1.28.15
On Tuesday, the Texas Senate’s version of a recommended spending plan for the 2016-2017 biennium was posted on the Legislative Budget Board’s (LBB) web site. The Texas House had released its version of a proposed spending plan about a week earlier. The Senate version provides for a General Revenue Fund increase for the Foundation School Program of $200 million; whereas, the House version provides for level funding in General Revenue Funds, according to an analysis by the LBB. The Senate’s plan also proposes to provide $4 billion in tax relief.
Proposed tax relief provisions by the Senate are:
- $3 billion contingent on passage of bills in the 84th Legislative Session providing school district property tax relief
- $1 billion contingent on passage of bills providing franchise tax reform
The Legislative Budget Board’s summary analysis of the Senate’s spending plan for Texas public schools, dated January 2015, states,
- “$33.6 billion in General Revenue Funds and $42.4 billion in All Funds is provided for state aid to school districts and charter schools through the Foundation School Program (FSP) system. This represents a net General Revenue increase of $2.0 billion, which reflects the addition of $4.0 billion contingent on tax relief provisions (described below), partially offset by a decrease of $2.2 billion in the state cost of funding current law obligations due to property value growth.Additionally, General Revenue funding for the FSP is increased by $200 million over what is estimated to be required to fund the current law FSP entitlement, contingent on legislation that equalizes within the school finance formulas the treatment of similar tax effort across school districts.
- Major FSP cost drivers include the following: (1) projected enrollment growth of 83,000 to 85,000 students in average daily attendance annually (1.7 percent) at an estimated cost of $2.5 billion for the biennium; (2) approximately $4.5 billion in reductions to state obligations resulting from projections of strong growth in property values; and (3) approximately $1.4 billion in increased formula costs, largely offset by recapture payments and other revenue.”
The Legislative Budget Board’s summary analysis of the House’s spending plan for Texas public schools, dated January 2015, states,
- “$31.7 billion in General Revenue Funds and $41.4 billion in All Funds is provided for state aid for school districts and charter schools through the Foundation School Program (FSP) system. This represents level funding in General Revenue Funds and an increase of $1.8 billion, or 4.4 percent, in All Funds compared to the 2014–15 biennium. The All Funds increase is attributable to projected increases in revenues from the Property Tax Relief Fund and from recapture payments, both of which are classified as Other Funds. FSP funding is increased by $2.2 billion over what is estimated to be required to fund the current law FSP entitlement.The additional funding is to be delivered in a manner determined by the Legislature to improve equity, reduce recapture, and increase the state’s share of the school finance system.
- Major FSP cost drivers include the following: (1) projected enrollment growth of 83,000 to 85,000 students in average daily attendance annually (1.7 percent) at an estimated cost of $2.5 billion for the biennium; (2) approximately $4.5 billion in reductions to state obligations resulting from projections of strong growth in property values; and (3) approximately $1.4 billion in increased formula costs, largely offset by recapture payments and revenue from the franchise tax component of the Property Tax Relief Fund.”