Speaker Gibson D. (Gib) Lewis, Chair Lt. Governor Bob Bullock, Vice Chair

Representative Jim D. Rudd Senator John T. Montford
Representative Ernestine Glossbrenner Senator Cari A. Parker
Representative Kent Grusendort Senator Gonzalo Barrientos
Representative Wilhelmina Delco 5 Senator Judith Zaffirini

Legislative Education Board

MEMORANDUM

TO: ALL LEB MEMBERS’ STAFF
FROM: KELLY YOUNGS
DATE: SEPTEMBER 21, 1992

SUBJECT: PUBLIC HEARING ON COST STUDIES

As you know, the Legislative Education Board is statutorily responsible for conducting a series
of studies relating to the way in which we fund public education in Texas. These studies include
examining the basic allotment, special programs and other categorical funding elements. With
the last pieces of the study coming together, the statute calls for a public hearing to be conducted
prior to delivery of the final results. Therefore, a hearing has been scheduled for Thursday,

October 1, 1992 at 9:00 a.m. to noon. The hearing will take place in Senate Meeting Room One
of the One Capitol Square Building.

In addition, I would like to give staff the opportunity for a briefing in advance of the public
hearing. The staff briefing has been rescheduled from Monday, September 21st, 2:00 p.m. to
Wednesday, September 23rd, from 2:00 p.m. to 3:30 p.m. in conference room 202 (next to

Sen. Haley’s office) of the One Capitol Square building. A summary of the preliminary
school finance findings are attached.

Please let me know if there is anything I can help you with on this or any other matter regarding
public education.

Thank you.

300 W. 15th, One Capitol Square, Suite 413, Austin, Texas 78711 * (512) 463-1146 © FAX: (512) 463-0326
DRAFT

REGULAR PROGRAM AND BASIC ALLOTMENT STUDY
SUMMARY OF FINDINGS

Under current law (SB 351) the basic allotment was set at $2,200 per regular ADA for the 1991-92
school year, and at $2,400 per ADA for the 1992-93 school year. This study examined the cost of
providing a regular education program under the current system.

in order to determine the cost of providing an educational program which enables students to
achieve at acceptable levels, the current study examines the costs of educating a student in the

regular program in relation to student performance on the Texas Assessment of Academic Skills
(TAAS).

Costs were defined as the most currently available actual expenditure data, obtained from the Texas
Education Agency’s Bulletin 679 accounting system as submitted through the Public Education
Information Management System (PEIMS) for the 1990-91 school year.

Districts with fewer than 2,000 students in average daily attendance were eliminated from the
analysis. Previous research has documented diseconomies of scale in operational costs for these

districts associated with their small size. Exclusion of these very small districts is an attempt to
control for diseconomies of scale.

Research has also shown that family background or socioeconomic status (SES) is a very strong
predictor of student achievement. Using Texas Education Agency data which reports the number
of students eligible for free or reduced price lunches as a proxy for low income, LEB staff attempted
to control for the effect of SES on achievement by excluding all districts exceeding 60% low income
from the regular program cost analysis. Districts with fewer than 20% low income students were
also excluded due to atypical racial, demographic and wealth characteristics.

The LEB staff calculated an expenditure level of $2,986 (not including co-curricular and
extracurricular costs) for the regular program in a district with a representative demographic mix,
and moderate achievement on the TAAS test (at least 50% of students in the districts passing) in
the 1990-91 school year. The LEB study regular program cost was calculated by analyzing the costs
of providing a basic "regular program" for "regular" students in districts that perform well compared
to other districts with similar socioeconomic characteristics. Neither theoretical modeling nor
detailed cost case studies that might not be widely applicable were used in this part of the study.

This number is compared to several other benchmark numbers including previous Accountable Cost
studies, the Quality ISD number presented in 1989, the 97th percentile of revenue per ADA for the
1992-93 school year, and the Senate Bill 351 Revenue Limit. Another number used in the analysis,

for purposes of comparison, is the 97th percentile of regular program cost. For the 1990-91 school
year, this amounted to $3,356 per ADA.

The study also examined high cost courses. With respect to teacher costs the study found class size,
rather than average years of experience to be the primary reason for higher than average teacher

costs. Courses with needs for special set-ups or equipment had higher than average non-teaching
instructional costs.
EFFECTIVE PRACTICES AND EFFECTIVE SCHOOLS RESEARCH
SUMMARY OF FINDINGS

Research has found very little connection between current school spending and educational
outcomes. This does not mean, however, that money has no impact on achievement. Rather, it
means continuing to spend money on the same programs and activities that have proven ineffective
in the past will have no impact on achievement.

The effective schools movement is helping to identify new ways to structure educational spending
SO aS to maximize its impact on student learning. Educational decision-making is being
decentralized from the state to the local level. Districts will be held accountable for obtaining state-
level objectives through a system of performance indicators.

Effective schools research has begun to identify some educational approaches which districts can
use to achieve learning success for students. These include administrative restructuring, changing
the learning environment, strengthening staff development, involving parents in their children’s
education, and re-examining the issues of class size in the restructured classroom setting.

Our ability to estimate the cost of effective practices is severely constrained by the state of existing
knowledge. First, there is no clear consensus on the precise definition of an effective school.
Further, if a working definition can be agreed upon, the minimum inputs required to meet that
Standard must be identified. Unfortunately, this information does not presently exist. In fact, the
greatest single barrier to estimating the cost of effective schools is the limited understanding of what
programs and activities will result in high student achievement. In order to begin establishing a
basis for cost calculation, states should continue to collect high-quality data on various educational
approaches in order to establish more firmly the exact behaviors that are "worth paying for".
SPECIAL EDUCATION PROGRAM COST STUDY
SUMMARY OF PRELIMINARY FINDINGS
9/18/92

Background

The purpose of this study is to develop recommendations, expressed both as dollar amounts and as weights
applied to the adjusted basic allotment, that support the added expense of educating students with
disabilities. In determining the cost of providing special education services, the study examined current
practices and also created a hypothetical model program based on the principle of inclusion of special
education students in the regular classroom. The costs of both current practices and the inclusion model
were developed by MGT of America under contract with the Texas Education Agency.

Current Practices

Cost data for 1990-91 was collected during on-site visits to a sample of 15 school districts of various sizes
and demographic characteristics. Exhibit 1-1 from the MGT study shows the dollars spent compared to
the dollars allocated by Tier 1 for each of the 15 instructional arrangements that were in statute in 1990-
91. (Self-contained pregnancy is no longer a special education instructional arrangement.) Those costs
are then analyzed using 4 different student counts:

Ls Students reported is a number that was calculated by MGT using FTE’s reported to TEA as the
basis for the calculation.

Z Students served is a head-count number that was reported to MGT during the site-visits.

3. FTE’s reported is not a head-count. It represents the number of full-time equivalent students in

each instructional arrangement. This number comes from the Summary of Finances document
submitted to TEA for funding purposes.

4. FTE’s served is a number that was calculated by MGT using the number of students served as the
basis. :

The reason for providing student counts based on FTE’s as well as head-count is that the current system
is based on FTE, but some of the options for funding include options that would fund on the basis of
head-count. The reason for providing counts based on numbers reported to TEA as well as to MGT is
that there was a large discrepancy between the numbers reported to TEA for funding purposes and the
numbers reported to MGT during the site visits.

Model Program

For purposes of this study, inclusion was defined as an instructional arrangement whereby students with
disabilities are served entirely in the regular classroom. Students with disabilities receive support within
the general education program from special education staff.

Using this definition, inclusion models were developed to accommodate a range of intensity of student
needs. Six classifications of intensity were used to estimate resource requirements and costs. To arrive
at the total cost of inclusion, the cost estimate derived in the Inclusion Cost Model, which represents the
cost of special education, was added to the average regular program expenditure per student.
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Options for Consideration

The following options are currently being considered by staff as the basis for making recommendations
for special education funding levels. For the purposes of this briefing, Options 1A, 1C, 2A, and 2C are
on hold pending verification of data by MGT.

OPTION 1 Adjust all of the current weights according to the costs found by MGT.

Option 1A Cost per FTE calculated based on students served as reported to MGT
Option 1B Cost per FTE reported to TEA on Summary of Finances
Option 1C Cost per Student served as reported to MGT

Option 1D Cost per student calculated based on FTE’s reported to TEA

OPTION 2 Adjust all of the current weights according to costs found by MGT. Develop a single
average weight for resource room, self-contained arrangements, and mainstream.

Option 2A Cost per FTE served calculated by MGT based on students served
Option 2B Cost per FTE reported
Option 2C Cost per student served as reported to MGT

Option 2D Cost per student calculated based on FTE’s reported to TEA

OPTION 3 Adjust all of the current weights according to costs developed by MGT using a model
program described in MGT report.
PROGRAM FUNDING LEVEL EXPRESSED AS DOLLAR AMOUNTS AND AS WEIGHTS
APPLIED TO THE ADJUSTED BASIC ALLOTMENT FOR 1990-91

Cost of Existing Services/Current Instructional Arrangements

OPTION 1B
Current Dollar Adjusted Dollar
Instructional Arrangements Weight Amount Weight Amount
Homebound 5.0 $10,685 24.1 $51,479
Hospital Class 5.0 $10,685 11.6 $24,741
Speech Therapy 7.1 $15,194 7.0 $14,854
Resource Room 27 $5,770 3.1 $6,579
S/C - M&M 2.3 $4,915 4.2 $8,888
S/C - Severe 3:5 $7,480 4.0 $8,551
S/C - Separate 2.1 $5,770 4.3 $9,132
Multidistrict Campus 3:5 $7,480 32.9 $70,327
Vocational Adjustment 2.3 $4,915 1.0 $2,100
Community Class 3.5 $7,480 27.6 $59,021
State Schools 5.0 $10,685 3.9 $8,286
Non-public Day School 3.5 $7,480 2.3 $5,016
Residential Care 5.0 $10,685 5.5 $11,785
Average Weight 3.19 $6,823 4.0 $8,583
Mainstream 0.25 $534 P| $1,577
Average Weight 2.84 $6,089 3.8 $8,091

This option would adjust all of the current weights according to the costs found by MGT per FTE reported.

PROGRAM FUNDING LEVEL EXPRESSED AS DOLLAR AMOUNTS AND AS WEIGHTS
APPLIED TO THE ADJUSTED BASIC ALLOTMENT FOR 1990-91

Cost of Existing Services/Current Instructional Arrangements

OPTION 1D
Current Dollar Adjusted Dollar

Instructional Arrangements Weight Amount* Weight Amount*
Homebound 1.67 $3,562 4.01 $8,573
Hospital Class 4.0 $8,548 8.31 $17,765
Speech Therapy 1.25 $2,681 1.59 $3,401
Resource Room 1.57 $3,348 1.93 $4,129
S/C - M&M 1.70 $3,642 2.97 $6,337
S/C - Severe 3.29 $7,034 3.62 $7,737
S/C - Separate 2.56 $5,467 1.97 $4,215
Multidistrict Campus 2.88 $6,144 9.43 $20,161
Vocational Adjustment 2.19 $4,684 081 $1,738
Community Class 2.88 $6,144 13.92 $29,754
State Schools 4.67 $9,973 3.46 $7,387
Non-public Day School 3.29 $7,034 2.23 $4,765
Residential Care 4.67 $9,973 4.78 $10,209
Average Weight 1.83 $3,907 2.30 $4,919
Mainstream 125 $2,671 1.82 $3,893
Average Weight 1.80 $3,844 2.28 $4,866

This option would adjust all of the current weights according to the costs found by MGT per student
calculated.

These amounts represent the dollars per special education student in ADA. It would fund the student’s entire day,
not just time spent in special education.
PROGRAM FUNDING LEVEL EXPRESSED AS DOLLAR AMOUNTS AND AS WEIGHTS
APPLIED TO THE ADJUSTED BASIC ALLOTMENT FOR 1990-91

Cost of Existing Services/Current Instructional Arrangements
With One Combined Arrangement

OPTION 2B
Adjusted
Current Dollar Weight for Dollar
Instructional Arrangements Weight Amount 1990-91 Amount
Homebound 5.0 $10,685 24.1 $51,479
Hospital Class 5.0 $10,685 11.6 $24,741
Speech Therapy 7.1 $15,194 7.0 $14,854
Resource Room 27 $5,770 3.1 $6,579
S/C - M&M 23 $4,915 4.2 $8,888
S/C - Severe 35 $7,480 4.0 $8,551
S/C - Separate 2.7 $5,770 4.3 $9,132
Mainstream 0.25 $534 0.7 $1,577
Combined Arrangement 25 $5,277 3.4 $7,297
Multidistrict Campus 3.5 $7,480 32.9 $70,327
Vocational Adjustment 2.3 $4,915 1.0 $2,100
Community Class 3.5 $7,480 27.6 $59,021
State Schools 5.0 $10,685 3.9 $8,286
Non-public Day School 35 $7,480 2.3 $5,016
Residential Care 5.0 $10,685 5:5 $11,785
Average Weight
(Without Mainstream) 33 $7,004 4.0 $8,583
Average Weight
(With Mainstream) 3.53 $7,538 3.8 $8,091

This option would adjust all of the current weights according to the costs found by MGT per FTE reported.
However, resource room, self-contained arrangement, and mainstream would be given a single weight repre-
senting the average costs of these arrangements.

Cost of Existing Services/Curren

t Instructional Arrangements
With One Combin

ed Arrangement

Current
Weight

Peech Therapy

Resource Room

Hospital Class

Vocational Ad justment

Community Class

N

on-public Day School

Residential Care

Average Weight
(Without Mainstream)

Average Weight
(With Mainstream)
PROGRAM FUNDING LEVEL EXPRESSED AS DOLLAR AMOUNTS AND AS WEIGHTS

APPLIED TO THE ADJUSTED BASIC ALLOTMENT FOR 1990-91

Cost of Model Program

OPTION 3
Current Dollar Adjusted Dollar

Instructional Arrangements Weight Amount Weight Amount
Homebound 1.67 $3,562 N/A N/A
Hospital Class 4.0 $8,548 N/A N/A
Resource Room 1.57 $3,348 N/A N/A
S/C - M&M 1.70 $3,642 N/A N/A
S/C - Severe 3.29 $7,034 N/A N/A
S/C - Separate 2.56 $5,467 N/A N/A
Mainstream 1.25 $2,671 N/A N/A
Multidistrict Campus 2.88 6,144 N/A N/A
Vocational Adjustment 2.19 $4,684 N/A N/A
Community Class 2.88 $6,144 N/A N/A
State Schools 4.67 $9,973 N/A N/A

Non-public Day School
Residential Care 4.67 $9,973 N/A N/A

Average Weight
(Without Speech Therapy) 1.98 $4,252

Model Program Arrangement 3.09 $6,599
Speech Therapy 1.25 $2,671 1.25 $2,671

COMPENSATORY EDUCATION PROGRAM COST STUDY
SUMMARY OF PRELIMINARY FINDINGS

The purpose of this study is to analyze the cost of compensatory education programs within the
Foundation School Program (FSP). These include programs and services provided to students in need of
remediation and/or at risk of dropping out of school.

State funding for compensatory education began in 1976 with an allotment of $40 per pupil based on the
number of students identified for federal compensatory education funding. The pupil base was converted
to enrollment in the free and reduced price lunch program in 1980, and the allotment was converted to
an add-on weight to the basic allotment in 1985. A separate weight of 2.41 for each full-time equivalent
student in teen pregnancy programs was established in 1992 (previously funded through the special
education allotment). The tier 1 FSP cost for the 0.2 add-on weight for compensatory education was
approximately $429 in 1991.

The current cost analysis is based on field research conducted by the Texas Center for Educational
Research (TCER) for 72 programs on 50 campuses in 22 school districts. The 22 districts represent a
range in size, wealth, and geographic location. The study focuses on only those costs that are directly
attributable to compensatory education programs and services.

TCER staff used the Resource Input Methodology (RIM) to classify identified programs and services into
nine categories: alternative schools, classroom programs, programs for small groups, one-to-one programs,
summer school programs, whole school programs, counseling services, family involvement programs, and
teen pregnancy and parenting programs. For each program, TCER staff looked at the 1992 cost of
services at existing participation levels and at maximum capacity. Using the same categories, TCER built
model programs based on components of programs viewed during site visits and other recommended
Strategies (e.g., parent liaisons, staff development, etc.), and then produced a per pupil cost for each of
the model programs.

Attachment A provides a summary of per pupil costs for current services at actual participation levels,
current services at maximum capacity, and models based on effective practices. In addition to the nine
RIM categories analyzed by TCER, we have provided median costs for the following aggregations of
categories: (a) all categories combined, (b) all categories except teen pregnancy programs (to reflect
current law formulas), and (c) all categories except teen pregnancy programs and alternative schools (the
latter excluded because it represents a substitute for rather than an add-on to the regular education
program).

Three steps must be taken to convert the TCER cost data to FSP funding amounts:

(a) Convert costs from 1992 values to 1991 values. FY 91 is the base year for other components
of the school finance studies. The TCER costs are deflated by the CPI (3.03%) to estimate 1991
costs.

(b) Convert costs from per pupil enrolled to per ADA amounts. Costs are divided by the 1991
ADA to enrollment ratio (91.03%) to estimate per ADA costs.

(c) Remove a factor for federal funding support. An average amount of Chapter 1 federal funding

per compensatory education ADA ($261 for all programs) is used to estimate a per ADA cost net
of federal funds.
TCER also analyzed a number of compensatory education funding mechanisms used or under
consideration for use in the 50 states. These include categorical grants, discretionary grants, excess cost
reimbursement, teacher/class unit allocations, equalized weighted pupil allocations, and index of need.
TCER analyzed each of these mechanisms against a set of measures chosen to reflect goals and preferred
outcomes of a school finance system.

The staff report will likely address the following issues:

) analysis of per pupil costs and recommendation of one or more weights for the compensatory
education allotment;
) analysis of existing and alternative funding mechanisms for compensatory education and

recommendations for change where warranted; and
fe) discussion and recommendation on related data needs.
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VOCATIONAL EDUCATION
SUMMARY OF FINDINGS

In the 1990-1991 school year, Texas districts reported spending approximately $363 million in
federal, state and local funds on vocational education in the public schools. Of this amount, about
$15 million were spent on debt service and capital outlay leaving approximately $347 dollars in
operating expenditures. Approximately $20 million of the $347 million in operating expenditures
are federal; the remaining $327 million are General Fund dollars.

§16.155 of the Texas Education Code outlines the vocational education allocation system for state
dollars, based upon a weight of 1.37 multiplied by a district’s adjusted basic allotment for every
full-time equivalent student in the vocational education program. The funds are distributed on the
basis of the number of contact hours generated by eligible students enrolled in state approved
vocational education courses. The total state vocational education Foundation School Program
entitlement in 1991 was $284.6 million, about 87% of the General Fund operating expenditures for
vocational education in all districts. Since all districts receive a total weight of 1.37 for each full
time equivalent vocational student, the calculated "add-on" weight of .37 generates $76.8 million
of the total $284 million total FSP vocational entitlement.

For purposes of state funding, vocational students are counted on a full time equivalency basis. For
purposes of reporting courses and subjects taught, students are reported on a duplicated headcount
(enroliment) basis. In the 1991 -1992 school year, local districts reported 96,887 vocational
education Full Time Equivalents. The Texas Education Agency Vocational Education Funding and
Compliance department reported 618,492 students enrolled in nine Vocational Education subject
areas. No cross linking between these two reporting systems now exists. Plans for the Texas
Education Agency database (PEIMS) to start tracking all data at the student level should facilitate
future research efforts to analyze vocational costs by full time equivalents.

The data for this report were collected by the Texas Education Agency. The only specialized data
collection effort relating to vocational education in this series of cost studies was that performed by
the Texas Center for Educational Research (TCER) in its study of high cost courses. For that study,

with a very limited sample size, facility, equipment, and supplies and materials costs were analyzed
within eight vocational subject areas.

Currently available data and research are not sufficient to validate or invalidate the current
vocational funding weight. Lacking enough information to clearly justify altering the vocational
funding weight does not preclude possible future recommendations that existing resources be more
clearly directed towards priority occupations. How this focusing of effort might possibly affect
recommendations of state approved vocational courses is yet to be determined.
BILINGUAL EDUCATION
SUMMARY OF FINDINGS

This study provides information on costs for the current bilingual education program and estimated
costs for a proposed program in dual-language instruction for all students.

In 1973, a bilingual education program was enacted by the Texas Legislature. By 1975, this
program was required for grades K-3 with a $25 per student supplement. This amount was raised
to $50 per student in 1981, and current law provides for a weight of .1 added to the adjusted basic
allotment for students served in bilingual education or English as a second language (ESL), grades
K-12. An analysis of costs by function shows that more than 90% of this supplement is used for
program operations and less than 1% for program improvements.

Actual statewide expenditures for the 1990-91 school year reflect total per pupil costs of $828 per
pupil served in a bilingual and/or ESL program. Total program costs were approximately $236.5
million, of which $48.1 million was the state appropriation. Information for calculating full-time
student equivalent (FTSE) costs for 1990-91 is not available.

The methodology used to calculate costs replicates that used by the private firm of Coopers and
Lybrand in their 1988 study of bilingual costs in 22 representative districts. They identified an
average bilingual education direct incremental program cost of $564 per full-time student equivalent.

Current bilingual education and ESL programs have encouraged thousands of linguistically different
students to stay in school. These programs have provided 1) language development in English and
the home language in a way that the students understand,; 2) development of a positive self-concept;
and 3) instruction in mathematics, science and social studies through comprehensible input.

A vision of a dual-language program for all students to prepare them to compete for jobs with
individuals from other industrialized nations is important to the future economy of this state.
Language skills would lift Texas students to international parity. Proposed dual-language programs
would improve student understanding of other cultures, use language learning for raising cognitive
skills, enhance self-esteem and interpersonal relations, use interdisciplinary units to reach for
mathematics and science with international standards, and refine effective oral and written
communications skills. A phased plan for achieving dual-language proficiency for all students
includes field input through an advisory board and regional coordinators, parent conference
participation, pilot programs, a teacher training renaissance, curriculum development including
honors courses, dissemination of best practices from model sites, international research exchanges
and a legislative accountability component. A $40,000,000 program development cost is estimated
for the coming biennium. School districts, universities, parents, business and industry, and
legislators would be partners in a creative, comprehensive initiative to benefit all students.

Characteristics of the proposed dual language program for all students are based upon a review of

descriptions of seventy-six language programs in the United States and empirical research on
significant issues for bilingual education.
GIFTED AND TALENTED EDUCATION
SUMMARY OF FINDINGS

This report provides an overview of the Texas program for gifted students and its costs and includes
information regarding how educational reform issues have impacted services to students with
exceptional ability, interest, and motivation. Even though limited funding has been available since
1979, districts were not required to identify and serve gifted students until the 1990-91 school year.

This means that for many districts, services are less than two years old. Interpretations of the data
must be made in light of this fact.

In 1987, the 70th Legislature passed House Bill 1050. This legislation required that each school
district adopt a process for identifying gifted and talented students in the school district’s population,
and not later than the 1990-91 school year, establish a program for those students in each grade
level. When the legislation was passed in 1987, 372 districts were already operating programs for
gifted and talented students. Those programs served 92,482 Texas students, usually in grades three
through eight. Three years later, when the legislation was implemented in the 1990-91 school year,
services were available in kindergarten through grade twelve to over 245,000 youngsters. Over this
same period, the funding weight increased from .047 per pupil served in 1989-90 to the current
weight of .12 per pupil served.

Although it is too early to tell the true impact that this program will have on education in Texas,
several findings will be highlighted. Those findings are:

i. Due to the legislation, identification of gifted students and services to this population are
expanding to include all grade levels and beginning to address the issue of equity.

ae The legislation is increasing the percentage of minority students who are participating in
programs for gifted students. Each year the program has been in effect, the number and
percentage of participating minority students have increased, particularly in the lower grade
levels. Program enrollment, however, does not yet reflect the diversity of the state’s student
population.

We In 1990-91, approximately $37 million in state funds were allocated and disseminated to
districts for assessing and serving gifted students. Districts expended approximately $141
million on the program, or roughly $574 per student served, with $12 million allocated for
all expenses other than payroll costs. In 1991-92, the budgeted amount for the program
increased by more than $5 million for a total of $146 million. At the same time, the state
allocation increased by $7.6 million to $44 million. This trend indicates that districts were

serving more students, receiving more state funding, and putting less of their own monies
into program services.

4, In the 1986-87 Program Evaluation Report completed by the Texas Education Agency, one
of the major areas of need in gifted education was professional development. However, very
little money allocated to gifted programs currently is used for this purpose. In 1990-91, $1.3

million, or less than one percent of total funds used for gifted education, was spent on
curriculum and staff development.
5. Less than one percent of all monies for services in gifted education was spent on books,
magazines, and periodicals, and less than three percent was spent on supplies and materials.
This implies that few supplemental instructional materials are available to enhance the
curriculum for gifted learners.

Generally, then, districts are beginning to meet their obligation to assess students for gifted programs
and efforts to ensure more participation by culturally and ethnically representative student are being
made. This progress must continue while working toward excellence in program services.
TEXAS TEACHER CAREER LADDER
SUMMARY OF FINDINGS

A career ladder for Texas public school teachers was first implemented in 1984-85 as a result of
House Bill 72, passed by the 68th Texas Legislature. The system was initiated to reward excellence
in the teaching field, to retain talented teachers, and to attract promising students to the teaching
profession. The original intent of the legislation was not to reward all teachers as they accumulated
years of experience, but to distinguish the most deserving among the profession of all teachers.

The career ladder consists of four levels. As of 1991-92, only levels one, two and three have been
implemented. Placement decisions are made by the employing school district on the basis of a

teacher’s years of experience, level of college degree earned, job appraisal scores, and higher
education course work or advance academic training.

In 1984-85, districts were required to spend $30 per ADA for the payment of career ladder
supplements. In the 1991-92 school year, districts received $90 per ADA to be used to supplement

the salary of each teacher above level one. The total allotment for the career ladder has increased
from $86.6 million in 1984-85 to $281.3 million in 1991-92.

All teachers begin on level one of the career ladder. The number of teachers placed on level two or
three has increased from 40 percent in 1984-85 to 60 percent in 1991-92. Twenty-six (26) percent
of all teachers are now on level three of the career ladder. The percent of teachers placed on level

two has declined from a peak of nearly fifty-three percent in 1987-88 to thirty-four percent in 1991-
52,

State law establishes the range of supplement amounts to be awarded to teachers placed on levels two
and three. For level two, the range is $1,500 to $2,000, and for level three the range is $3,000 to
$4,000. The average supplement paid has remained relatively constant over time. From 1984-85 to

1991-92, teachers placed on level two have earned an average supplement of $1,630, and those on
level three have earned an average of $3,170.

The number of teachers on the career ladder, as reported to TEA, is lower than the actual number of
teachers placed. This is due in part to the fact that collection of placement data occurs in the fall of
the school year, often before districts make placement decisions. In most years, the actual

expenditure amounts for the career ladder are Significantly higher than the supplemental salary costs
of the teachers reported as placed.

If the career ladder does not fully fund the supplement for eligible teachers, districts may reduce the
supplements to the minimums, or they may adopt stricter performance criteria than those established
by the state. Evidence exists that the current allotment does not fully fund the career ladder. In order
to be fully funded, the TEA report asserts that the allotment should:

° support the placement of all eligible teachers, and

° allow for the payment of the maximum supplement amounts for all teachers placed.

It is estimated that to fully fund the career ladder would require $517 million in 1991-92, and the
allotment would need to be increased to $165 per ADA.
me

TRANSPORTATION ALLOTMENT
SUMMARY OF FINDINGS

Transportation formulas allocate more than $200 million each year as part of the Foundation School
Program. TEA staff examined both average expenditures for the groups identified in statute as well
as the range of expenditures per mile in each group. Substantial variation in cost per mile was found
in each group of districts as well as across districts. The report recommends increases in
transportation allocations per mile to take effect in the 1993-94 school year. These adjustments would
raise the cost of the transportation allotment by approximately 40%.

Public school transportation is a major business enterprise. During the 1990-91 school year more than
1,086,000 students were carried over more than 270 million miles in nearly 28,000 school buses.
Most of these buses are classified as "Type I", which covers buses in size from 17 to 83 passengers.
A typical bus carries 71 passengers and has a replacement value of $38,000.

{n general, transportation expenses are similar for different types of school districts. However, the
largest districts tend to spend proportionately more on driver salaries, whereas the smaller districts
tend to show proportionately more expense for bus materials, including motor fuel.

Transportation funding is based on formulas contained in Chapter 16.156 of the Texas Education
Code. The current allocations per mile have been in effect since the 1984-85 school year. Funding
for the transportation allotment is based on linear density, which measures the relationship between
the number of students carried and the length of the route. Linear density formulas are calculated for
the district as a whole, not for each route. The most efficient bus system transports the maximum
number of students possible over an approved route.

An examination of the transportation data reveals that special education related expenses represent
approximately 23% of all transportation operating expenses. Special education transportation costs
are reimbursed on the basis of actual trip costs up to a maximum rate of $1.08 per mile as set by
appropriation. Other transportation expenses include the costs of transporting students to extra- and
co-curricular events. Although the cost of these expenses cannot be calculated precisely, there is data
available relating to the number of miles travelled. Of the 274 million miles travelled, approximately
33 million, or 12% are reported as extra- or co-curricular.

The analyses of capital and operating costs indicate that substantial adjustments should be made in
formulas for transportation in order to reflect the actual cost of providing services and replacing
equipment. The analysis also indicates that the current linear density groupings do an adequate job
of reflecting groups which have substantial variances in cost per mile.
REPORT ON LONG-RANGE PLAN FOR TECHNOLOGY
SUMMARY OF FINDINGS

In November 1988, the State Board of Education (SBOE) adopted the 1988-2000
Long-Range Plan for Technology of the Texas State Board of Education. This plan has
been cited as the premier state technology plan, and it has served as a model for other state
technology plans. The plan formulated a vision for the future application and management
of technology in public education. Two major strategies were developed to accomplish the
vision and the purposes of the plan. The first was to empower local school districts with
sufficient funding to purchase the equipment for teachers and students to use in the
teaching and learning process, and for training for teachers and administrators in the
effective use of technology. While school districts have spent various sources of funds on
technology, state dollars specifically for technology have not been allocated until FY93.
The second strategy was to establish statewide infrastructures to facilitate communication
via telecommunications, to advance research and development through a collaboration
among business, higher education, and K-12 education, and to address equity via distance
learning and support for technology in Regional Education Service Centers. Funding for
these activities was first appropriated in FY90 as a result of the passage of Senate Bill 650
during the 71st Legislature.

As part of the School Facilities Inventory Survey in the spring of 1991, the agency
collected information on educational technology. Overall, there is a statewide ratio of about
13 students per computer. However, the vast majority of these computers is nearing the
end of their useful lives. It is clear that school districts still will need a substantial increase
in computer workstations (approximately 233,000 per year) to reach the SBOE's
equipment targets in the Long-Range Plan for Technology. Full implementation of the
Statewide strategies will require between $15 million and $23 million per year for the five
year period.

To successfully introduce technology into the educational process, it is essential that
educators acquire the appropriate skills. To accomplish this, both preservice and inservice
instruction must be made available to teachers. Optimally, teachers should have a minimum
of five days of training per year regarding the use of technology in education. In addition
to basic operation of the technology and the appropriate software, teachers need staff
development in how to use various technologies and software packages in instruction.
They need to understand how the introduction of technology into the teaching/learning
environment changes how the subject is taught, and in many cases changes what is taught.
The need for staff development does not diminish once the basic operations of the
technology are mastered; in fact, the need may increase as new software and information
becomes available and as changes in the classroom caused by the introduction of
technology become incorporated into the educational process.

The estimated costs for the state of implementing essential components of the Long
Range Plan for Technology are greater than the funding which will be available through the
Technology Allotment. The amount of the Technology Allotment has been set at $95.9
million for FY93 increasing to $187.3 million in FY97. The amount by which estimated

penn exceeds funding ranges from $456 million in FY 93 to $535 million in FY
7.
rome

SCHOOL FACILITIES
MARY ORF FINDINGS

entirely local Concern, Not until the Edgewood I decisio
the funding of facilities did the Texas Education Agency need to maintain data on Public €ducation’s
Physica] Plant. During the Summer of 1990, the Texas Legislature Passed Senate Bill 1] during the
Sixth Called Session, including 2 $5 million 4PPropriation to the Texas Education Agency for the
Conduct of a comprehensive inventory of the State’s public Schoo] facilities and educational]
fechnolog : € massive undertaking, known as the Building and Educational Technology

Assessment or BETA Project, involved teams of architectura] and engineering Professionals collecting
Space and Condition information for al] Public schoo] facilities in Texas,

An analysis of the inventory data indicates that While there js gteat diversity of circumstances and

history behind the Capita] assets of Public Schoo] districts, the vast Majority of all buildings appear
to be in 800d or fair Condition.

573,791 Tooms
° Total Square footage of 379,915,816

° 15,383,677 Square feet, or 4.05% of the total is in portable buildings
° Median size of elementary Schoo] genera] Classroom is 715 square feet

umber of one time and On-going facility needs,

COST ESTIMATES TO MEET SPACE NEEDS

ACTIVITY ESTIMATED COST
Replace space rated below fair $895 million
Relieve classroom overcrowding $126 million
Provide adequate science labs $31 million

Provide sufficient gymnasium space $988 million
Provide sufficient library space $621 million
Replace excess portable space $197 million
Renovate aging space (annually) $66 million

Needs for student growth (annually) $420 million

For the 1981-82 school year, total school district debt was approximately $4.7 billion. At the end of
the decade, for the 1989-90 school year, total debt had risen to approximately $7.1 billion. During
the past three years, school districts have been spending approximately one billion dollars annually
to meet their debt service obligations, including principal and interest. For the 1991-92 school year,
districts reported that they anticipated collection of $982 million in debt service tax revenues. Debt

service payments will exceed $1.1 billion, or seven (7) percent of all school district expenditures,
excluding capital outlay.

The debt burden of school districts is serviced by taxes on property. The average tax effort needed
to raise this year’s debt service across the entire statewide tax base would be between $0.16 and $0.17
per $100 of assessed valuation. Approximately 800 of the state’s 1,051 districts have debt service

payments. Among these districts, the average effective rate is $0.19, although more than 200 district
report rates above $0.40.

Numerous options for financing state participation in school facilities have been employed in other
states. Major options which have been discussed in Texas include per capita funding, guaranteed
yield funding project or need-ba