Public School Funding

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Texas enrolls more than 5.3 million public school students in more than 1,200 districts and charters across 268,000 square miles. The school finance system is broken and no longer meets the state’s growing demands. Additional investment is needed now so our public schools have the resources to prepare all students for college and career opportunities.

Texas Rank

2018 Quality Counts report card for public school spending nationwide

What’s wrong with the current system?

Our growing Texas public school system is underfunded, ranking 43rd in school spending compared to the rest of the nation.1 The lack of substantial state investment over time has made schools rely more on local property taxes to keep up with inflation, fund additional innovative programs, and attract the quality teachers our students need to compete in the 21st century.
In 2016, the Texas Supreme Court described the school finance system as “Byzantine” and “undeniably imperfect, with immense room for improvement.” Texas can do more than just provide an education funding system that meets “minimum constitutional requirements.”

How did we get here?

The school finance system uses a mixture of local and state sources to fund public schools. Local funds come primarily from one source—school district property taxes. State funds include a complex combination of sources including general revenue, recapture or “Robin Hood” payments, and lottery proceeds.
In our school funding system, just because local property values increase does not mean overall school funding increases. In fact, as local property values increase, the state share of funding declines, saving the state billions of dollars over time. There is no mechanism to automatically reinvest these savings back into our public schools.

The Shrinking State Share

The state has relied on growth in local property tax values for too long without reinvesting state dollars back into public education.

How are Texas students impacted?

Research shows increased spending on education has a positive impact on student outcomes. Yet, Texas’ investment in its public schools over the past decade remains stagnant. The lack of state support cripples local school districts’ ability to keep up with the increased cost pressures including retirement and healthcare contributions, rising utility and transportation costs, and numerous state mandates. This leaves little room for schools to provide increased teacher compensation, lower class-sizes, or other program improvements.