LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 84TH LEGISLATIVE REGULAR SESSION April 30, 2015 TO: Honorable Larry Taylor, Chair, Senate Committee on Education FROM: Ursula Parks, Director, Legislative Budget Board IN RE:SB1303 by Menéndez (Relating to the salary paid to classroom teachers employed by public schools.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for SB1303, As Introduced: a negative impact of ($3,013,628,496) through the biennium ending August 31, 2017. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 84TH LEGISLATIVE REGULAR SESSION
April 30, 2015
TO: Honorable Larry Taylor, Chair, Senate Committee on Education FROM: Ursula Parks, Director, Legislative Budget Board IN RE:SB1303 by Menéndez (Relating to the salary paid to classroom teachers employed by public schools.), As Introduced
TO: Honorable Larry Taylor, Chair, Senate Committee on Education
FROM: Ursula Parks, Director, Legislative Budget Board
IN RE: SB1303 by Menéndez (Relating to the salary paid to classroom teachers employed by public schools.), As Introduced
Honorable Larry Taylor, Chair, Senate Committee on Education
Honorable Larry Taylor, Chair, Senate Committee on Education
Ursula Parks, Director, Legislative Budget Board
Ursula Parks, Director, Legislative Budget Board
SB1303 by Menéndez (Relating to the salary paid to classroom teachers employed by public schools.), As Introduced
SB1303 by Menéndez (Relating to the salary paid to classroom teachers employed by public schools.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for SB1303, As Introduced: a negative impact of ($3,013,628,496) through the biennium ending August 31, 2017. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
Estimated Two-year Net Impact to General Revenue Related Funds for SB1303, As Introduced: a negative impact of ($3,013,628,496) through the biennium ending August 31, 2017.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2016 ($1,490,419,632) 2017 ($1,523,208,864) 2018 ($1,556,719,459) 2019 ($1,590,967,287) 2020 ($1,625,850,576)
2016 ($1,490,419,632)
2017 ($1,523,208,864)
2018 ($1,556,719,459)
2019 ($1,590,967,287)
2020 ($1,625,850,576)
All Funds, Five-Year Impact: Fiscal Year Probable Savings/(Cost) fromFoundation School Fund #1931 Probable Savings/(Cost) fromGeneral Revenue Fund #0011 2016 ($1,395,524,000) ($94,895,632) 2017 ($1,426,225,528) ($96,983,336) 2018 ($1,457,602,490) ($99,116,969) 2019 ($1,489,669,744) ($101,297,543) 2020 ($1,522,332,000) ($103,518,576)
Fiscal Year Probable Savings/(Cost) fromFoundation School Fund #1931 Probable Savings/(Cost) fromGeneral Revenue Fund #0011 2016 ($1,395,524,000) ($94,895,632) 2017 ($1,426,225,528) ($96,983,336) 2018 ($1,457,602,490) ($99,116,969) 2019 ($1,489,669,744) ($101,297,543) 2020 ($1,522,332,000) ($103,518,576)
2016 ($1,395,524,000) ($94,895,632)
2017 ($1,426,225,528) ($96,983,336)
2018 ($1,457,602,490) ($99,116,969)
2019 ($1,489,669,744) ($101,297,543)
2020 ($1,522,332,000) ($103,518,576)
Fiscal Analysis
The bill would amend the Education Code related to the salary paid to classroom teachers employed by public schools.The bill would require school districts to pay classroom teachers entitled to the minimum salary schedule (MSS) $400 a month in excess of the amount the teacher would have been eligible to receive using the local district's salary schedule for the 2014-15 school year if that salary schedule had been in effect for the 2015-16 school year.The bill would create an entitlement for all school districts and open enrollment charter schools of $4,000 for each classroom teacher employed by the Local Education Agency (LEA). The bill would apply beginning with the 2015-16 school year and would take effect September 1, 2015.
Methodology
This estimate uses data from the 2015 Public Information Management Information System (PEIMS) to estimate the number of full time teachers in Texas who would be eligible for the $4,000 allotment paid to districts at 341,376. The average annual growth rate for classroom teachers between FY 2013 and FY 2015 was 2.2%. This estimate continues this growth through 2020. Based on these numbers, the Texas Education Agency (TEA) estimates that there would be 348,881 full-time teachers in Texas in FY 2016, increasing to 380,583 by 2020. The entitlement for all school districts and open enrollment charter schools of $4,000 for each classroom teacher would result in an estimated cost of $1.4 billion in fiscal year 2016, and would increase to $1.5 billion in fiscal year 2020.A $4,000 increase per teacher would result in an annual state contribution to the TRS of $272 per teacher. While some teachers will change districts and not be guaranteed a minimum of their 2015-2016 salary, this analysis assumes districts would increase local schedules for all teachers. This would result in costs of $94.9 million in fiscal year 2016, increasing to $103.5 million in fiscal year 2020.According to the Teacher Retirement System (TRS) actuary, while the bill would increase revenue into the TRS Pension Trust Fund due to increased contributions on higher salary amounts, the revenue increase does not automatically result in an actuarial gain to the fund. A long-term actuarial impact would depend on how salary increases over multiple biennia compare to the plan's funding assumptions for salary growth. In addition, potential gains to the fund could be impacted by potential costs due to increased final average salaries that result in greater pension benefit obligations.
Technology
Minimal updates would be made to the online FSP system. Based on the analysis of the Texas Education Agency, these updates could be accomplished by utilizing existing resources.
Local Government Impact
The bill would require a school district that does not participate in Social Security to make a contribution to TRS of 1.5% of the additional salary amount, or $60 per teacher annually. Approximately 97% of districts do not participate in Social Security.
Source Agencies: 323 Teacher Retirement System, 701 Central Education Agency
323 Teacher Retirement System, 701 Central Education Agency
LBB Staff: UP, JBi, SL, AM
UP, JBi, SL, AM