Governor Abbott's State of the State

Governor Abbott gave his State of the State from the Noveon Magnetics Corporation last night. While traditionally the State of the State has been given during a joint session of the House and the Senate, that precedent changed last session during COVID.

During his approximately 30 minute speech (you can watch it here and read his transcript here) the Governor listed seven Emergency Items (wording below from Gov's speech):

• Reducing property taxes
• Ending COVID-19 restrictions forever in Texas
• School safety 
• Educational freedom, specifically for parents' rights
• Ending the "revolving door bail"
• Securing the U.S.-Mexico border
• Fighting the fentanyl crisis

What was interesting about the Governor's approach to the school voucher section is he referenced SB 1716 - which created savings accounts to provide supplemental education for special education students. Here is that except:

The way to do that is with school choice through state-funded Education Savings Accounts. We’ve seen them work in other states — and here in Texas. I created Education Savings Accounts for special needs students. It worked so well that a bipartisan super-majority passed it into law and now wants to increase funding for it. Now, it’s time to provide every parent with the ability to choose the best education option for their child.

In previous meetings, we have discussed the possibility of SB 1716 being utilized as a vehicle for vouchers, so while this is not a surprise, it does give us insight into how vouchers could be slipped into a larger bill.

Commissioner Morath Testifies to the House Appropriations Committee

• Property Tax Proposals: HB 1, as introduced, dedicates $9.7 billion for additional property tax relief. LBB analyst Maggie Jebsen walked through four different options in TEA Rider 81(d) that would provide additional tax property relief. These methods include reducing the state compression percentage; reducing the MCR by an equal amount; reducing the amount of local property tax levies can grow before tier one rates compress to less than 2.5%; and increasing the homestead exemption.

• For tax year 2022, there are 701 districts at the MCR floor and only about 50 districts at the ceiling. Taxpayer benefit from each of the options would vary based on the current district tax rate and property tax growth in future years. Tax compression is generally revenue neutral for districts by design but homestead exemption increases are usually paired with short-lived hold harmless.

• Teacher Pay: The Commissioner testified that the number of employed teachers, the teacher attrition rate, and average teacher pay have been at the highest levels ever. Also, the student to teacher ratio is also at an all-time low of about 15 to 1.

• However, Morath identified that the small and rural districts have a much lower median salary (about $8,000 less than statewide average) because they must operate with more teachers per student due to small student counts. As he pointed out in Senate Finance on February 6, it is worthy of policymakers to consider a larger multiplier for the Small and Mid-sized Allotment to bring the rural teacher pay up to parity with the state. 

• Teacher Incentive Allotment (TIA): Morath reported that the TIA program is growing in popularity and will result in an increase of the total allotment amount. Vice Chair Gonzales reiterated the need for a launch grant to help rural districts that lack the resources to stand up the program on their own. Morath noted that to increase the number of districts participating in the TIA, maybe the Legislature would need to consider creating a new lower designation. 

• Basic Allotment: Commissioner Morath presented that a $50 increase to the Basic Allotment would result in a $71 increase in average per-pupil funding in the state. This because almost all of the allotments in Tier One are based on the BA. He also noted that a $50 increase to the BA would result in a state cost of about $358 million. 

• School Safety Allotment: As he stated in the Senate Finance hearing last week, a hybrid structure for the allotment to include a per campus minimum and then fund on ADA would allow schools to have a sufficient level of resources to address ongoing school safety needs. 

• Instructional Materials and Technology Allotment (IMTA): HB 1 restores the IMTA to more historic levels of $1.05 billion. Morath reported that the cost to replace e-learning devices, such as laptops, is about $250 million each year. He presented that if additional instructional material investments are not made, districts would probably not replace devices, use other funds for that purpose, or spend less on textbooks. He elaborated that teachers do not have enough time to prepare for lessons and if there is a shift of spending away from textbooks even further, this would probably lead to more teachers quitting the profession. 

You can find the full video here.