HB 3 Offers Great Potential For A More Equitable School Finance System

After a year’s worth of inquiry and research into Texas’ public school finance system, House Public Education Chair Dan Huberty (R-Houston) filed legislation Tuesday to overhaul the state’s complex and outdated system, ushering in the first step toward transformative, comprehensive school finance reform to benefit our more than 5 million public school students.  

House Bill 3 represents a thorough and thoughtful update to how Texas funds its public schools and mirrors many of the 35 separate recommendations made by the year-long, bipartisan Texas Commission on Public School Finance, as presented in its final report from late last year.  The legislation injects $9 billion in new funding above enrollment growth over the next two years while reducing recapture by $3 billion, a substantial 38% decrease.

HB 3 provides an Early Literacy Allotment with funding sufficient to resource full-day, quality Pre-K for over 250,000 eligible four year olds, a recognition of the importance that early childhood education has on a child’s future. This $780 million commitment is formula-funded through an additional weight for English language learners and low-income students in Grades K-3. Additionally, the funding requires each school district to create an Early Literacy Plan, which will include yearly local school board-established goals and annual progress reviews for each of the district’s major student populations to bring uniform focus on our critical statewide need to improve early reading proficiency.

The legislation also contains meaningful additional funding to help identify and support students with dyslexia, as well as incremental funding for both dual language strategies and an extended school year for elementary grade students who are currently behind. These additional investments, combined with required goals and progress measures, sets Texas on track to better equip our earliest learners and improve our national rank of 45th out of 50 states in early literacy according the Nation’s Report Card.  

Moreover, HB 3 delivers sorely needed updates to better resource Texas’ growing low-income population, which now accounts for 6 out of every 10 students in K-12. The bill’s significant additional investment in compensatory education will take effect through formula increases to the system’s current weight.

HB 3 also raises the minimum salary schedule, a critical factor in recruiting teachers to primarily rural areas, and encourages districts with an optional Effective Educator Allotment of $140 million in the current biennium to invest in locally-developed multiple measure evaluation systems to identify their most effective teachers and pay them higher salaries sooner in their careers. Both strategies will ensure that students have an increasing number of effective teachers remaining in the classroom rather than their opting for higher paying administrative positions or leaving the education field altogether.

“The state of Texas truly has a unique opportunity to transform its public education system by ensuring that every child can read, that every child has an effective educator in the classroom, and that every child believes that a post-secondary education is not only necessary but is accessible to them, is supported and is affordable. HB 3 is a huge step in that direction,” said Todd Williams, Commit CEO and former Texas Commission on Public School Finance member.

By eliminating outdated and inefficient funding components and combining those monies with substantial new dollars, HB 3 increases the per student basic allotment by over 17%, or $890, to $6,030 per student. This surge of funds will add significant resources to districts, allowing them to meaningfully increase teacher and campus staff pay while providing districts flexibility to drive resources where they are needed most. In addition, because recapture formulas are tied to the basic allotment, this increase will simultaneously reduce recapture payments by over $3 billion this biennium and keep more property tax payments locally invested in each district’s school system.

Finally, HB 3 provides much needed tax relief to local taxpayers. Increasing the state yield on Tier II enrichment rates and automatically compressing Tier I tax rates by roughly 4% offers added flexibility for local school boards in future years to raise rates should additional revenues be needed to meet local educational goals.

We note that a critical Commission recommendation, outcomes-based funding, is missing from the bill’s current language. As proposed by the Commission, outcomes-based funding would equitably reward public schools achieving crucial academic benchmarks in both 3rd grade reading and college/career/ military-readiness. These benchmarks could be based on multiple, varied assessments, and most importantly, could allow funding to formulaically more than double in size in future years as our educators wisely invest the resources provided in this legislation. Because this funding centers on the outcomes we expect our schools to achieve rather than only the inputs going into the system, we sincerely hope that subsequent legislative negotiations bring this critical feature back into consideration, both in the 86th Legislature and in future legislative sessions. We are encouraged by Chairman Huberty’s desire for this possibility in the near future, particularly in the area of post-secondary readiness and access of college, career or the military.

The Commit Partnership applauds Chairman Huberty in boldly submitting HB 3 and encourages the House education committee and members of both the full House and Senate to strongly support the numerous key provisions found in this legislation as well as other key components recommended by the Commission, including district goal setting with respect to college and career readiness and access and outcomes based funding that further rewards districts for smart investments made on behalf of Texas’ children. We look forward to Senate legislation that carries forward many of the same priorities to advance outcomes for our 5.4 million Texas students.

“The time is now for Texans to act to invest deeply and thoughtfully in our children and in our state’s future,” Williams said.

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