The House has released its base budget bill, which you can read on the Legislative Budget Board website
here. The big news is included in rider 77, which reserves $9 billion over the biennium for school finance reform and property tax relief, which reads as follows:
77. Additional Foundation School Program Funds for Increasing the State Share, Enhancing School District Entitlement, Reducing Recapture, and Providing Tax Relief.
It is the intent of the Eighty-Sixth Legislature to adopt comprehensive school finance legislation and provide local property tax relief. In addition to amounts appropriated above in Strategy A.1.1., FSP - Equalized Operations, and Strategy A.1.2., FSP - Equalized Facilities, $4.5 billion in fiscal year 2020 and $4.5 billion in fiscal year 2021 is appropriated out of the Foundation School Fund No. 193 to be used for the purposes specified in this rider.
The amounts appropriated in this rider are contingent on enactment of legislation supporting school districts and charter schools by increasing the state share of the Foundation School Program, enhancing district entitlement, reducing recapture, and providing local property tax relief, while maintaining an equitable system of school finance. Options may include, but are not limited to, increasing the Basic Allotment and providing additional funding for early childhood education, special education, and teacher compensation.
A portion of the amounts appropriated in this rider shall be used to provide local property tax relief. Funds shall be used to enable the compression of local maintenance and operations (M&O) property tax collections, pursuant to the provisions of the legislation, while ensuring school districts do not receive less total state and local funding through the FSP.
The $9.0 billion in Foundation School Fund No. 193 appropriated in this rider represents new state funding for school districts and charter schools above amounts estimated to fully fund current law. The $43.6 billion in current law appropriations provided above in Rider 3 includes the amount necessary to fully fund $2.4 billion in enrollment growth and $2.2 billion in additional state aid above 2018-19 funding levels associated with the increase under current law in the Guaranteed Yield associated with the Austin Independent School District in accordance with §41.002(a)(2) and §42.302(a-1)(1) of the Texas Education Code.
This rider is on top of enrollment growth and an increase under current law in the resources needed to fund the increase in the golden penny portion of Tier 2, but also is over a base which takes advantage of property value growth and increasing recapture. Under current law, that increase in Tier 2 is anticpated to cost $2.2 billion as the Austin yield is projected to increase from $106.28 this year to $126.88 next year and $135.92 in FY 2021. As you can see in the chart below, the base funding amount for the FSP, net of recapture, without rider 77 reserved funds would be $1.8 billion lower than was appropriated last biennium. Once the $9 billion in reserved funds are added, total FSP funding net of recapture will grow to $7.2 billion above last biennium. This means the House base budget anticipates not only reinvesting growing property values back into the system, but plans on spending $7.2 billion over and above that amount.
|
Current Biennium Appropriations |
House Base Budget |
Biennial Change |
|
FY 2018 |
FY 2019 |
FY 2020 |
FY 2021 |
|
| Foundation School Program |
$21,468,235,602 |
$21,503,735,602 |
$21,754,335,602 |
$21,881,635,602 |
$664,000,000 |
| Recap |
-$2,049,900,000 |
-$2,521,000,000 |
-$3,236,700,000 |
-$3,786,200,000 |
-$2,452,000,000 |
| FSP Total Available |
$19,418,335,602 |
$18,982,735,602 |
$18,517,635,602 |
$18,095,435,602 |
-$1,788,000,000 |
| Rider 77 |
|
|
|
|
$9,000,000,000 |
|
|
|
|
|
$7,212,000,000 |
| |
|
|
|
|
|
Other items included in the House budget are:
$50 million for grants to school districts to provide compensatory special education services;
$54 million for student health and safety, which includes $42,500,000 from the economic stabilization fund, and
$230,756,971 in FY 2020 to TRS Care from the Economic Stabilization Fund to maintain FY 2019 premium levels.
Of course, this budget is just the starting point for the legislative session. Still unknown is how much of the new reserved revenue will be dedicated to property tax relief and how much to new funding for public education, what the distribution mechanism will be for these increases, and how the senate will respond. We will keep you updated as we move through the process.