It’s here! Everybody has a take on the TX House’s School Finance Bill.

It’s here! It’s here!

No, not the phone book.

The Texas House’s bill, “The Texas Plan” to overhaul the State’s love-to-hate school finance system.

Now, every public school advocate will tell you, “this is a start.” But it’s also the best start Texas has seen in decades, and before horse-trading with the ultra-conservative Texas Senate begins, they are throwing their support behind the bipartisan bill.

Kevin Brown with the Texas Association of School Administrators tweeted:

HB 3, as currently filed, is landmark legislation that takes advantage of a once-in-a-generation-opportunity to dramatically improve funding for Texas public schools and transform the system. Thank you Speaker Bonnen and Chairman Huberty. #txed #thetimeisnow

— Kevin Brown (@KBrownTASA) March 5, 2019

The Center for Public Policy Priorities issued a release.

The Texas Public Policy Foundation has been pretty quiet, continuing to tweet their own priorities, but *shrug emoji.* Not a huge surprise.

The Texas Charter School Association has been similarly absent from the Twitter love-fest. The benefits for charters are more nuanced in the bill, and some of them may come out a little behind, because of the elimination of the Cost of Education Index. But an increase in base funding, and adjustment to the weighted funding for special populations may ease that. The radio silence may actually be the quiet patter of calculator keys.

There’s a lot for wealthy districts in there, including tax rate compression, and adjustments to the Robin Hood laws which took income from property wealthy districts to put into the State aid funds for property poor districts. Wealthy districts have long argued that Robin Hood was not taxing the rich to feed the poor, but was taxing anyone who could make ends meet in order to feed the State’s rainy day fund and corporate tax breaks (by reducing the State share of funding for schools). Some would like to see Robin Hood done away with forever, but Robin Hood was one of the mechanisms that kept Texas from being one of the most egregious offenders in the recent EdBuild report on the gross funding disparities between majority white districts and majority brown districts. We still have them, but Robin Hood kept us off the top of the list.

The bill creates two new chapters for the Texas Education Code, 48 and 49 to replace the current chapters that lay out the rules for property wealthy districts (chapter 41) and everyone else (chapter 42). It attempts to take Robin Hood back to its original intent.

Everybody is going to have their take, but the one I was personally most interested in was Seth Rau, SAISD’s guy at the Capitol. Seth’s legislative updates are required reading for those closely following #txed. (He also gives them live, on the last Thursday of each month.) SAISD has tons of interest in both ISD and charter policy, given their pursuit of partnerships.

Seth has given me permission to share highlights from his analysis of the school finance bill here. Enjoy.

• An additional ADA incentive if districts offer at least 30 additional half days of instruction. Many schools in SAISD would like consider this incentive moving forward. The extra days are not mandatory.
• Tax rates compression. My understanding is that it limits a district to $1.04 (as compared to the previous limit of $1.17), as all 8 of the enrichment pennies become “golden” pennies. In the $1.00 of Tier I that most ISDs in the state have, there will be a 4 cent compression going down to 96 cents. A hold harmless will exist for ISDs who don’t have 4% property value growth in this year.  In this tax rate compression, every district is guaranteed to not lose funds during the upcoming biennium. Therefore, some of the rates may be still be above $1.04 for a period of time until their rates can be compressed. The goal is continue tax compression in future session as value continue to rise. The rate of the “golden” pennies is decoupled from Austin ISD and is now 160% of the basic allotment. “Copper pennies” are now worth 80% of the basic allotment .
• The bill creates a definition of a full-time counselor in PEIMS as one that works 40 hours per week along with some other technical changes in PEIMS.
• The Commissioner gains discretion to make decisions to correct for unintended consequences of changing the school finance system that results in greater gains or losses than expected. The Commissioner gets 30 days for the Governor or the Legislative Budget Board to reject the change. If they do not reject the change, then the Commissioner may proceed in making the change. This section is only valid for the next 6 years.
• Basic allotment. It increases from $4730 (in code)/$5140 (in budget) to $6030. The small schools allotment has one formula for LEAs with fewer than 450 students and then another formula for LEAs with between 450 and 1600 students. Then, there is a new mid-sized adjustment formula for LEAs between 1600 and 5000 students.
• Throughout the bill there are a number of places where the SBOE’s authority for rule making is replaced by Commissioner rule making. One of those areas is giving the Commissioner more discretion on setting the appropriate indirect cost rates. 
• The bill also creates a .1 dyslexia allotment for all students who qualify statewide. The districts only receive this funding if a student who qualifies via an approved evaluation and the teachers have properly trained to provide the appropriate instruction. A new weight for pregnant students of 2.41 on top of the comp ed weight is created. 
• In very exciting news for (SAISD), our socioeconomic block system was included in the bill. The Commissioner has discretion on creating the specific system to be an additional multiplier onto the compensatory education weight. There will be 5 statewide tiers based on census blocks data for median household income, the average education attainment of the population, the percentage of single parent households, the rate of home ownership, and other metrics that the Commissioner deems appropriate. The tiers will be .225, .2375, .25, .2625, and .275. If there is not enough data, every student is the block qualifies for the .2 weight. LEAs receive the greatest possible funding option under any weight. This data must be updated by March 1st of any year.
• Another idea from SAISD made into the bill creating a .15 weight for dual language (one-way or two-way), which would replace the current .1 weight. I believe other non-English proficient students may be entitled to a .05 weight (such as native English speaker in a two-way program). However, I am not certain on that part, and please reply to me if you can better explain this provision. The old indirect cost rules are eliminated for both compensatory education and bilingual.
• The Career and Technical Education weight is expanded to include grades 6 through 8 and is also aligned with the Perkins Reauthorization.
• Another recommendation from the School Finance Commission that made it into the bill was the early reading allotment. Every bilingual or comp ed kid will receive an additional .1 weight in grades Kindergarten through 3. That can fund full-day Pre-K for bilingual and comp ed 4 year olds across Texas. All programs will default to full-day Pre-K but half-day Pre-K can still be offered if it is part of a partnership and for students under 4 years old. All Pre-K classes must meet the 2015 high quality standards.  
• For the transportation funding formula, linear density and daily costs are removed and it goes to a per mile rate that will be set each session by the legislature. We will be reimbursed for dual credit transportation and transporting kids from/to another ISD if programming is not offered in one of the locations. 
• The New Instructional Facilities Allotment (NIFA) is added into this bill and the cap is increased from $25 million per year to $100 million per year ($200 million per biennium). With the amendments we won last session, CAST Med in SAISD should qualify for this funding for the next two years.  
• The state’s minimum salary schedule is increased by 4.2% per year.
• The bill creates a new effective educator allotment putting in $3000 for each recognized teacher, $6000 for each exemplary teacher, and $12000 for each master teacher. Schools receive these allotments in multiples based on student tiers based on the compensatory weight tiers. Rural schools automatically get a two tier boost. Each boost is worth is $1500 for recognized, $3000 for exemplary, and $5000 for master. That means a master teacher in a 4.0 boost district could receive up to $32,000 extra. The commissioner will assign the tiers to each campus. All funds must used for salary, specific exams, certifications, or professional development. Each teacher must be reconfirmed at each tier each year. Previous master teacher designations do not apply.
• The commissioner will criteria involving local stakeholders for creating the distinctions between recognized, exemplary, and master teachers. The designations last for 5 years as long as teachers maintain their standard of performance. Any teacher that holds a national board certification is automatically a recognized teacher. Recognized teachers should be in the top third of teachers. Exemplary teachers should be in top 20 percent, and master teachers should be in the top 5 percent. The Commissioner can change the percentages. 
• Each district is required to set up their own district appraisal system with multiple years of student performance, student perception surveys (by 2022-3), educator leadership, observations, and other assessments. The district cannot receive funding under this bill until the Commissioner approves the local system. The Commissioner can audit the local system and suspend eligibility if the district is not compiling. The designation is valid in any Texas district or charter school. SBEC regulates parts of the designation. Teachers can hold multiple designations but can only receive funding for the highest. There will be a student performance study to see if this system raises student achievement. Commissioner has most of the rules control under this section.     
• The state will once again pay for a college assessment, a change that we welcome in SAISD as we currently pay for the SAT twice for our students. We believe this reimbursement will cover one of those assessments. 
• Recapture still exists but with the increased funding elements, its rapid growth should be reduced. The bill also guarantees that the amount of recapture can eat into a district’s FSP entitlement as was currently happening in some districts. Many provisions where Chapter 41 ISDs did not get full access like the CEI and transportation allotment in old form have been eliminated. The Cost of Education Index is entirely eliminated from the bill. 
• For the 56 LEAs (mostly charters from our understanding) that lose money under these changes, there is a formula transition grant to support them through this transition period. There is a 10% reduction in these funds for FY21, 20% reduction for FY22, and it’s eliminated after that. 
• The Legislative Budget Board is now required to estimate the percentage of the state share in the next biennium along with the compression that will be necessary to not increase the local share of funding. Districts can also adjust their tax rates during natural disaster or similar events that dramatically impact property values.   
• The bill also allows for the Commissioner to enter into agreements with government agencies, political subdivisions, higher education institutions, and relevant private organizations to collect data necessary to measure college and career ready outcomes. 
• Every district and charter (non-DOI exemptible) must adopt an early literacy plan to have 3rd grade reading targets for the next 5 years. The goals must be broken out by subgroup. It must include a targeted professional development plan for teachers who aren’t meeting their expected goals. Each district needs to produce an annual report with a public board meeting and have a district or ESC coordinator over their plan. 
• Through this bill, TEA is requiring access to all statewide teacher evaluations. Previously, it was optional for LEAs to share that data with the state. This data includes past evaluations for investigations. Districts can also create performance tiers.  
• Every district is required to have a Kindergarten readiness assessment. The Commissioner will expand the list of assessments that are eligible, and that office controls the rules. Results must be reported to TEA within 30 days. The state will be tracking both Pre-K and K results to see how they align with 3rd grade reading results.  
• The Gifted and Talented Allotment is eliminated from the current school finance formula. However, if a district eliminates the services, 12% of its funding for 5% of its students will be removed. 
• A blended learning grant program is also created. Priority goes to districts with the highest percentage of economically disadvantaged students. Districts must come up with a plan for blended learning that is approved by the Commissioner. It ideally should be implemented across the campus and at minimum a grade level at a time. Districts can receive the grant for up to 4 years. 
• It also creates an enhancement services grant to provide for more resources for Special Education students, mostly using Federal funds as part of the state’s remediation services. All of the SPED weights stay the same in this bill. School districts can help students and families out with the application for the grant funds. The program will prioritize students who are economically disadvantaged and reflect the diversity of the state. Vendors have to apply to the state to be able to provide services through this grant.  
• The state is also going to be required to produce a state of student achievement report statewide by December 1st of each year with significant outcome data. That being said, there is no direct outcomes based funding in the bill. 
• Other things that are repealed include the High School Allotment and others elements that are now outdated by what is mentioned above. It also clears out all of the other hold harmlesses currently in the school finance system. 
• Throughout the bill there is a lot of new terminology that is meant to be more citizen friendly and ideally make the bill easier/education code easier to understand. For example, property wealth/equalized wealth levels become local revenue.