Board Budget WorkshopHB 3 Funding Update and Fiscal Outlook

January 21, 2020

Statutory Change Effect of Statutory ChangeNon-administrative Compensation 30% of gain in revenue

Special Education Allotment Mainstream weight increases to 1.15

Dyslexia Allotment New weight of .10

Compensatory Education Allotment Weights based on census blocks (.225 to .275)

Career & Technology Allotment Expands funding to grades 7-8

Early Education Allotment New weight of .10 for ED in K-3 to fund ½ Pre-K

Repealed: GT and HS Allotments GT program still required without direct funding

Transportation Allotment Based on actual miles (not linear density) and benefits recapture districts

Statutory Change Effect of Statutory ChangeCCRM Outcomes Bonus New allocation for graduates that are CCMRBilingual Ed Allotment New allocation to fund Dual Language ProgramMentor Program Allotment New allocation to fund mentor stipends and trainingCollege Prep Assessment Reimbursement

New allocation to reimburse cost of college preparation assessment (SAT/ACT)

Certification Examination Reimbursement

New allocation to reimburse student certification exam fees

Teacher Incentive Allotment

New allocation to fund additional teacher compensation based on a local designation system

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Statutory Change Effect of Statutory ChangeReduced Tier One tax rate by 7% in Year 1 (FY20)

Tier One tax rate is based on the first $1 of tax effort, compressed to $0.93. Tax rate from $1.08 to $1.01

Golden Pennies increased from 6 to 8 cents

Enrichment tax rate is for tax effort above tier one; district allowed to use all 8 cents (2012 TRE)

Year 2 (FY21) Tier One tax rates tied to 2.5% property tax base cap

Tier One tax rate further compressed if property tax base grows by more than 2.5% a year

Prior Year property values to Current Year as certified by Comptroller February 2021

Tax rate adoption in August 2020 based on maximum compressed rate issued by TEA in June using preliminary certified property values

Why Tax Rate Compression? Creates long-term systemic balance between state and local share of funding public education and to reduce the growth rate of property taxes and reliance on recapture as a method of finance for the state.

Statutory Change Effect of Statutory ChangeExcess of Tier One Entitlements Includes increases in weighted funding, Available

School Funding and all allotments

Tax Rate Compression Decrease in local tax revenue; property value growth capped at 2.5% for future years tax rate calcs

Basic Allotment Adjusted Additional $1,020 per student to make up for repeal of CEI, move from prior to current year property values, repeal of GT and HS allotments

Recapture Payment to State Lump sum payment in August; no longer have monthly payments beginning in February

What is Recapture? Texas Education Code makes provisions for certain districts with excess local revenue to transfer local tax revenue into the Foundation School Program for distribution to other districts.

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❖ Required if offer a half-day program

❖ Eligible 4-year old students

❖ Waiver requests – must first seek out public private partnerships

❖ Construction bonds for space – must first exhaust private partnership

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❖ stablishes Outcome Bonus▪▪▪

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❖ evelop and post CCMR plans that set specific annual goals

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Questions?