Answer Key answers a significant query concerning education and Greater Houston schools every week in an effort to assist families. Please use the form at the end of this article or send an email to [email protected] with any questions you would want us to address.
This week’s query:
How are Texas public schools funded? And how is it decided how much money they get?
Residents may become agitated over their property taxes, as demonstrated by the recent elections in the Alief and Spring ISDs. Some locals questioned why local municipalities were being forced to pay for that when the state had a multibillion-dollar surplus when those districts attempted to raise their property tax rates.
In Texas, funding for public education is complex and differs from district to district. This is a brief summary of how tens of billions of dollars are allocated to public schools annually.
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How do school districts get funded, and where does the money come from?
The precise method by which Texas school districts are financed is difficult to describe. Numerous factors affect how much money each district receives, but the largest ones are the number of pupils enrolled, the size of the local tax base, and financing formulae established by state legislators.
To put it simply, three buckets provide almost all of the funding:
- Local property tax revenue, which is determined the value of properties in a district and a tax rate set by each school board.
- State funds that come from numerous state taxes, including Texas sales tax.
- Federal taxpayer funds, which largely help cover the costs of providing meals to kids and giving support to low-income children and students with disabilities.
About $67 billion was provided to schools in 2022–2023 from all three sources to cover staff salaries, building upkeep, transportation, and a host of other expenses associated with operating schools.
In order to cover the costs of voter-approved school bonds, which essentially let districts borrow money to pay for costly one-time projects, new school construction and renovation, and the purchase of new technology, independent school districts also collected over $10 billion in local property taxes. (Charter schools do not receive bonds from municipal property taxes.)
Do all Texas schools receive the same amount of money?
No. Some districts can still receive thousands of dollars more per student than others, despite Texas lawmakers’ efforts to balance out funding sources so that no district is noticeably better or worse off than any other.
Compared to lower-income districts, school districts with greater tax bases could receive a reduced share of state money. For instance, in 2022–2023, local property taxes provided around 85% of Houston ISD’s operating funds, with the remaining 11% coming from state and federal grants. In contrast, Aldine ISD received 4 percent of its operational budget from federal funds, 39 percent from local taxes, and 54 percent from state revenue.
Because more state and federal funds go to districts that serve lower-income pupils, districts may still see rather huge budget disparities even under this arrangement.
In 2022–2023, lower-income districts like Aldine, Alief, and Pasadena earned roughly $14,000 to $15,500 per student, while higher-income districts like Conroe and Fort Bend ISDs earned little more than $10,000.
How do local property taxes fund public education?
Each school board determines how much local cash it receives by voting annually on a tax rate. Each district has a different rate. HISD has the lowest tax rate, at $0.87 per $100 of taxable value, while Pasadena ISD has the highest, at $1.23 per $100 of taxable value.
The tax rate is established by school boards, but in recent years, voters and state legislators have had less influence over it, so limiting the amount of money that can be collected via property taxes. In the event that property values unexpectedly increase, districts are also required by a 2019 state law to reduce citizens’ tax rates—a procedure called as compression.
Residents of the district still have the option to elect to cut their tax rates through a voter-approved tax rate election or to marginally surpass the de facto cap. Residents of Spring ISD opposed a higher rate in November, while voters in Alief ISD approved it.
What state funding do public schools receive?
State financing for school districts is distributed through a variety of methods, but the primary one is the basic student allotment, which provides a fixed sum of money to each student enrolled in the district.
A district’s average daily attendance, not its overall enrollment, determines how much per-student funding it receives. Because of this, districts with greater absence rates can receive less funding than those with high attendance rates.
The state’s basic student allotment has been $6,160 since 2019. The Texas Legislature has come under fire from numerous school board members and superintendents for failing to raise the basic student allotment to keep up with inflation.
Governor Greg Abbott linked more school spending to a contentious private school voucher scheme that failed to pass during the previous legislative session. Although the voucher idea has a better chance of passing following last year’s elections, he is still anticipated to do so during the 2025 session.
What is recapture, and how does it affect public school funding?
In a process called as recapture, the Texas Legislature requires school districts with greater tax bases in comparison to the number of students enrolled to surrender the state a portion of their local property tax revenue. The state then redistributes money to other public schools throughout Texas.
Recapture, sometimes referred to as the Robin Hood plan, aims to close the budget gap between districts with more resources and those with less. Richer districts, on the other hand, contend that they ought to keep their money and that the state ought to pay more for less rich areas.
Nearly 200 of the 1,200 districts in the state are expected to pay roughly $2.9 billion in recapture in 2024, according to the Texas Education Agency. The largest bills in the Houston region are for Galveston ISD ($29 million) and La Porte ISD ($39 million).
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Answer Key: How are Texas public schools funded? And do they get equal money?
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