Public Education Funding

A stack of $100 bills.

Well-funded schools are not only well-staffed schools but also safe schools.

How Schools Are Funded in Texas

Six different sources fund the state share of public school funding:

  1. Available School Fund
  2. Property Tax Relief Fund
  3. Tax Reduction & Education Excellence Fund
  4. Lottery proceeds
  5. Recapture
  6. Foundation School Fund (General Revenue)

Key Facts About the Basic Allotment

The basic allotment, the state’s foundational contribution (via general revenue) to local public schools has been stuck at $6,160 since the 2019-2020 school year.

  • An increase to the basic allotment would trigger salary increases for teachers and support staff.
  • If the basic allotment had been annually adjusted for inflation using the Bureau of Labor Statistics Consumer Price Index (CPI), today, it would be $7,075 per student, and schools would have received almost $4 billion in additional state aid during the last two academic years.
  • Texas ranks 36th in the nation for per-pupil funding. That means fewer resources for students’ classrooms and academic or extracurricular programs. It also means higher turnover among teachers and staff because of stagnation in compensation.
  • An increase to the basic allotment would allow local public school districts to provide raises to teachers, who make an average of $7,449 less than the national average teacher salary, and support staff who earn close to poverty-level wages.
  • Additionally, without an increase in the basic allotment, more districts will cross the line of being considered “property-wealthy” and will begin to pay recapture.

Adjustments to the Basic Allotment

In addition to the basic allotment, adjustments to funding are made based on school district characteristics — like being small or midsize — and student characteristics, including the number of emergent bilingual students, economically disadvantaged students, and students receiving special education services.

All of these funding adjustments are used to determine how much revenue a school district is allowed to receive for operating its schools. These adjustments are all calculated from the basic allotment, so increasing the basic allotment would also increase funds for higher needs students.

Cover of The Lost Decade report

Read More: The Lost Decade

In “The Lost Decade,” a report published in April 2022, Texas AFT and Every Texan revealed startling trends in Texas’ funding of public schools, as well as the effects that underfunding has had on teacher and staff salaries. 

HB 3 Put Tax Cuts Before Kids

Some legislators will tout House Bill 3, passed in 2019, as a fix for school finance. But HB 3 is primarily a tax cut bill that is making an already unfair school finance system even worse.

The rapid rate of Texas property value growth means that the cost of the tax compression built into HB 3 will increase significantly in the next budget cycle. Without an alternative revenue source to replace property tax revenue lost to tax compression, and without a significant increase to the basic allotment, resources for public schools will decline and students will pay the price.

Increasing the basic allotment is the best and most efficient way to address these deficiencies.

Action Needed

Increase the basic allotment to allow districts to invest in teacher and support staff raises, as well as additional funding for student needs

Create an annual automatic adjustment to the basic allotment that accounts for inflation and the growing education needs of students.

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