Moak Casey releases updated side-by-side of HB 1525

The Senate took up HB 1525, which is the primary vehicle for all school finance reforms this session, and adopted more than 20 amendments during their debate. Here’s an overview of some of the more notable changes they made (and didn’t make):

  • Stimulus Spending Limits: Due to new guidance from the federal government (see A-6 on pg. 15), Sen. Taylor informed members that they would not be able to require that districts save 40 percent of their ESSER III entitlement until the 2024-25 school year.  As a result, that provision was removed. In his comments, Sen. Taylor expressed worry that districts may have to make drastic budget cuts once they exhaust these one-time stimulus dollars.
  • Maintenance of Equity/Effort: The bill still contains the provision that provides for an adjustment of FSP funding to ensure compliance with federal maintenance of effort/equity requirements under the stimulus bills. An additional amendment clarified that this adjustment will only come as an increase to districts’ funding. State budget writers expect that schools would receive an additional $396 million of additional funding over the next biennium under this provision.
  • Stimulus Grant Programs: The Senate adopted an amendment that creates several grant programs that are largely paid out of the state’s discretionary funding under ESSER. It would include $1.35 billion for accelerated learning supports, $350 million for technology reimbursements, $200 million for districts with low ESSER allocations, $118 million for career-focused high schools, among other items.
  • Fast Growth Allotment: The Senate adopted two amendments that change the  calculation for this allotment.

    First, for districts eligible for the allotment, the bill establishes a tiered system of weights, with higher weights assigned to districts with faster enrollment growth.

    Secondly, a separate amendment seeks to broaden the eligibility for the allotment to include districts that would have qualified under the growth rate-based eligibility in current law (i.e. with a growth rate in the top 25 percent statewide).

    The allotment itself is still capped at $270 million for the 2021-22 school year, with districts’ allotments being proportionally reduced if the statewide total exceeds the cap (the cap ultimately increases to $320 million by 2024-25). There would almost certainly be more proration under the Senate’s proposal than the House’s.
  • Gifted and Talented Allotment: The Senate adopted an amendment that restores the gifted and talented allotment with a weight of 0.07 (pre-HB 3 weight was 0.12) and a cap of 5 percent of district ADA. The budget currently includes $100 million per year for this allotment. Districts would see a proportional reduction in their allotment if the statewide amount exceeds that appropriation.
  • Formula Transition Grant: The Formula Transition Grant remains capped at $400 million per year under the Senate’s version of the bill. 
  • Outcomes-Based Bonus: The Senate adopted an amendment that incorporates the outcomes-based bonus provisions in SB 2094, which were tied to performance on the STAAR test. A previous fiscal note pegged that cost for the state at around $77 million for the biennium.
  • Resource Campuses: The Senate adopted an amendment that includes HB 220, which allows for low-performing campuses to receive a designation as “resource campuses” and generate funding as if they were charter campuses. When fully implemented, TEA expects this to cost the state $56 million per year.

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