The Upsides and Downsides of School Funding

In the 87th session that ended May 31, the Texas Legislature passed Senate Bill 1, the General Appropriations Act, that comprises the next biennial budget for Fiscal Years 2022 and 2023. SB 1 includes $51.8 billion for the Foundation School Program, the primary source of state funding for Texas school districts. This is a 5.6% increase over the current biennium.

It includes the state’s commitment to the public education investments made by House Bill 3 in 2019 and funding for projected enrollment growth, in addition to an increase in the state’s contribution rate to the Teacher Retirement System from the current 7.5% to 8% by 2023. While HB 3 was a significant step forward in public education funding with investments in teacher pay raises, full-day pre-kindergarten, and additional dollars for low-income students, Texas remains in the bottom 10 states for per-student spending at $4,000 behind the national average.¹

*Fund Amounts are in Millions | Source: Legislative Budget Board

Contained within Senate Bill 1 is a hard fought TCTA provision to specify that the budget includes funds sufficient to sustain across the board salary increases from HB 3, and to express the legislature’s intent that at a minimum, districts should continue these salary increases. We included similar language in statute in House Bill 1525.

TCTA was also able to include a budget rider that, for the first time, provides transparency regarding teacher designations under the Teacher Incentive Allotment program. It requires the Texas Education Agency to provide the number of teachers anticipated to receive each level of TIA designation (recognized, exemplary and master) under the program, as well as the amount of funding allocated for the associated incentives. This new data indicates that only 5% of teachers across the state will be included in the program by the end of 2023, proving it to be an ineffective way to ensure salary increases to teachers. The TIA not only leaves out the vast majority of deserving Texas teachers and includes unfair hurdles such as student growth measures, but the funding for the program is also not required to go directly to the designated teacher. Rather, the funding goes to the teacher’s school district, with the condition that the district must use at least 90% of the funds for teacher compensation on the campus where the designated teacher works.

New Federal Funds

Much of the conversation among public education advocates and legislators was around the pandemic relief federal funds made available to Texas. There were questions as to whether the state would accept the funds and if so, whether they would be directed to schools as supplemental dollars or replace the state’s obligation. In the end, TCTA joined public education groups to secure the investment of these federal funds into our public schools, a noteworthy success of the session that will result in billions of federal dollars flowing to your schools.

• For each of the three rounds of federal funds, 90% is intended to go to school districts and 10% can be used by the Texas Education Agency.
• The first round is from the CARES Act that was signed into law in March 2020. The total allocation of $1.3 billion was used to supplant state dollars for hold harmless funding based on an assumption of attendance. This was due to enrollment declines because of COVID-19 disruptions. The only other state to utilize these funds to supplant its state obligation was New York.
• The total allocation to Texas from the second round made available by the CRRSA Act that was signed into law in December of 2020 is $5.5 billion. Funds will be provided to school districts to ensure districts maintain funding levels despite enrollment declines in the 2020-2021 school year in addition to supplemental needs, such as to address learning loss, prepare schools for reopening, and improve air quality. Texas leaders are distributing these federal dollars with some additional qualifications. Districts that had enrollment declines will get hold-harmless funds, but their federal allocation will be reduced by an equal amount. Nevertheless, roughly $4 billion of the $5 billion available to flow to school districts will do so soon, which is a significant improvement over the CARES Act funds. TEA has released information on each school district’s allocation of CRRSA funds so you can find out what your school district can expect to receive.
• The final round of federal pandemic relief is from the American Rescue Plan and was signed into law in March 2021. The total allocation to Texas is $12.4 billion with $11.2 billion (90% intended for districts) as supplemental funding that will not be supplanted by the state. After seeing that Texas had fully replaced state dollars with federal dollars in the first round, our friends in Congress put in safeguards to require that the ARP dollars flow to schools through the Title 1 formula based on economically disadvantaged student data that generally guides federal education dollars. This made it nearly impossible for Texas to supplant this round.
  These funds will help meet needs arising from the pandemic, including reopening schools safely, sustaining safe operation, and addressing students’ social, emotional, mental health, and academic needs. At least 20% must be used for learning loss in response to these students’ needs and must address the disproportionate impact on underrepresented student subgroups. The remaining funds may be used for a wide range of activities, including hiring new staff and avoiding layoffs. State legislators and leaders have emphasized these are one-time funds and districts should not anticipate that ongoing, replacement funds will be provided at either the federal or state level. The funds will be available through September 2024. TEA has also released information on each school district’s allocation of these funds so you can learn what your school district can expect to receive.

TEA recently announced that a small number of school systems have more direct COVID-19 expenses or projected costs for learning loss recovery than they will receive under CRRSA and ARP formula funding, therefore these districts will be eligible to apply for supplemental funding from the 10% of funds reserved for TEA.

How Can I Get Involved?

There is a requirement for each district to get stakeholder input on its plan for uses of the ARP funds and teachers are specifically named among the stakeholders. The district plan must be posted to its website within 30 days of receiving its Notice of Grant award and districts must apply to TEA by July 27. With the deadline fast approaching, you may want to check with your district to find out how you will be able to provide input and influence its plan. This is a unique opportunity for additional pay and classroom supports. We are seeing several districts provide pay increases to teachers that are made possible by the federal funds.

Allowable uses for ARP funds include: professional development, pay for extended instructional time, additional staff for reduced class sizes, smaller group instruction, recruitment and retention, enrichment programs, and mental and behavioral health supports. Visit TEA’s FAQs document to find out all the allowable uses and more about the federal pandemic relief funds so that you may make recommendations for your district’s plan for use of funds.

¹ SOURCE: Quality Counts 2020 (Education Week) Educational Opportunities and Performance in Texas, January 21, 2020, https://www.edweek.org/policy-politics/educational-opportunities-and-performance-in-the-united-states/2020/01.