Preliminary Look at Public School Funding in the State Budget

In the state budget deal for 2014-15 that’s still a few pieces short of being finalized by the 83rd Legislature, public education would see a 7 percent biennial increase, from $52 billion in 2012-13 to $56 billion in 2014-15.  General Revenue support for public education would rise by 8 percent in SB 1, or 8.5 percent with additional dollars in another appropriations bill (HB 1025). Still, even with robust assumptions about increases in local support for schools, real spending per student would continue to be considerably below the pre-recession levels seen from 2002 to 2008.
Of total public education spending, the lion’s share, $40 billion, would be provided through school finance formulas known as the Foundation School Program, or as “entitlement” funding. FSP spending in the state budget would grow by 6.7% compared to the 2012-13 budget. Another $3.9 billion would support the Teacher Retirement System (up 5% from 2012-13). Outside the Foundation School Program, most grants to school districts, such as for prekindergarten expansion, would remain at the lower levels they were cut to by the 2011 legislature.
HB 1025 would provide $202 million (about $21 annually per student in average daily attendance) in additional support for the Foundation School Program, but the funding was made contingent by the Senate on passage of both SJR 1 (constitutional creation of a fund for the state water plan) and HB 7 (System Benefit Fund fee rebates). The House’s rejection of Senate changes to HB 1025 led to one last impasse in the complicated 2013 budget process, leaving $202 million in school funding and potentially the entire budget deal unresolved as of Friday afternoon. Around 7 PM Friday evening, the HB 1025 conferees were rumored to have cut the tie between HB 1025 and HB 7, but the Governor raised objections to another part of HB 1025 that freed up General Revenue for budget-writers’ other priorities. Stay tuned for updates.
The chart below shows what SB 1 and HB 1025 would provide for the Foundation School Program, grants to school districts, and other state and federal education dollars appropriated to the Texas Education Agency, along with estimated local property taxes, after adjusting for student growth and inflation. SB 1 assumes that local property tax support for schools will rise by 4.77 percent in tax year 2013 (affecting state fiscal 2014 and 2015) and 4.03 percent in tax year 2014 (state fiscal 2015 and 2016).

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