Bill Caption

Fiscal Notes

State

Estimated Two-year Net Impact to General Revenue Related Funds for HB1759, Committee Report 1st House, Substituted: a negative impact of ($3,008,088,843) through the biennium ending August 31, 2017.

Local Government

The vast majority of school districts and charter schools would experience gains in revenue under the provisions of the bill. In fiscal years 2016 and 2017 gains would be experienced by school districts and charter schools serving 94 percent of students, with remaining districts and charters held revenue-neutral through the provision of stop-loss aid. Beginning in fiscal year 2018, school districts and charter schools serving 98 percent of students would experience gains in revenue relative to current law.

Bill Analysis

HB 1759 would make changes concerning the finance system for public school  systems.  According to the bill's fiscal analysis, the bill would "revise adjustments applied to the basic allotment in the calculation of entitlement by repealing the cost of education index, reducing the level of application of the mid-size district adjustment to 75 percent of the current basic allotment and phasing the adjustment out over time, and specifying the amount of basic allotment to which the small district adjustment is applied to be equal to the current basic allotment plus $125" and would "expand the Career and Technical Education Allotment to include students in Grade 8."

The bill would enable school districts with compressed tax rates that are below $1.00 to increase Foundation School Program Tier 1 participation by converting tax effort equalized under Tier 2 at $31.95 to Tier 1 effort. The districts would be limited to the $1.00 rate. Rate conversion would be optional per district discretion in fiscal years 2016 and 2017 and would be automatic beginning in fiscal year 2018.

HB 1759 would repeal "current provisions that result in a higher equalized wealth level for certain districts based on the district's 1992-93 revenue per student plus the indexed change between the current equalized wealth level and the level established in 1993" and repeal separate funding streams that are outside the system or not fully realized by the school districts.

Vote Recommendation Notes

HB 1759 would make significant changes to K-12 school finance. Some of the changes are positive, such as repealing the cost of education index being used in the calculation of entitlements, since that particular index is extremely outdated and not useful. 

There is no discernible connection to our liberty principles. We would like to note that voting for this bill would affect an ongoing school finance case that has yet to be ruled on by the Texas Supreme Court. Should the bill become law, the case would not be heard by the Texas Supreme Court since HB 1759 would rework the entire system of school finance. This school finance case is significant because it concerns a possible constitutional defense of school choice, depending on the Texas Supreme Court's ruling. While we remain neutral on HB 1759, the relationship to the school finance case should be strongly considered before voting yes on this legislation.