How does public school funding work in Texas – and how would property tax relief affect it?
Texas homeowners have complained about rising property tax for years — and leaders in the Texas legislature say addressing property taxes is a top priority. But since this revenue accounts for a huge chunk of Texas public school funding, parents and educators are wondering how changes could affect schools.
Students file out of the Dallas Independent School District’s Solar Preparatory School for Boys on a cool Friday afternoon, rushing to greet their waiting parents.
Megan Garey, whose 9-year-old son, Grayson, is a third-grader at Solar, says that even though property taxes keep going up, she doesn’t see it reflected in public schools.
“That funding does not seem to be going towards our schools and our teachers and the materials that they need,” Garey said. “Teachers are always buying things out of their own pocket.”
Other parents, like Bonnie Rodela, are nervous that cutting property taxes could mean less money for schools.
“Our children are where they're going to take the cuts, you know, to give that back to our homeowners,” Rodela said. “So, it definitely leaves me wary."
Leaders in the Texas Legislature – who say addressing property taxes is a top priority – say that’s not the case. But how can that be? First, let’s look at how Texas funds public schools.
In 2019, state lawmakers passed education reforms, setting a new basic allotment of about $6,000 – meaning districts are entitled to at least that much per student. Texas also chips in extra for kids with specific needs, like special education and low-income students.
All of those factors help determine what’s called the entitlement, said Bob Popinski, senior director of policy for Raise Your Hand Texas, a nonprofit organization that advocates for policy solutions that support Texas public schools. On average, the entitlement is $10,000, plus or minus a couple thousand, depending on the district and student type, he said.
That’s the simplified version of a complex formula. Once it’s determined how much districts will receive, property tax revenue is used to cover as much as possible; the state chips in the rest.
Some wealthy districts with high property taxes – like the Austin Independent School District, where Popinski’s kids attend school – earn more than the entitlement. That extra money is then recaptured by the state and put back into its education fund, he said.
The more recapture funds the state gets, the less revenue they pull from outside sources like gas and sales taxes. So even when property taxes go up, the amount schools receive doesn’t – schools either get less state aid or pay more recapture, Popinski said.
But that did change slightly in 2019. Now, any property value increase above 2.5% automatically results in a cut to district’s public school tax rate, said Dale Craymer, who leads the Texas Taxpayers and Research Association.
“That's sort of eliminated this cycle where rising values automatically lead to a reduction in state aid,” Craymer said. “And generally the state share of funding since 2019 has been roughly constant.”
Still, Craymer thinks schools here are underfunded.
“Obviously, inflation has hurt the operating budgets of every school district,” he said. “The formulas don't provide enough aid so that teachers are paid what they need to be paid in the current competitive market.”
So how does Texas increase education funding?
Popinski says his group wants the basic allotment raised – and that it would need to increase by about $1,000 just to keep up with inflation.
“You keep up with inflation, which is in double digits since 2019. You provide a salary increase for teachers. And you also reduce recapture,” he said.
This legislative session, lawmakers have introduced numerous bills aimed at increasing school funding. And with a state budget surplus of nearly $33 billion, Popinksi says there is no time like the present.
“It's time to actually use some of that to invest back in our public schools,” he said.
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