The article below is the first in a series designed to give readers insight into the school finance system in Texas. School finance is complicated. But it matters because it affects everything: student learning, teacher pay, school facilities, security, school buses, computers, career and technical opportunities, internet access, sports, fine arts and on and on and on. Ultimately, it affects the future of Texas.
Each article in the series will bite off a small piece of school finance and attempt to give readers a basic understanding of the system in Texas and Arlington ISD. Check back each Wednesday for a new article.
Texas School Finance 101
The 89th Texas Legislative Session is now about two months in, and education is a major theme. In the last legislative session in 2023, 1,294 bills related to public education were filed. That number has already been passed this time around.
By the time the legislative session is over, there may be some changes to school finance in Texas. But don’t expect it to get any less confusing.
That’s because school finance in Texas is complicated.
Need proof?
The last major overhaul to the Texas school funding system came in 2019. The Texas legislature is responsible for the school finance system and passed House Bill 3 that year, a bill that introduced major changes. That bill was 306 pages.
There are long formulas used to determine how much money a school district gets each year. While funding is based primarily on the number of students who attend schools in the district, it’s not really that simple. There are several formulas that factor in all kinds of considerations, like special education, career and technical education and a whole lot more. When the Texas Education Agency (TEA) calculates how much revenue Arlington ISD is entitled to, it uses a document of data and equations that is 78 pages long.
Even if you can get your head around all of that, it’s still very difficult for school districts to set their budgets. They must make all kinds of projections and then hope those projections end up being correct. When Arlington ISD adopts its budget in June for the upcoming year – the fiscal year starts July 1 – it doesn’t know for sure how many students will show up to school in August. That’s a big deal because funding is based on attendance.
So, the district makes an educated guess at attendance, adopts the budget and starts spending money right away on teachers, facilities, books, security and on and on. And that’s all before any money comes to the district to pay for those expenses. Districts won’t start receiving any money from the state until September, and the majority of tax revenue doesn’t start coming until December and January. So, the district must rely on its savings to cover costs in the meantime.
And throughout the whole year, the district really doesn’t know how much money it’s going to receive in revenue until it’s over. Remember that 78-page document of data. TEA constantly tweaks this “Summary of Finances” during the year with updated numbers. So far, for the 2023-2024 school year, TEA has made 33 preliminary versions of that document and 7 near final versions. The final version has not yet been released. That means Arlington ISD did not know the exact amount of revenue it could count on for the 2023-2024 school year until well into the 2024-2025 school year.
So, in summary, school finance is complicated.
But let’s break it down. Come back next week for an article that explains where school revenue comes from. And visit Arlington ISD’s legislative webpage to read the district’s legislative priorities for the 89th Texas Legislative Session.