Texas School Finance: Doing the Math on the State’s Biggest Expenditure
Published January 2019
Texas is seeing a number of problematic trends in school finance. The first is increasing demographic pressure on schools. Texas has one of the nation’s largest and fastest-growing public school enrollment counts — 5.4 million for the 2017-18 school year. The cost of educating such a large population is tremendous, and exacerbated by dramatic and disproportionate growth in the number of higher-needs children.
Yet in the face of these growing costs, under current FSP formulas the state’s contribution to public school funding has remained flat in recent years, with a prolonged shift toward local responsibility.
As we’ve shown, this is a consequence of a system built on local dollars and supplemented by the state. Regardless of tax rates, the state’s share of the FSP, by formula, necessarily drops when property values rise sharply and tax rates stay the same. And that leaves property owners absorbing an increasing tax burden.
With the school finance system we have, these trends are inevitable.
Texas is constitutionally obligated to educate its schoolchildren. As the state’s young population continues to grow, so will the cost of public education, and the gap between local and state responsibility will only widen unless fundamental changes are made to the way Texas funds its public schools.
Texas’ “Byzantine” school finance system, as the state’s Supreme Court called it, is the result of countless compromises and adjustments over decades. The system has fundamental problems. Addressing all of them will be a daunting task. But the math, which we have focused on here, is hard to deny. FN