LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 85TH LEGISLATIVE REGULAR SESSION April 21, 2017 TO: Honorable Dan Huberty, Chair, House Committee on Public Education FROM: Ursula Parks, Director, Legislative Budget Board IN RE:SB22 by Taylor, Larry (Relating to the establishment of a Pathways in Technology Early College High School (P-TECH) program and to the repeal of the tech-prep program.), As Engrossed Estimated Two-year Net Impact to General Revenue Related Funds for SB22, As Engrossed: a negative impact of ($4,965,806) through the biennium ending August 31, 2019. 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, 85TH LEGISLATIVE REGULAR SESSION
April 21, 2017
TO: Honorable Dan Huberty, Chair, House Committee on Public Education FROM: Ursula Parks, Director, Legislative Budget Board IN RE:SB22 by Taylor, Larry (Relating to the establishment of a Pathways in Technology Early College High School (P-TECH) program and to the repeal of the tech-prep program.), As Engrossed
TO: Honorable Dan Huberty, Chair, House Committee on Public Education
FROM: Ursula Parks, Director, Legislative Budget Board
IN RE: SB22 by Taylor, Larry (Relating to the establishment of a Pathways in Technology Early College High School (P-TECH) program and to the repeal of the tech-prep program.), As Engrossed
Honorable Dan Huberty, Chair, House Committee on Public Education
Honorable Dan Huberty, Chair, House Committee on Public Education
Ursula Parks, Director, Legislative Budget Board
Ursula Parks, Director, Legislative Budget Board
SB22 by Taylor, Larry (Relating to the establishment of a Pathways in Technology Early College High School (P-TECH) program and to the repeal of the tech-prep program.), As Engrossed
SB22 by Taylor, Larry (Relating to the establishment of a Pathways in Technology Early College High School (P-TECH) program and to the repeal of the tech-prep program.), As Engrossed
Estimated Two-year Net Impact to General Revenue Related Funds for SB22, As Engrossed: a negative impact of ($4,965,806) through the biennium ending August 31, 2019. 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 SB22, As Engrossed: a negative impact of ($4,965,806) through the biennium ending August 31, 2019.
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 2018 ($2,482,903) 2019 ($2,482,903) 2020 ($6,157,903) 2021 ($6,157,903) 2022 ($6,175,000)
2018 ($2,482,903)
2019 ($2,482,903)
2020 ($6,157,903)
2021 ($6,157,903)
2022 ($6,175,000)
All Funds, Five-Year Impact: Fiscal Year Probable (Cost) fromGeneral Revenue Fund1 Probable Savings fromGeneral Revenue Fund1 Change in Number of State Employees from FY 2017 2018 ($2,500,000) $17,097 1.0 2019 ($2,500,000) $17,097 1.0 2020 ($6,175,000) $17,097 1.0 2021 ($6,175,000) $17,097 1.0 2022 ($6,175,000) 1.0
Fiscal Year Probable (Cost) fromGeneral Revenue Fund1 Probable Savings fromGeneral Revenue Fund1 Change in Number of State Employees from FY 2017 2018 ($2,500,000) $17,097 1.0 2019 ($2,500,000) $17,097 1.0 2020 ($6,175,000) $17,097 1.0 2021 ($6,175,000) $17,097 1.0 2022 ($6,175,000) 1.0
2018 ($2,500,000) $17,097 1.0
2019 ($2,500,000) $17,097 1.0
2020 ($6,175,000) $17,097 1.0
2021 ($6,175,000) $17,097 1.0
2022 ($6,175,000) 1.0
Fiscal Analysis
The bill would amend the Education Code as it relates to Educational Programs to establish the"Pathways in Technology Early College High School" program (P-TECH). Under the provisions of the bill, the Commissioner of the Texas Education Agency (TEA) would be required to establish and administer the program for school districts and open-enrollment charter schools. Within six years, students in the program would be permitted to earn their high school diploma and an associate degree, two-year postsecondary certificate, or industry certification as well as participate in work-based training. The program would be required to be provided at no cost to participating students.P-TECH programs would be required to have articulation agreements and memoranda ofunderstanding between schools and institutions of higher education and regional industry partnersor businesses. The Commissioner of TEA would be required to collaborate with the TexasWorkforce Commission and the Texas Higher Education Coordinating Board to develop andimplement a plan for P-TECH that addresses regional workforce needs; credit transfer policiesbetween institutions of higher education; and internships, apprenticeships, and other work-basedprograms.While enrolled in the P-TECH program, students would be entitled to the benefits of theFoundation School Program in proportion to the amount of time the student spent on high schoolcourses.The bill also would require the Commissioner of TEA to establish a grant program to help supportschool districts and open-enrollment charter schools in implementing the P-TECH program usingfunds appropriated for that purpose. For the 2018-19 biennium, the bill would limit the total grantaward amount to $5 million; this limitation would expire on December 1, 2019. The Commissionerwould not be permitted to use more than 3 percent of funds appropriated for the grant program foradministrative costs and for providing technical assistance and support. The Commissioner alsowould be required to create criteria for designation as a P-TECH school. Designation would berequired for participation in the grant program.The bill would eliminate the tech prep program.The bill would take effect September 1, 2017, but the provisions of the bill would not apply untilthe 2018-19 academic year.
Methodology
Under the provisions of the bill, TEA would be required to establish and administer the P-TECHprogram and establish criteria and procedures for designating school districts and open-enrollment charter schools as P-TECH schools.The bill specifies that the total amount of grants awarded under the P-TECH grant program maynot exceed $5 million for the 2018-19 biennium. This limitation on total grant amounts wouldexpire December 1, 2019. This estimate assumes that the first P-TECH grants would be awarded infiscal year 2018 in advance of school year 2018-19, and that total grant funding for thebiennium would be the maximum $5 million. This estimate also assumes that the $5 million ingrants would be exhausted by the end of the biennium.TEA estimates that it would award two-year grants ranging from $500,000 to $800,000, with thefirst year of grants ranging in value from $200,000 to $400,000. The analysis estimates $2.5million spent in each fiscal year of the biennium, however this amount would depend upon thenumber and value of grants in each fiscal year of the biennium. According to TEA, the first year ofthe grant would be for planning, acquisition of equipment, technology, staff, and curriculum acquisition. The second year of the grant would be for program launch, including helping defraythe costs of the technology, staff salaries, technical assistance, and professionaldevelopment. This analysis assumes a $325,000 average grant value per each fiscal year of thebiennium, or an average total grant value of $650,000 for the biennium.This analysis assumes that one full-time equivalent position (FTE) would be required toadminister and implement the P-TECH program. TEA would be limited by the bill to allocatingonly 3 percent of the total appropriation for the grant program to administrative costs, as well ascosts related to technical assistance and support. Assuming $5 million in grant funding for the2018-19 biennium, the estimated administrative costs associated with the necessary FTE,technical assistance, and support would be limited to $150,000.The $5 million limitation on total grant award value would expire on December 1, 2019. Followingthe 2018-19 biennium, the bill does not specify a limitation on total grant awards. Beginning infiscal year 2020, this analysis assumes costs based on anticipated program participation. However,actual costs will be limited to amounts appropriated for that purpose.Beginning in fiscal year 2020, it is estimated that interest in the P-TECH grant program will besimilar to interest in the Innovation Academies. TEA awarded 19 Innovation Academy grantsduring fiscal year 2017. The estimated biennial impact of the P-TECH program beginning in fiscalyear 2020 therefore assumes 19 two-year grants valued at an average of $650,000 for thebiennium, resulting in a total biennial cost in grant awards of $12.4 million in grant funding. It isassumed that TEA would award 19 new grants in the first year of each subsequent biennium. Thebill would continue to limit use of appropriations for the grant program to 3 percent foradministrative costs, as well as costs related to technical assistance and support.The bill also would eliminate the tech prep program. According to TEA, this will result in asavings to the state in the Foundation School Program fund of $17,097 per year. To the extent thatthe bill could potentially take six years to complete, and could encourage high school studentsto take additional Career and Technical Education high school courses and higher educationcourses, there could be increased formula funding costs beginning in fiscal year 2020, howeverthe impact of this cannot be determined. Because of the potential cost impact to the FoundationSchool Program, TEA estimates that savings to the Foundation School Program fund would ceasein fiscal year 2020.
Technology
TEA indicates some additional costs for developing data system elements associated with the program.
Local Government Impact
The bill would permit school districts and open-enrollment charter schools to obtain accident medical expense, liability, or automobile insurance coverage. However, according to TEA, costs would vary depending on the coverage and number of students participating. The agency also estimates that the bill would have a cost to school districts or open-enrollment charter schools for start-up, student travel to work-based learning opportunities, and designation as a P-TECH school. However, cost would vary depending on the type of program offered by the school and whether or not the school receives a grant.
Source Agencies: 320 Texas Workforce Commission, 701 Texas Education Agency, 781 Higher Education Coordinating Board
320 Texas Workforce Commission, 701 Texas Education Agency, 781 Higher Education Coordinating Board
LBB Staff: UP, THo, JJ, AKU
UP, THo, JJ, AKU