The conference committee report for HB 3 has been released. The bill is lengthy and will require additional study, but we are providing you with preliminary details on the teacher salary provisions. HB 3 also includes property tax reductions and increases in programs and allotments, and we will address those provisions in future publications. The conference committee report is expected to be voted on by the House and Senate this weekend. [UPDATE: the bill was approved by the House and Senate Saturday night. It now heads to the governor's desk. The vote in the House was 139-0; in the Senate, it passed 30-0.]

An agreement on HB 3, the school finance reform bill, was reached this week. An analysis of the bill, which was distributed Friday night, concludes that around $2 billion in new funding will be directed to employee compensation, but the compensation provisions of the bill are anything but straightforward, and a pay increase is not assured for any individual employee. The bill requires that a portion of new money that a district receives be spent on compensation increases, but decisions about teacher pay will ultimately be up to local school districts.

State leaders may have been persuaded to maximize local discretion by the many superintendents and school board members who came to Austin to testify for local authority over how to spend funds, and in opposition to a pass-through pay raise.

HB 3 requires that 30 percent of any increase in the basic allotment be used to increase compensation for non-administrative employees. The basic allotment is increasing from $5,140 per student to $6,160, so many districts should receive significant new funding. You can see how much your district should receive under the plan by checking the school finance "runs" — the official estimate of how much new funding each district and charter school will receive. Districts are ordered alphabetically by House member (e.g., districts represented by Rep. Alma Allen are listed first). Look at the column titled "Change in total M&O revenue" to see how much total additional funding your district is projected to receive for that year.

Click here for the FY 2020 runs.

Click here for the FY 2021 runs.

Of that 30 percent, 75 percent must be used to increase compensation for classroom teachers, full-time librarians, full-time counselors and full-time school nurses, “prioritizing differentiated compensation for classroom teachers with more than five years of experience.” It is unclear how districts should interpret and implement that provision, but it is apparent that how this funding is distributed would be entirely left up to the district. The remaining 25 percent may be used as determined by the district to increase compensation paid to any full-time non-administrative employee. The bill specifies that “compensation” can include assistance with health insurance premiums.

Some teachers, counselors, nurses and librarians in districts paying at or close to the state minimum would be able to count on a salary increase due to an increase in the state minimum salary schedule of approximately 20 percent. The schedule increases automatically as a result of the increased basic allotment, with each step increasing from around $5,000 to more than $9,000. The provision in law that ties the minimum schedule to state funding was a TCTA legislative achievement many sessions ago and has ensured ongoing increases in the state base. (Note that a district of innovation could choose to exempt itself from the state minimum salary schedule, but we are not aware of any DOI that has done so.) The increase in the schedule should also create an incentive for other districts to raise pay in order to stay competitive in attracting teachers.

Merit pay

HB 3 includes a new $140 million optional merit pay program under which districts could designate certified teachers as a master, exemplary or recognized teacher for a five-year period based on the results of single year or multi-year appraisals. The commissioner of education would establish performance and validity standards for each local designation system. The standards could not require a district to use statewide standardized accountability tests to evaluate teacher performance for this purpose, but the bill does not prohibit a district from using such tests as part of the merit pay model.

The commissioner will enter into an agreement with Texas Tech University to monitor the quality and fairness of the local designation systems. Participating districts will receive a base amount of $12,000 for master teachers, $6,000 for exemplary teachers, and $3,000 for recognized teachers, but those amounts would be increased by factors in certain areas, such as rural districts and high needs campuses. The bill does not require (or prohibit) that funding go to the teachers earning such designations; rather, it provides that 90 percent of the allotment must be spent on compensation for teachers working at the designated teacher’s campus.

Whether this latest version of merit pay will work better than the failed career ladder system adopted in 1984 or the subsequent DATE program remains to be seen.

Other pay

The bill provides funding for mentor teacher programs, including an opportunity for mentor teachers to receive additional compensation, which has been a priority for TCTA. The bill also funds an additional 30 half-days of school in the summer, so teachers in districts taking advantage of that option could receive extra pay for that time.

HB 3 does not include provisions requiring that all employees receive a share of the raise, so teachers will have to wait until their school districts adopt the budget before learning if they will receive a pay raise or other increase in compensation. We strongly encourage our members to work with your local school boards and superintendents on how the increased funding will be used to augment employee compensation.