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December 2000


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Something to Hear
Mixed Reviews
Behind the Budget Bounce

On Page 1:
Brain Gain
From our Readers
From the Comptroller: Recommended Reading for 2001
Comptroller News

Texas stats -- Fiscal and economic data

En español: Notas Fiscales de Diciembre 2000



Phone system connects Texans
with and without hearing

Something to Hear

"Texas me finish touch. Themselves leaders communication technology for Deaf people," signs Ed Bosson, Relay Texas Administrator with the Public Utility Commission of Texas (PUC).

Verbally, that would be "I have been to Texas, and they are the leaders in communication technology for those citizens with hearing loss." But Bosson is using American Sign Language, or ASL, a language with a different grammatical structure from English.

Texas is a leader because its citizens who are deaf, cannot hear or see, are hard-of-hearing or speech-impaired can use Relay Texas to communicate with people with hearing. Its the oldest publicly supported telecommunications relay service (TRS) in the United States. The program was authorized by the Texas Legislature in 1989 and is run by the PUC.

Now hear this
Here's how Relay Texas works. A hearing person uses a regular telephone and a person with hearing loss uses a teletypewriter (TTY) or, in the case of video service, a computer or telephone with video conferencing capability. Either person then calls Relay Texas service and asks to be connected to the other person or business. Relay Texas service provides operators, called communication assistants (CAs) to mediate the conversation. The CA speaks what is typed by the person with the TTY, and types or signs through video what is spoken by the person with the telephone.

Relay Texas employees type everything including background noise, and interpret emotional responses to what is said or typed. Federal and state laws protect the confidentiality of all conversations.

The service has been available for 10 years and was made faster and more efficient with the addition of the Video Interpreting Service (VIS) on September 1, 2000. TRS users who are not comfortable with or fluent in English often find conventional relay services cumbersome and inadequate. The addition of video should help make communication easier for people who communicate primarily through sign language.

Hands-on language
Communication between persons with and without hearing, even using a TTY, can be difficult because ASL, not English, is the native language of many people with hearing loss. ASL is a complex language used by the Deaf community in the U.S. and English-speaking parts of Canada.

ASL shares no grammatical similarities to English and should not be considered in any way to be a broken, mimed or gestured form of English, according to Karen Nakamura, a linguistics researcher at Yale University. "In fact, ASL shares more with spoken Japanese than it does with English."

Hand gestures are only one component of ASL. Facial features, such as eyebrow motion and lip-mouth movements, are also significant in ASL, and form a crucial part of the grammatical system. In addition, ASL makes use of the space surrounding the signer to describe places or people who are not present.

Hearing won't listen
Because of the fundamental differences between sign language and English or other spoken languages, communication between people with hearing loss and people who can hear has historically been strained. Many people will avoid accepting a Relay Texas call because they feel that it takes up too much time and is too difficult.

"Before video interpreting service, many people thought of Relay Texas as Delay Texas," says Bosson, who developed the concept of VIS. "A lot of businesses would simply hang up when the operator announced the incoming call."

For the nearly two million Texans with hearing loss, the simplest of telephone calls can be frustrating. Making a doctor's appointment, disputing a charge on a bill or ordering a pizza can be nearly impossible to accomplish without asking a friend or neighbor to intervene.

That should change with the introduction of VIS service. VIS lets phone customers using ASL reach a trained interpreter on video through a computer network, allowing a more complete translation of ASL. The system works with any telephone customer in the U.S.

"We've come a long way from depending on relatives, friends and neighbors to make what, for most people, is a simple call; to the present but unnatural method of using text telephones; to the new video service," says Bosson. "VIS is a valuable communications tool and provides more independence for people who are deaf or hard-of-hearing."

Wired for sound
The service creates a video link between users and a Relay Texas operator, who translates ASL signs into English, Spanish or text, and communicates them to people using standard voice telephones or TTYs. Months of tests at Relay Texas facilities in Austin and Lubbock showed that VIS provides a more natural method of communicating, especially for those with poor English language skills or the inability to use a text telephone. The first test of VIS was conducted in Austin.

A customer who dials up a VIS service uses a computer with video software and a camera to connect with an ASL interpreter working as a Relay operator. The two converse in ASL and the operator translates the signs, speaking to the person with hearing on the other end of the call.

Call for help
The state of Texas awarded the contract for Telecommuni-cations Relay Service to Sprint in 1991, after the services were mandated by the Americans With Disabilities Act of 1990. The contract was the company's first for TRS services. Sprint went on to become the leading provider of relay services in the U.S., with contracts in 27 states and with the federal government. In other states, relay services are provided by AT&T and Hamilton Telecommunications of Aurora, Nebraska.

"The addition of VIS in Texas will serve as a model for other states as they too provide this necessary communications tool to their citizens," says Tony D'Agata, vice president and general manager for Sprint's Government Systems Division.

More than 500 inbound and 400 outbound calls were made during the first month the video service was available in Texas.

VIS is available Monday through Friday from 7 a.m. to 1 p.m. A Spanish-English interpreter is available Tuesdays from 1 p.m. to 7 p.m. and Thursdays from 7 a.m. to 1 p.m. For more information about VIS, call Sprint Customer Service at 1-800-676-3777. Texas also offers the Texas Specialized Telecommuni-cations Assistance Program (STAP), which provides financial assistance vouchers for up to $900 to help purchase video equipment and other specialized telecommunications devices and services. The Texas Universal Service Fund supports the program through a small fee charged on every Texas telephone bill. For more information about STAP, call the Texas Commission for the Deaf and Hard-of-Hearing at 512-407-3250 or visit the Web site www.tcdhh.state.tx.us.

Robert Jones


Charter schools show promise,
but face challenges

Mixed Reviews

The 1995 Legislature gave Texas parents a new option for educating their children: charter schools.

So far, reviews are mixed. While the schools seem to help some, especially at-risk students, there are too few schools and they have been in business too short a time to fully measure their success.

Analysts at the Comptroller's office examined the short history of charter schools and recommended ways to improve the performance of the fledgling schools. Their analysis is part of the e-Texas report issued in December 2000.

What are they?
Charter schools are public schools that operate independently of the regulations that apply to traditional public schools. They accept only limited public funding and operate based on a charter, or contract, that outlines the school's mission, goals and program. The 1995 legislation allowed only 20 schools. More than 150 additional schools were authorized later, and by October 2000 there were 182 schools operating in Texas.

So far, charter schools in Texas primarily serve educational niches. "We serve as a referral for unique students in our area," says Connie Gooding of American YouthWorks in Austin. "It's not a competition yet." Instead, she says, "We provide a positive alternative to dropping out for many students."

Some administrators see the potential for competition in the future, though.

"Charter schools provide educational choice, competition and an opportunity for innovation within the public education system," says Patsy O'Neill, Executive Director of the Charter School Resource Center of Texas. She says competition in a public system forces all educational providers to improve because parents can decide which school best meets the needs of their child without the added cost of tuition.

A stifling process
It has been difficult to detect achievement gains in Texas charter schools for a number of reasons: a limited chartering process, the fact that charter schools do not have equivalent resources as public schools, and the difficulty of comparing charter school academic progress to public school progress. Charter schools are new, do not serve an equivalent student body mix to public schools, and are small in number.

Success in serving some student populations indicates that charter schools are overcoming some of the barriers, though, and changes in the chartering and support systems could lead to increased effectiveness.

In Texas, charters are granted for two types of schools: open-enrollment schools and campus program schools. Open-enrollment schools are authorized only by the State Board of Education (SBOE), and campus charters are issued by local school districts. Of open-enrollment campuses, 20 can serve any mix of students, up to 100 can operate if they have a policy for admitting students eligible for public education grants, and an unlimited number may open if they agree to maintain a student body comprised of at least 75 percent at-risk students--children from low-income and minority backgrounds who are more likely to fail or drop out of school.

Campus charters are issued for public or private campuses already in existence that would like to convert to charter status. They require a petition signed by a majority of parents and teachers at a campus and approval by the local board of trustees. These requirements are difficult to meet, and only a handful of campus charters have been issued. As of October 2000, only 23 of the 182 charter schools operating in Texas were campus charters.

Empty cupboards
Financing also can be a problem. Open-enrollment charter schools receive public money for operation and maintenance, but not for facilities, and they do not have taxing authority. They also cannot charge tuition. Charters, therefore, often operate with less money than public and private schools. The average per-student revenue for charter schools for 1998-99 was $4,709. The average for public schools was $5,658.

Consequently, charter schools sometimes must resort to paying for facilities, staff development and other operational costs by using money intended for instruction.

The schools also have difficulty obtaining loans because their SBOE charters are limited to five years. Lenders are reluctant to lend significant amounts of money to ventures with a potentially short lifespan.

The 1999 Legislature authorized charter schools to sell tax-free bonds, but unlike public school bonds, charter school bonds are not guaranteed by the state, so charters pay higher interest rates. An example of this inequity surfaced in Dallas. North Hills School, an open-enrollment charter school in Irving, sold bonds in January 2000 at a 7.75 percent interest rate. Public school bonds were issued the same day for interest rates of less than 6 percent.

Some federal assistance is available for schools operating out of existing facilities. Bonds can be issued by state and local governments on behalf of local educational entities at no interest via the federal Qualified Zone Academy Bond Program. The interest-free bonds are subsidized by the federal government through tax credits for bondholders, and can be used only for renovations to existing structures. Many charter school officials, however, are not aware of the program.

Support is scarce
Logistical resources also can be hard to obtain. Many charter school administrators have little or no background in public school administration and need training in state reporting requirements, business issues and special education. Training can be difficult to acquire due to financial constraints.

Little of the training available from the Texas Education Agency (TEA) is applicable to charter schools, and services offered by the state's regional education service centers (RESCs) is not always useful because of cost or inapplicability. TEA and RESCs lack sufficient resources because they are focused almost entirely on traditional public schools. Texas charter schools in the 1999-2000 school year served 28,950 children, about 0.7 percent of the state's public school population.

The situation is improving. Patsy O'Neill says RESCs are providing more training opportunities than they used to, and the Charter School Resource Center of Texas, a nonprofit funded by private sources, offered 86 charter-oriented courses across the state in 2000.

Annette Hughes of Seashore Learning Center in Corpus Christi says the center does not have enough resources and manpower to efficiently serve the state's schools. She says deficiencies in resources and funding are a source of frustration for charter administrators. "There's a push to have an alternative to public schools," she says. "The state should do what it can to back charter schools up."

In addition, regulations are still developing regarding charter schools, so changes are common. "The rules are always changing," Hughes says.

She says the state regularly adds requirements and policies for charter schools, but doesn't do a good job communicating those changes to schools. "You don't always know you need something until the state tells you you're not in compliance," she says. She advises always getting communications with the state in writing.

A family affair
An unusual complication is the makeup of some charter school boards. Many boards are small, some with only three members. As many as 10 to 15 percent of those boards consist of close family members, according to Brooks Flemister, former TEA charter school senior director.

"Anytime there's any type of family gathering, they form a quorum. And anytime they mention schools, it becomes a violation of the Open Meetings Act," Flemister says. While there have been no incidents so far where this has been a problem, he says "the potential there is great."

Raising the bar
Whatever the challenges, the bottom line for any school is academic performance. Texas schools are measured by students' performance on the Texas Assessment of Academic Skills (TAAS). The Texas Center For Educational Research (TCER), a nonprofit research organization in Austin, gathered data on 61 Texas charter schools and found that at-risk students in charter schools showed greater improvement in their TAAS scores from 1998 to 1999 than did at-risk public school students. The report, Texas Open-Enrollment Charter Schools: Third Year Evaluation, showed at-risk charter students increased their TAAS scores 15.9 percent, compared to a 6.7 percent increase for at-risk public school students in the state. However, the interpretation of scores involves several factors.

Students in at-risk charter schools started out with much lower scores than at-risk public students. Only 15 percent of charter school at-risk students passed all TAAS tests in 1998, compared to the state average of 61.2 percent for at-risk public school students. The evaluation noted that if charter schools continued to improve at the 1998-1999 rate and public school at-risk students had no improvement, it would take at least another two years for charter school scores to equal the state average for economically disadvantaged students. Scores for charter school students who were not at risk also were below public school scores in 1998--64 percent vs. 73 percent.

One reason TCER gives for the lower scores is the high number of inexperienced teachers in charter schools. The average teacher experience in charter schools is 5.5 years, compared with 11.8 years for public school teachers. Researchers caution, however, that only two years of data on such a small sample size cannot demonstrate a meaningful trend.

A number of recommendations for improving the creation and operation of charter schools will go before the Legislature in 2001. Texas already has one of the strongest charter school statutes in the country according to the TCER and improved support and greater numbers could help charter schools meet their potential.

Suzanne Staton and
Byron Schlomach


Tools for Teaching

Financing, training, support services and other issues present challenges to operating a charter school in Texas. Analysts at the Comptroller's office looked at these issues and made several recommendations in the Comptroller's e-Texas report released in December 2000.

* Allow universities to issue charters and eliminate the cap on the number of charters.
The State Board of Education (SBOE) is the only authority overseeing charter schools. Other states give authority to state universities, and Texas could too. This would take some regulatory burden off the SBOE. Lifting the cap on the number of charters would increase opportunities for all Texas school children.

* Include student improvement in evaluations of open-enrollment charter schools.
Snapshots of student results, as reported through the Texas Assessment of Academic Skills, do not provide useful information on a charter school's effect on student performance. Many charter schools have a high proportion of recovered dropouts and other students who were not thriving in public schools. Open-enrollment charter schools could be judged more accurately by an examination of improvements in student performance over time.

* Give charter schools their share of the average daily attendance funds.
About $137,000 of the state's annual $33 million basic appropriation to Regional Education Service Centers is for charter schools' average daily attendance. The money could help finance charter school board and administration training and other services.

* Require enough board members to avoid quorum conflict.
Many charter schools are family owned and operated. They need to add enough people to their boards to avoid open meetings conflicts at family gatherings.

Other recommendations in the e-Texas report would remove the five-year limit on charter schools to encourage private investment; allow schools to contract with private firms for school facilities; permit worksite schools to give admission preference to children of employees of the business providing the facility; and encourage the development of distance learning charter schools.



Population, federal mandates
drive state spending increase

Behind the Budget Bounce

There was a sizeable state spending shift in the 1990s, as the state of Texas put more money into health, human services and public education.

Funding for all state services increased during that period, but the greatest increases were in those three areas. State spending for health and human services more than tripled, from $5.8 billion in 1990 to $17.6 billion in 1999. Public education spending nearly doubled, from $6.25 billion to $12.2 billion.

A change in the funding priorities of state leaders coupled with federal mandates drove the spending shift, which is part of a decade of increased public service spending.

Health costs rising
The expenditures for health and human services make up 36 percent of all state spending. Of that amount, $11.1 billion went to Medicaid payments, a more than 240 percent increase since 1990.

The Texas Medicaid program is a unique combination of federally-mandated minimum coverage and state-determined optional coverage. Some of the rise in costs is the result of federal and state legislation to expand eligibility and covered services. For example, the state chose to increase coverage for pregnant women and to increase the income eligibility cap for long-term care.

Other factors affecting the rise were inflation in health care and prescription drug costs, increased payments to local hospitals serving indigent populations and the high cost of providing services to the elderly and people with disabilities.

Most of the spending for Medicaid was for the elderly and people with disabilities, not for women and children. While less than a quarter of Medicaid recipients are elderly and people with disabilities, they receive two-thirds of the money. And as the state's population ages, that share could grow.

More students, spending
The second largest share of state expenditures in 1999, $12.2 billion, was for public education. That's up from $6.25 billion in 1990. Two things--equalization of expenditures and enrollment growth--drive public education spending. Enrollment has risen from 3.3 million students in 1990 to nearly 4 million in 1999.

Court rulings also drove up costs. Responding to several Texas Supreme Court rulings that the state€s school funding system violated the state Constitution, the Legislature increased state funding for public education throughout the 1990s. Every legislative session during the decade saw large increases in public education appropriations. The 1999 Legislature increased state funding by more than $4 billion for the first biennium of the new millennium.

The 1999 expenditures for public education made up 25 percent of all state funding. Despite the growth in spending, however, that share is down slightly from 1990 when public education made up 27 percent of the state budget.

About $4.8 billion of the state's budget went to support institutions of higher education, up from $3.5 billion in 1990. Increases in expenditures for higher education over the last 10 years were primarily the results of enrollment growth, inflation and an expansion of facilities and programs in South Texas.

Still, higher education made up a smaller portion of the overall state budget--down from more than 15 percent of state spending in 1990 to less than 10 percent in 1999--even though the number of students grew from 797,000 in 1990 to 854,000 in 1999.

Transportation spending, mostly for highway construction and maintenance, grew from $2.7 billion in 1990 to $3.9 billion in 1999. The need for more highways makes sense when you consider how much driving people do in Texas; the number of daily vehicle miles traveled grew from 316 million in 1994 to 395 million in 1999, up more than 25 percent.

But those miles of pavement are getting crowded. While the number of miles traveled jumped by a quarter, the number of new lane miles was up less than 2 percent from 1994 to 1999.

High cost of incarceration
The Texas prison system also has expanded. The state's prison population grew from about 92,000 prisoners in 1994 to 147,000 in 1999, a 60 percent increase. Spending to house inmates went from $849 million in 1994 to about $1.7 billion in 1999, an increase of nearly 100 percent. If adult probation, parole and juvenile justice system costs are included, spending went from $1.2 billion in 1990 to $3.2 billion in 1999.

Part of the increase is due to a dropping parole approval rate. In 1990, nearly 80 percent of all eligible inmates were paroled. In 1998, the last year for which figures are available, only 20 percent were paroled. As a result, the average length of sentence served was up 50 percent at the end of the decade.

A 25-year-old federal lawsuit, Ruiz v. Department of Corrections, also drove up costs. As a result of federal court mandated rules, the Texas Department of Criminal Justice eliminated many jobs performed by inmates, upgraded medical and psychiatric services and hired additional guards to increase the ratio of officers to inmates.

Most of those changes were made in the 1980s, but the cost increases they created have continued into the 1990s. As a result of Ruiz, the average cost to keep someone in prison rose from $8.64 a day in 1980 to $38.71 a day in 1998.

The bottom line
State spending more than doubled in the 1990s, from $23 billion in 1990 to $48.4 billion in 1999. Adjusted for inflation, growth was more than 6 percent a year.

Public education and Medicaid made up more than half of all spending in 1999. Throw in higher education, prisons and highway construction and maintenance, and you've got about 75 percent of all state spending.

All other state expenditures totaled $11.4 billion in 1999, up from $10.3 billion in 1994, a 10 percent increase. That mirrored the state's population growth, also up about 10 percent from 18.3 million people in 1994 to 20.1 million 1999.

And, regardless of what happens with future state funding priorities or changes in federal mandates, population growth alone will affect state spending. The U.S. Census Bureau projects the Texas population will grow nearly 10.5 percent--from 20.1 million to 22.2 million by 2005. The population is projected to hit more than 24.1 million by 2010; a nearly 20 percent growth. That growth could dictate another shift in spending.

Comptroller Staff


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