HB3 Update: Charter School Funding

HB3 Update: Charter School Funding

September 2, 2019 | Charter Administration

Most of your campuses are in full swing this time of year; staff developments have been completed, cafeterias are full during the lunch hours and classes full of activity. The days continue as they normally would, while the back office deciphers HB3 to make sure that all changes, compliance rules, and funding guidelines are met. As you have treaded down this path, we hope these notes have helped shed some light on changes implemented through HB3.

This week, TEA focused on Charter School Funding in their “HB3 in 30 Series.” We have previously touched on many of the subjects discussed, but it’s all great information to have in one place. Please read through the summarized changes and let us at Charter School Success know how we can help you and your campus in any way we can.

Changes to Tier One

Overall, funding has increased for charter schools. Charter School Tier One allotments are calculated using the state average of school districts’ Basic Allotment (BA) of $6,153. This allotment no longer consists of the Cost of Education Index (CEI), but instead a separate Small/Mid-Size Allotment was derived to allocate more funds to the charter. Along with the Small/Mid-Size allotment, a few more were added and there were changes to some current allotments.

  • Regular Program Allotment
  • Special Education – increased weight
    • Mainstream weight increased from 1.10 to 1.15
    • Spending requirement changed from 52% to 55%.
  • Career & Technology – expanded
    • Spending requirement changed from 58% to 55%.
    • CTE Allotment funds expanded to include 7th & 8th grades.
  • Compensatory Education – increased weight
    • Allotment is broken up into 5 Tiers: 0.225 – 0.275.
    • Will yield an additional $1,400 – $1,700 per eligible ADA.
    • Spending requirement changed from 52% to 55%.
  • Bilingual Education – increased weight
    • LEP only = weight of .10.
    • Dual Language ADA – LEP = weight of .15.
    • Dual Language ADA – Non-LEP = weight of .005
    • Spending requirement changed from 52% to 55%.
  • Dyslexia Allotment – new
    • Additional weight of .10 per applicable students.
  • Early Education Allotment – new
    • Additional 0.10 weight for each Pre-k – 3rd grade student.
    • If the eligible students are also LEP, then an additional .10 weight can be received.
    • Pre-k 4 programs must now be full day.
  • Teacher Incentive Allotment – new
    • Intended to bring up compensation for teachers working in high needs or rural areas.
    • Potential allotment for Master Teacher = $12,000 – $32,000.
    • Potential allotment for Exemplary Teacher = $6,000 – $18,000.
    • Potential allotment for Recognized Teacher = $3,000 – $9,000.
  • CCMR Outcomes Bonus – new
    • Economically disadvantaged: $5,000 for each graduate above the minimum threshold.
    • Non-economically disadvantaged: $3,000 for each graduate above the minimum threshold.
    • Special Education: $2,000 for each graduate above the minimum threshold.
  • Mentor Program – new
    • Stipends to teachers that mentor teachers with less than two years of experience.
    • Amount to be determined by commissioner.
    • Funds to pay for stipends, scheduled meeting time, and training.
  • Dropout Recovery & Residential Placement Facility Allotment – new
    • An additional $275 in ADA for each eligible student.
    • School is designated a dropout recovery school or student resides in residential placement facility.
  • College/Career Entrance Exam Reimbursements – new
    • TEA will pay for one college/career entrance exam.
    • The student must pass for the school to receive the allotment.
  • Small/Mid-sized Allotment – new
    • Every charter school receives this allotment regardless of size.
    • Adds an additional $1,060 per ADA to the charter.
    • Increased funding for single county districts with fewer than 300 ADA.

NOTE: The Gifted and Talented, High School Allotment, and Staff Salary Allotments were removed.

Changes to Tier Two

Funding formulas for Tier Two have not changed, but the tax rates did which effects the yield of golden and copper pennies for charters. The new HB3 2019-2020 rates are:

  • Guaranteed yield of $98.56 Golden Pennies = State average number of $0.0594 Golden Pennies
  • Guaranteed yield of $49.28 Copper Pennies = State average number of $0.0264 Copper Pennies

With the Tier One and Tier Two changes, the total estimated average M&O per ADA for Charters is expected to be $10,386 which is approximately $570 more than the previous year.

30 % Compensation Increase

With the increase of funds to the schools, HB3 requires that 30% of the increased ADA funds be spent on employee compensation.

  • 75 percent must be used to increase the compensation paid to classroom teachers, full-time librarians, full-time school counselors certified under Subchapter B, Chapter 21, and full-time school nurses, prioritizing differentiated compensation for classroom teachers with more than five years of experience; and
  • 25 percent may be used as determined by the district to increase compensation paid to full-time district employees.

Although charter schools are not subject to paying their teachers based on the Minimum Salary Schedule (MSS), HB3 requires that open enrollment charter schools pay the state’s contribution on the portion of a member’s salary that exceeds the MSS.  This means that charters now must pay the TRS Contribution rate of 7.5% of the salary above the MSS.

Need help?

For more information on how to build your Charter’s budget, please reach out to us at Charter School Success! Email info@charterschoolsuccess.com or call 1-833-I-LUV-CSS (833-458-8277).