 3 years◦ Report results in Sys 2020‐21 and 2021‐22

◦ Includes administrators, students and parents

• Joint legislative committee to contract and oversee teacher engagement survey



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HB 22, cont’d.

• More about ratings and sanctions◦All districts and campuses can get “A’s”

◦Differentiation between grades of “D” and “F” ◦ “D’s” re‐categorized to acceptable

◦ Sanctions determined by results in school progress domain

◦New procedures to support acceptance of turn‐around plans

◦ PEG aligned to current year rating


Continuing Long Term IssuesEquity ‐ Potential elimination of ASATR, 1993HH

Adequacy: Slight Progress if BA increased

Educationally Disadvantaged: Slight Progress

State Use of Local Property Tax


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Dr. Curtis CulwellBob PopinskiChris GrammerDee CarneyJoe WisnoskiMaria Whitsett, Ph.D.Terry FaucheuxRebecca FloresCatherine Knepp

Lynn M. Moak

Daniel T. CaseyPartners Kathy Mathias

Larry Groppel Ed. D.Thomas V. Alvis Ph. D.Alicia Thomas, Ph. D

Consultants

Susan MoakKari Ruehman

Administrative Staff

400 West 15th Street, Suite 1410, Austin, Texas 78701‐1648Ph. (512) 485‐7878 Fax (512) 485‐7888

www.moakcasey.com

35May 2017 MOAK, CASEY & ASSOCIATES

Documents

Legislative Update May - Schedschd.ws/hosted_files/regiononeschoolboardconfere2017/6f/Region One... · Legislative Update May 2017 1 ... May 2017 MOAK, 2CASEY &ASSOCIATES. Legislative