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2005 Special Session on School Finance

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Updates from Superintendent of Schools Doug Otto

July 21, 2005

House Bill 2 (HB2) has been released by the Texas Legislature for public review at www.tasanet.org. It is requested that you review this information and contact your senators and house members to express your concerns regarding this legislation. You may find Contacts for Texas Government on this site.

Due to the complexity of this legislation and the interrelationship with HB3, it is extremely difficult to determine the impact of this legislation. We understand that HB2 has been separated from HB3 to the extent that, if the legislature passes HB2 and does not pass HB3 (the conference committee has not come to agreement on the tax bill), all of the non-financial requirements in HB2 will take effect without additional funding for public schools. The finance provisions would then be subject to the enactment of HB3, or similar legislation, in a future special or regular session.

The impact of this legislative action would result in a deficit budget for Plano ISD in 2005/2006. The current projected budget for the 2005/2006 school year reflects an $11.6 deficit. Information from Austin indicates that our deficit could be reduced via this legislation, but not eliminated. Operations under any deficit budgeting is unacceptable when debating adequate funding for public education.

“Lawmakers must understand that teacher salaries are always priority in any district budget, but many other operating expenses are never adequately addressed in legislation and we have continued to function with decreasing funds. Maintaining a competitive salary scale for the recruitment and retention of teachers, while also supporting a full academic program with appropriate facilities requires much more attention from the legislature,” said Superintendent Doug Otto.

Please note the following provisions contained in the Conference Committee Report:

  • Voter approval is required for any increase in local enrichment, limited to .15 cents and accessed a rate of .05 cents per biennium; with separate voter approval required each time.
  • A three percent increase in funding is guaranteed in 06-07; no guarantee in 05-06.
  • Requires districts to use at least one percent of the district’s total professional staff payroll to provide incentive payments to employees.
  • Includes a 38% cap on recapture subject to 8% gain limitation. All 41’s may choose an optional homestead exemption without a penalty or recapture at 4% above entitlement.
  • Increases teacher salaries by $2,500 on average. Note: Of this amount, $2,000 on average in 05-06 ($1,500 across the board) and an additional $500 on average in 06-07 represent the total $2,500 increase. These4 amounts appear to include any monies teachers will be able to access for health insurance premiums. Also, these amounts would be used to pay the cost of required locally developed and statewide incentive programs.
  • Provides funding for a longevity incentive of $1,000 to $4,000 annually for each year and educator teaches past the Rule of 80.
  • Requires that districts spend at least 65% of available funds (excluding debt service and federal funds) on instruction in all curriculum subject areas.
  • Moves school board elections to November and requires that all schools operate on a calendar year that begins after Labor Day and ends by June 7.
  • Funds Proclamation 2002, expands Technology Immersion Project and establishes an instructional materials allotment, a portion of which must be used for Target Tech programs beginning in 06-07.

The real question is: How are school districts expected to deal with the normal program costs resulting from inflation and growth and overall staffing requirements, with all of the restrictions imposed in HB2? HB2 fails to provide enough money to cover all of the requirements mandated. School districts must consider the funding beyond the first year and the requirements in HB2 will exceed resources, both local and state.

Please call your Senators and House members today and express your opposition and concerns with HB2! Contacts for Texas Government are located on this "Advocacy for Change" site.

To view the Conference Committee Report on HB2, District Runs, a side by side analysis, and the Fiscal Note, see www.tasanet.org.


July 5, 2005

Since our last communication regarding the Texas Legislature’s special session on school finance, we are continuing to seek clarification regarding the anticipated impact of Texas House of Representatives Education Chair Kent Grusendorf’s amendment to House Bill 2, which passed last week at both the House and Senate levels.

Rep. Grusendorf’s amendment requires that 65% of school districts’ maintenance and operations budgets be restricted to funding "assessed" instructional activities.

“We continue to get mixed messages regarding the amendment’s impact on school districts,” noted Dr. Doug Otto, Plano ISD superintendent of schools and president of the Texas School Coalition, which provides research, information and consultation regarding school finance legislation. “We are still deeply concerned that programs such as extra-curricular and fine arts courses and our educational program as a whole, will be negatively effected by the amendment.

“Everything from enrichment courses to foreign language, fine arts and career education programs may be compromised, if funding is limited to ‘tested’ subjects,” noted Dr. Otto, who insists that these extracurricular courses are not only beneficial but, are vital to students’ educational development.

While in Austin this week, Dr. Otto will seek clarification from our local legislators, as well as those who authored the bill, on whether these educational programs will be compromised by the amendment. He will continue to keep the Plano ISD community apprised of these clarifications via our eNews listserv and this “Advocacy for Change” website.

School Finance Court Case Update

Beginning Wednesday, July 6, oral arguments will be heard before the Texas Supreme Court in a continuation of the West Orange Cove school finance court case. The case culminated in September 2004, when State District Judge John Dietz ruled in favor of plaintiffs, entering an injunction shortly thereafter which gave the state one year to address an inadequate school finance system. Plano ISD was among the 300 school districts serving as plaintiffs in the case.

The Texas Legislature, which culminated its 79th regular session in May, failed to adopt a new state school funding system. Governor Rick Perry called legislators into the special session on school finance in June. House Bill 2 and the amendment proposed by Rep. Grusendorf are now going through conference committee review.

Dr. Otto and the Plano ISD Board of Trustees urge our school district’s patrons to contact Rep. Grusendorf and local state legislators with concerns about this most recently proposed amendment to the education plan. Legislative contact information may be found on this Web site.

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