The House Appropriations Committee met Tuesday to review the state finance implications of future population growth and implementation of several bills passed in 2023. (View the committee notice here.)

Space conversation turns to discussion of CTE rigor 

One bill discussed was House Bill (HB) 3447 related to the Texas Space Commission. During testimony, Rep. Gene Wu (D–Houston), had a soapbox moment when he mentioned the number of uncertified teachers teaching in Texas classrooms and that, in his opinion, learning for the sake of learning and a love of learning are gone. He emphasized that while he loves the idea of space exploration, we need to use our resources to inspire students on Earth to love space and motivate them to work in these fields. Committee Vice Chair Mary Gonzalez (D–El Paso) also commented that she wished her colleagues shared the same level of excitement for other areas that require funding as they do for space. Rep. Gary Gates (R–Rosenberg) said he doesn’t think career and technical education (CTE) classes are doing what they should and aren’t helping with space exploration. He mentioned that students are gravitating to what he calls “easy subjects,” such as floral design and Microsoft Word certification, when they should be focusing on areas in which there is a shortage of skilled labor. Gates wants high school students to learn the same things they would at Texas State Technical College. One person on the invited panel mentioned this is a nationwide problem and that state standards need to be revised to include industry standards that would give students a range of skills desirable to employers. The panelist said current state standards are not robust enough to enable students to transition directly from high school to the workforce. To meet industry standards, many CTE programs would require partnerships to help with cost sharing. 

Committee discusses SHARS funding and special education population growth 

More directly related to education, the committee also heard invited testimony on cross-article funding streams within the Texas Education Agency (TEA), such as School Health and Related Services (SHARS). The committee has been charged with determining how to fund programs that overlap and with making policy recommendations to improve transparency and accountability between agencies. 

Kristin McGuire, deputy associate commissioner of special populations at the Texas Education Agency (TEA), reported that the number of students identified as requiring special education services increased over 10% last year alone but has increased 72% since 2014-15. Special education identification continues to increase at a faster rate than the overall student population.  

SHARS and special education often go hand in hand because an eligible student’s special education and related services are all determined by an admission, review, and dismissal (ARD) committee at the school district level. This committee develops, reviews, and updates the student’s individualized education program (IEP). The IEP prescribes what is necessary to provide a free appropriate public education (FAPE) to the student, which may contain services reimbursable under Medicaid. The current formulas do not account for services potentially reimbursable under SHARS. SHARS is a method of finance to gain Medicaid reimbursement to help students who receive special education services in public education settings. McGuire included policy considerations for the legislators: 

Trey Wood, chief financial officer of Texas Health and Human Services Commission (HHSC), explained how an audit showed that many SHARS reimbursements were more educational in nature and not medical. He explained that when HB 706 was passed in 2019, the federal government was given a means of auditing and making changes relating to interim billing, transportation, personal care services, etc. This has resulted in a $532 million loss to school districts. 

Ricardo Garcia, HHSC deputy executive commissioner of policy and quality, spoke about recent policy changes resulting from that audit. Districts will now have clearer definitions for allowable reimbursements based on changes going into effect Oct. 1, 2024. Group billing will no longer be allowed, so educators will need to document even more precisely based on individual student needs. Service logs must contain information relating to the types of provided services and must prove medical necessity with evidence for billable hours and provider qualifications. Additional support will be provided to local education agencies by one new state employee as well as another state employee to provide training. 

Dr. Karlyn Keller, division director of special education and student solutions at the Texas Association of School Boards (TASB), provided invited testimony. She testified that schools are seeing students with significant needs that require more services and that the state doesn’t seem to see the full picture. Districts expected to receive funding and were instead told of changes that will result in the loss of hundreds of millions of dollars. What’s more, these changes were not made in consultation with districts. Keller reported that dozens of districts are considering leaving the SHARS program because they can’t budget for funding they aren’t sure they will get. She mentioned districts are concerned with the lack of communication regarding the policy, which will require significant and rapid change. For example, the hearing date was Sept. 24 and changes go into effect Oct. 1, yet districts have no information about what is changing on that date. She asked for appropriations for districts because they were not prepared to lose these funds. Keller also asked for school districts to have a seat at the table on the HHSC committee that deals with rulemaking because they currently do not. She mentioned that requiring teachers to document working with students by the minute increases the administrative burden. She asked for more transparency in this complicated program and the change process. 

After testimony, Rep. Carl Tepper (R–Lubbock) said he had heard only rumors and also wasn’t aware of the audits and was thus a bit confused by the discussion. He asked questions about the audit, including whether other states had also been audited, and why this hadn’t been mentioned in the past 13 years. He was told the findings were based on just two districts and that policy was changed because “the moments were not medical [but] educational in nature.” Via HHSC, the State of Texas had contracted with a vendor, and the vendor was “too generous” with coding the information sent by the two school districts, which forced the correction for all districts.  

TEA’s McGuire suggested legislators need to decide whether they feel the state should make an adjustment to pay for the services. She also recommended moving to a weighted-/service intensity-based model to target the student’s needs rather than where they receive instruction. The Texas Commission on Special Education Funding recommended an exceptional item for special education funding to target student needs in 2022. TEA’s appropriations request was laid out to the Legislative Budget Board on Wednesday, but it only contained a $1 placeholder for special education funding. (Read more about the TEA/LBB Joint Hearing in a separate Teach the Vote post.) 

Rep. Donna Howard (D–Austin) was also confused as to why changes were being made midstream and why HHSC kept districts in the dark about funding being in jeopardy when the 2024 federal decision make these changes was related to the appeal of a 2016 audit. She wondered if supplemental appropriations should be used to make up for the loss. Howard said the districts had been in compliance but were now bearing the consequences of a vendor’s coding determination—a determination based on what the state had thought was allowable based on the past 20 years, though the federal government did not agree. She asked Chair Greg Bonnen (R–Friendswood) to consider supplemental funding for districts. Howard mentioned that districts are getting $2.1 billion less for special education and being penalized for following the law. Because HHSC and TEA coordinate on the SHARS program, she asked for HHSC to create a SHARS advisory committee and was told that Medicaid already has an advisory committee and thus a new one wasn’t necessary. Keller asked for school districts to be included in that rulemaking and to be put on that committee.  

Bonnen suggested that the Article 3 subcommittee, which considers public education, could consider supplemental funding in its appropriations discussion. Look for more discussion about SHARS and special education funding in the future. 

Watch the hearing here.