Texas School Districts Slam the Senate’s School Finance Plan

Midway ISD, a school district with around 9,000 students just outside Waco, is staring down a growing budget deficit that Superintendent Chris Allen hoped would shrink with the new state funding for public schools provided under House Bill 2, the school finance package that the Texas House passed in April. That was until Lieutenant Governor Dan Patrick unveiled the Senate’s substantially different counter-proposal last week. 

Senator Brandon Creighton opened the education committee’s public hearing on the proposal Thursday morning by emphasizing that the Senate’s measure would infuse nearly $8 billion of new funding into the public school system. But instead of making a significant increase to the basic allotment—the baseline amount that a district gets per student—the Senate version would instead earmark investments for teacher pay, teacher preparation and certification, special education, and school safety.  

The Senate’s plan sets aside $4.2 billion for teacher pay raises. There are more generous increases—between $5,000 and $10,000—for teachers with at least three years of experience in small rural school districts, while those teachers in districts with more than 5,000 students, the state’s major urban and suburban schools, would get raises of just half that range. The House’s $7.8-billion plan directs 40 percent of the basic allotment increase to pay for school employees, including counselors, nurses, and librarians, which the Senate nixed. The Senate’s plan also allocates $1.3 billion for additional special education spending, while the House caps this at $800 million. Under both plans, charter schools would receive a big boost, but the Senate plan would give charter schools a bigger payout with $225 million in new funding for charter school facility improvements. The House plan includes a funding increase for bilingual education, fine arts, and full-day funding for pre-K, though the Senate nixes those provisions. 

But the biggest difference between the two bills is the increase to the basic allotment. The House version would increase the basic allotment by $395, to $6,160 per student, while the Senate proposes an increase of just $55, to be funded by local taxpayers through the “golden pennies mechanism.” That has public education advocates and Democrats raising the alarm about this significantly reduced hike, which was revealed in the final stretch of the session and reportedly after weeks of secret negotiations between the Senate and House leaders.  

Soon after the details of the Senate version were revealed, House Speaker Dustin Burrows—who has repeatedly said that HB 2 is his top priority this session—lauded Patrick’s Senate proposal and urged critics of the reduced allotment increase to not focus on “just one number” in the package. 

But school district superintendents are saying that the value of this “one number” could, under the House proposal, keep the lights on in their schools and prevent further staff layoffs, cuts to school programs, or closures of schools. Not so with the Senate proposal.  

“A record amount of money with a very narrow scope will produce this continuation of deficit budgets across Texas. I promise you that,” Bobby Ott, superintendent of Temple ISD in Central Texas, said in a video statement. 

Ott said that his district would receive only $432,000 new funding from the $55 increase to the basic allotment, just enough to cover employer retirement contributions and not enough to cover raises for first and second year teachers and non-teaching staff, which the Senate plan excludes.

Allen told the Texas Observer that with the House’s proposed allotment hike, Midway ISD would get $4.5 million in new funding and its deficit would be $2.5 million next school year. Under the Senate’s allotment increase, he estimated Midway would get just $500,000 in new funding and its deficit would deepen to $5 million.

Allen said in a video statement that the Senate’s offering of just $55 more to the basic allotment is like “your house being on fire and the fire department showing up with a 12 ounce cup of water, throwing it at your house and saying, ‘See, look how much good we’ve done.’” He urged district stakeholders to contact their state legislators. 

Texas lawmakers have not increased the $6,160 basic allotment since 2019, and lawmakers and school leaders have testified that more than a $1,300 increase would be needed to keep pace with inflation. 

District leaders, faced with rising costs, flat state funding, and enrollment losses, have long warned that they will be forced to continue making drastic cuts if the basic allotment does not increase. The House’s school finance bill includes automatic increases to the basic allotment every biennium, tied to property values. While it mandates 40 percent of the basic allotment increases be used to fund pay raises, school districts would have flexibility to spend the remaining amount as they see fit. 

This includes many skyrocketing expenses that the Senate plan doesn’t account for, district leaders said. 

Allen told the Observer that Midway ISD has already cut instructional support for new teachers, increased class sizes, and increased property taxes on local residents to maintain school operations. If the basic allotment does not increase, “everything’s on the table,” Allen said. “What it will do is cause us to have to run deficit budgets for a little while. … At some point you have to get back to a balance, or you can’t keep the doors open.” 

Ott wrote on X: “If you have a child in public schools that is not in special education, if you are a first or second year teacher, or an employee that is not a teacher – HB2 CSB has ignored your existence for funding. Only experienced teachers and [special ed] students win.”

Waco ISD Superintendent Tiffany Spicer told the Waco Tribune, “It looks like a historic investment but actually is not. We’re getting short-changed.” 25 News KXXV reported the district’s transportation costs alone rose from $3.7 million to $5 million in Waco ISD over one school year. 

Northwest ISD, a 30,000-student district near Fort Worth, said in a statement that even the House proposal only provided enough to cover 30 percent of funding needed to “combat increased fixed costs and unfunded mandates from the state since 2019,” while the Senate version would cover just 4 percent. 

The district blasted the Senate for “wasted funding” for items “districts are not requesting.” According to several superintendents, that includes an increase to the state’s merit-based teacher pay system, which will affect only 25 percent of teachers, literacy screeners for preschool students instead of full-day funding for preschool students, money for third-party teacher preparation programs, and funding for charter school facility improvements. 

A March survey conducted by the Texas Association of School Boards found that 63 percent of the 190 school districts that responded said they expected to end the 2025 school year in a budget deficit, compared to 42 percent last school year. More than 80 percent reported plans to make cuts by cutting staff, programs, or shutting down schools next year. 

Earlier this week, Fort Worth ISD released a list of 18 schools it is proposing to close. In the Dallas-Fort Worth suburbs, Richardson, Carrollton-Farmers Branch, Plano, and Lewisville ISDs have or are planning to close multiple schools. Lewisville ISD said in social media posts that without a basic allotment increase, class time, foreign language classes, and tutoring services would also be cut. In the San Antonio area, various school districts have closed 25 schools since 2023. Near Houston, Aldine ISD recently voted to close six more schools, adding those to the three schools they closed last year; and Spring ISD is weighing school closures amid a $13-million budget deficit.  

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The Senate’s late reveal of its major overhaul of the House’s school finance package leaves little time to air out or resolve policy disputes.  The Senate has to pass its version of HB 2 by May 28. Then the House can either vote to  accept the Senate’s version or it will go to conference committee and the House and Senate will both have to approve the final version before session ends on June 2.  Governor Greg Abbott had promised to fully fund public schools along with school vouchers, and the House deployed a “two-step” strategy that tethered passage of school finance to vouchers when the chamber approved both last month. While the Senate quickly approved the House voucher bill and Abbott signed it into law in early May, the public school funding bill stalled.

Creighton has said that time was spent carefully negotiating alterations to the bill. But Democrats say this was a blatant bait-and-switch. “This was supposed to be the Texas Two-Step, but right now I’m just seeing one step: defunding our schools with a voucher scam,” State Representative James Talarico said in a statement. “Greg Abbott took new per-student funding hostage for his voucher scam. Now, after getting his way on vouchers, he’s killing the hostage anyway.” 

District leaders are still hoping that lawmakers will listen to what they say their schools need. 

At least the House school funding bill, said Midway Superintendent Allen, “Says we’re going to trust you with the money, but we’re going to put some parameters around it. That we can work with.”