Near-end-of-session overview
BUDGET
HB 1, the state budget, has passed both the House and Senate, with billions of dollars of differences between the two versions. A conference committee of five House and five Senate members has been appointed and will spend many hours over the next couple of weeks negotiating a compromise bill.
Senators have concerns with the House version of the budget because it cuts too deeply – nearly $8 billion from public schools alone, which is $4 billion more than the Senate version cuts from education.
Many House members oppose the Senate version because it spends "too much," and that sentiment seems to be supported by Gov. Perry and vocal, fiscally conservative advocacy groups. Many observers believe that the House has the upper hand in this budget skirmish, and that if a bill can be agreed upon before the end of the session, it will be closer to the House’s version than the Senate’s.
It is possible that the comptroller’s office will come forward in the next several days with a revised budget estimate giving lawmakers more money to work with. As the economy improves, sales tax revenues may be higher than originally anticipated. However, at this point whether there will be an increased figure, and how much it might add, are unknown.
FISCAL MATTERS BILLS
Closely related to the budget are a series of “fiscal matters” bills (one is a comprehensive bill, the others are specific to subject areas such as education or health and human services). These bills are necessary to change laws in a way that will balance the budget, primarily through program cuts and bookkeeping changes. One education-related example is the payment deferral that allows the state to delay payments to school districts by a few days in order to push one month’s costs into the next fiscal year (to the tune of $1.8 billion). Another restricts the state subsidy of College Board and International Baccalaureate exams to only financially needy students.
The fiscal matters bills have passed the Senate but have been repeatedly postponed in the House, though they are now expected to be considered next week. Some budget leaders have indicated that they hope to make progress on the budget negotiations before making decisions affecting how much money needs to be raised or cut.
EDUJOBS FUNDING
Also complicating the budget situation is the recent release of $830 million in federal funding. The Senate had included this amount in its budget, but when the money arrived it was immediately distributed directly to school districts, bypassing the state appropriations process and potentially unbalancing part of the Senate’s budget proposal (though there is disagreement about whether the Senate was relying on the federal funds to balance the education budget).
SCHOOL FINANCE
There is also disagreement over whether school finance changes are needed to accommodate the dramatically reduced funding contemplated in both the House and Senate versions of the budget. But many lawmakers believe that school finance is another issue, in addition to the budget, that could force a special session this summer if not resolved by May 30. There are school finance bills in both the House and Senate, but neither has progressed beyond the committee level. The Senate bill, by Sen. Florence Shapiro, has been languishing on the Senate calendar for weeks, but enough Senators object to the bill to prevent consideration, based on concerns that the revised school finance structure would never restore current per-pupil levels of funding (although some districts with lower tax rates could potentially increase local taxes to raise more revenue). The House bill, by Rep. Scott Hochberg, was never scheduled for House floor action, but there is speculation it might be added to one of the fiscal matters bills that should be considered on the House floor soon.
SCHOOL DISTRICT DEREGULATION
We’ve updated our members thoroughly about the progress of HB 400. It is worth noting, though, that the only statutory flexibility districts really need to significantly reduce costs is contained in the House school finance bill. The bill would allow districts to bypass the provision in current law that prohibits them from paying teachers less than they are making this year. It would retain the minimum salary schedule (unlike HB 400) but would allow for salary reductions if districts choose to take this route to avoid or minimize layoffs.
STUDENT AND TEACHER ACCOUNTABILITY
Two major bills tackling different aspects of accountability are moving through the process, but still face obstacles. HB 500 by Chairman Rob Eissler is intended to lighten the burden of the more rigorous STAAR testing system on students. It removes the requirement that end-of-course (EOC) exams must count for 15% of a student’s final grade (leaving the decision up to local school districts), and lowers the number of EOC exams the student must pass to graduate. The bill has passed the House but Senate Education Chair Florence Shapiro does not generally favor easing up on accountability requirements, so the bill is unlikely to pass the Senate in its current form.
SB 4 by Chairwoman Shapiro addresses teacher accountability, more closely tying teacher evaluations to student standardized test scores. TCTA worked extensively with Shapiro in the Senate to try to improve the bill, but we are still opposed to it as it passed that chamber. SB 4 received a less-than-friendly reception at a recent committee hearing in the House Public Education Committee.
TEACHER RETIREMENT SYSTEM
The proposals with the greatest impact on TRS are in the state budget: the House version cuts the state’s pension fund contributions to 6.0% and TRS-Care contributions from 1% to .5%. The Senate version would contribute 6.0% to TRS the first year of the biennium and 6.4% the second year; and 1% to TRS-Care the first year and .5% the second. The more significant effect would be on TRS-Care, potentially requiring increases in retiree health insurance premiums under the lowered contributions.
Clearly, there is much work to be accomplished in the upcoming days, and issues have not begun to coalesce as well as lawmakers would prefer. Delaying budget decisions to this summer could make things difficult for school district administrators and trustees, who will remain in limbo about how to address program and personnel costs until a budget is finalized. And a special session provides an opportunity to revive harmful proposals that might not survive this session, such as increasing class sizes and reducing teacher legal protections.
Gov. Perry can call a 30-day special session at any time after the regular session ends on May 30. There is already speculation that if a special session is needed, it would be scheduled for July.
Note: Numerous other bills affecting public education and TRS are moving, including several initiated by TCTA. We will include more information on these in future publications.
