Analysis: Texas schools facing lowest inflation-adjusted state, local funding since 2020

For most of the 2023 legislative year, public school advocates pushed for a $1,000 per-student increase in state funding, insisting the money was necessary to keep up with school districts’ rising costs.

Teachers rallied at the Capitol, demanding more money for classrooms, salaries and student needs.

In ongoing dissonance, Gov. Greg Abbott also spent the year praising the Legislature for investing in schools. The governor has said the Legislature can and has invested in public schools while at the same time supporting school choice, a controversial proposal that uses public money to pay for children’s private school tuition.

"Thanks to our legislators, per-student funding is at an all-time high," Abbott said during his State of the State address Feb. 16, 2023. "We provided more funding for public education and more funding for teacher pay raises than ever before in the history of the state of Texas. This session we will add even more."

After the spring legislative session and four additional special sessions last year, lawmakers approved about $7.4 billion in new money for K-12 schools, but education finance experts argue that money isn't going directly into classrooms and is far less than what schools need.

An American-Statesman analysis of Texas education financial data revealed that state and local school funding has not kept up with higher costs and increasing demands. State and local education funding, adjusted for inflation, reached a peak during the 2019-20 school year and has since declined, though actual state and local allocations per student have steadily increased since 2014.

The Statesman analyzed more than a decade of state and local education funding, compared data from Texas school finance agencies and experts and used the Texas Consumer Price Index to adjust for inflationary factors.

The analysis found that on average, Texas public schools have received $10,387.03 in the 2023-24 school year for each of the 5.07 million students from state and local allocations — 1% more than the $10,290.19 per student last year and 5% more than the $9,897.55 in 2020, according to Texas Education Agency data.

However, adjusted to 2024 dollars, per-student funding from state and local sources is down by 12.9% — $10,387.03 this year compared with $11,919.13 per student in 2020.

The state allocates at least $6,160 per student, an amount known as the basic allotment. On top of that baseline value, the state determines how much extra funding to allocate to districts for certain additional categories such as special or bilingual education or the district's size and technology requirements. Those allotments combined give districts their total average annual funding per student.

Teachers: Frustrated by Texas legislative priorities, lack of funding

Texas bases per student allocations on attendance, so students' sick days can translate to millions in lost funding for districts — which, in some cases, made funding more volatile after waivers for COVID-19-related attendance expired. The state does not make final enrollment counts publicly available until several years after the end of a school session. For that reason, the Statesman's analysis of per-student spending uses daily attendance numbers rather than enrollment numbers.

Adjusted for inflation, the data show schools in this academic year receive about the same funding per child as they did in 2014.

Statewide, public schools are funded largely through a combination of lawmaker-approved state dollars and locally collected property tax revenue, along with other contributions.

Did Texas schools receive 'record funding'?

Despite Abbott's promise for record funding in the 2023 legislative session (and a $33 billion budget surplus), lawmakers only approved about $7.4 billion in new state money for schools over the next biennium. About $52.6 billion in total is allocated for public schools in 2024.

Since 2020, when schools received $48.6 billion, state and local allocations are putting about 8.2% more into public schools.

Of that $7.4 billion in new money, $3.2 billion will cover increasing enrollment at school and $2.4 billion will increase the value of a special property tax that districts can exact, called golden or copper pennies. Both are optional taxes districts can collect on top of their existing tax rate to pay for additional operations needs.

Golden pennies aren't subject to recapture, a state program that collects some revenue from property-wealthy districts and redistributes the money to property-poor districts.

The state funding, according to legislative records, also included:

• $300 million to recurring school safety costs

• $307 million for instructional materials

• $500 million for curriculum

• $60 million to facilities

Abbott's office didn't respond to a Statesman request for comment.

In 2024, the state took on a greater share of covering school funding — from $3,791.07 to $4,851.57 per child in inflation-adjusted dollars — after lawmakers last year approved a $12.6 billion tax cut for Texas property owners. The shift relieved education costs for property taxpayers, but it didn't generate new money for schools.

In general, there is bipartisan support for more school funding, said Rep. Gary VanDeaver, R-New Boston. VanDeaver heads a subgroup of the House Appropriations Committee that focuses on education funding.

"I certainly recognize — and I think a lot of my colleagues recognize — that schools just have much lower buying power than they did four years ago," VanDeaver said.

Though the state's 2024-25 biennial budget set aside almost $5 billion in additional school funding, lawmakers needed to pass legislation to direct its spending. Those proposals became mired in political battles over school choice — Abbott's chief education priority — and thus the money now sits in the budget, useless to districts, VanDeaver said.

Lawmakers last year also sought to increase per-student funding but with the governor's directive to only increase education funding if the state also passed school choice — a proposal that's dead on arrival for Democratic and some rural Republican House members out of concern the measure would syphon money from public schools — neither objective made it through the Legislature.

Meanwhile, many districts this school year adopted deficit budgets to deal with rising inflation and the cost of heightened state expectations, such as school safety, he said.

"We are not funding our schools at the level that we really should be if we expect out of them what we expect," VanDeaver said.

What Texas schools need

The last major flush of state cash for districts came in 2019, when lawmakers passed the sweeping House Bill 3.

The $11.6 billion legislation reduced the maximum tax rate districts can charge residents, increased minimum salaries for teachers and put more money into dual language, college and career readiness and special education programs.

Since then, school administrators say state funding hasn't kept up with needs.

While every little bit helps, districts need significant investment to keep up with runaway inflation, said HD Chambers, executive director of the Texas School Alliance and a former superintendent of Alief schools in southwestern Houston.

"All the things that are impacting personal people's lives — grocery store, filling the car up with gas, life day-to-day stuff you have at your house for you, your family, your kids — school districts are not immune to that," Chambers said.

The public and the state also expect more from districts than they once did to prepare students for college and careers, or to provide mental health support, among other things, he said.

"I don't want people to think we're just clamoring for more money, that more money's going to solve our problems," Chambers said. "The message is the cost to do what our society expects has gotten so much more expensive."

What districts really need is a substantial increase of hundreds of dollars to the basic allotment, the basic per-student building block — which sits at $6,160 — he said.

And that's just the minimum, said Paul Colbert, a former Texas representative from Houston who oversaw public education budgeting. He wrote many of the current school finance laws and is now a public policy consultant.

The basic allotment is only meant to pay for the bare minimum, but, in reality, districts have to educate kids with a variety of needs, which cost money, he said.

"There is basic minimum cost to provide them with a basic education if you have a kid with no special needs, no special cost needs in a district that's the cheapest district in Texas and you want to give them enough of an education just to get by," Colbert said.

District officials get most of the funding they use for programs from the state's basic allotment, said Eduardo Ramos, chief financial officer for the Austin school district.

Increasing the basic allotment would allow schools to increase pay for teachers amid widespread staffing shortages and fund special education, bilingual learning and other essential programs, Ramos said.

Texas schools left making 'tough' budget decisions

Across the state, districts will likely face some tough choices this year and next, Ramos said.

The safety and instructional funding is helpful, but it doesn't tackle the root issue, he said.

"We were very hopeful that there would be a significant impact to public education funding when the state was facing a $33 billion surplus," Ramos said. "It's disappointing that we're seeing no increase to student funding."

The Stateman's Texas public education funding analysis

In its analysis, the Statesman considered only state and local education money.

Schools also get funding from the federal government for special education programs or through grants, among other sources. During the pandemic, the federal government pumped in significantly more funding than usual to help states manage remote schooling and mitigate learning losses due to being absent from the classroom, but most of those special provisions expire this year.

Typically, federal funding is about 5% to 6% of total education spending in Texas. Because it is meant to supplement funding in "high-need, high-cost areas," rather than to supplant basic state funding, it cannot be taken into account in state budgets, Colbert said. It can also be unpredictable.

The Statesman analysis also didn’t consider local revenue that can differ from district to district, including through grant funding, certain state contracts with education vendors, bond-generated spending, money put to teacher retirement or other locally generated money, like tickets sales from football games. Neither federal funds nor these local revenue sources — which can equal or exceed federal funding — are reported in TEA annual summaries of finances.

This article originally appeared on Austin American-Statesman: Texas schools facing lowest inflation-adjusted funding since 2020