School Finance Reform Bill Passed by 86th Texas Legislature

During the most recent legislative session, a landmark school finance reform bill (HB 3) passed with broad bi-partisan support. Through increases in the basic allotment, school property tax reform, and other provisions, HB 3 reduces recapture by $3.6 billion, or 47 percent, over the biennium. The bill does include the use of current year values in school finance calculations. Legislative leaders said the $11.6 billion proposal would increase the state’s share of public education spending from 38 percent to 45 percent.

Here is how some of that money is parsed out:

$4.5 billion in education reforms

  • Basic allotment increased to more than $6,160
  • K-Grade 3 early education allotment for economically disadvantaged students and English language learners that can be used to fund full-day prekindergarten for eligible students
  • State compensatory education funding that provides additional resources to children living in more severe poverty
  • Increased funding for students with dyslexia, receiving special education services, and being served in residential treatment facilities
  • Outcomes-based funding program for high school students
  • Increased facilities funding
  • Updated transportation funding ($1/mile)
  • Professional development for early education teachers to get kids reading on grade level by third grade

$5 billion in property tax relief

  • Lowers property tax rates by an average of 8 cents in 2020 and 13 cents in 2021
  • 2.5 percent tax compression starting in 2021

$2 billion for educator compensation

  • 30 percent of the basic allotment increase must be used to increase compensation for teachers, librarians, counselors, and nurses (with no provisions for equal or across-the-board increases)
  • Recommendation to prioritize compensation for teachers with more than five years of experience
  • Funding for incentive pay programs
  • Funding for locally developed merit pay programs

Visit the Texas Plan website and read the one-pager provided by legislators.

Read more in The Texas Tribune.

In the interim

Texans for Strong Public Schools will monitor implementation of HB 3 during the interim and keep our advocacy community updated. Sign up for our mailing list to get updates delivered directly to your inbox, and learn how to be an advocate going forward.