Documents & Tools
The following handouts provide an in-depth look at the Texas public school finance system and its impact on school districts. These fact sheets should be essential reading for anyone seeking more information about how Texas funds public education.
For any followup information, please do not hesitate to contact the Texas School Coalition staff.
Documents & Tools
Some people have recently tried to downplay the impact of recapture on schools and taxpayers by saying the State and the federal government have already made sizable investments to help our schools. These points are recommended to provide some important context and facts.
House Bill 1525 is billed as the “clean up” measure that addresses unintended consequences of school finance reforms passed in 2019. However, the Senate version of HB 1525 goes much further and could lead to funding reductions for many school districts. It would also severely limit districts’ ability to use federal education funds as intended.
The House Bill 3 school finance legislation passed in 2019 invested billions of new dollars in public education, but the new law’s changes to funding formulas left some districts with less funding. The Legislature put Formula Transition Grants in place to ensure districts received a minimum increase. FTGs make the law adopted in 2019 better than the law we had before; without it (or with it at a reduced amount), that isn’t the case.
On April 28, 2021, state leaders announced that the entirety of the $11.2 billion from the LEA allocation under ESSER III would flow to Texas schools. This post is intended to focus specifically on what district leaders need to know about the ESSER III allocation for school districts.
In simple terms, fund balance is the difference between assets and liabilities in a governmental fund as of the close of the fiscal year. School districts use their fund balances to responsibly manage cash flow — especially in districts that pay recapture and cannot lean on regular state funding.
Rather than trying to determine how to distribute federal dollars to the schools that need them, Texas is trying to withhold them. Some 40 states have started distributing dollars to their schools, but Texas has not.
In order to meet the state’s future workforce needs and give all Texas children the opportunity to succeed, it is critical that the state continue to invest in public education.
The state’s economic outlook has worsened considerably over the last year, which affects public education’s fiscal outlook going forward.
Don’t be fooled. School district fund balances are an important cash management tool and are not the same as the State’s Rainy Day Fund.