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Here's how Texas funds public schools


students walking to school

While saving money is not the driving reason behind rightsizing, the process could end up allowing the San Antonio Independent School District to reallocate funds to provide a better education for every student in the district.


SAISD’s goal with rightsizing is to improve educational outcomes for students by providing equitable services across all schools. If the Board of Trustees approves the rightsizing recommendation package on Nov. 13, the school district will be able to align its spending to the number of students in the district instead of the number of buildings, said Chief Financial Officer Dottie Carreon.

“Rightsizing is an attempt to correct some of the inequities that we have within our schools right now, and by making sure that we don’t have overly expensive schools on a per pupil basis, we will be able to redeploy some of those resources to the larger schools that were basically missing those funds. It should produce a more efficient model to where we’re not spending our money on maintaining school buildings instead of educating students,” she said. “If we’re operating far too many buildings and maintaining them, then we’re using up the revenue for each student that should be spent on their education.”

Currently, SAISD redirects some money from schools with a larger student population and sends those funds to schools with smaller student populations. This helps the smaller schools because they are more expensive to operate. Every school, regardless of how many students go there, has the same administrative and operating costs, while schools with more students generate more money.

That creates inequities because not every student has access to the same resources. With rightsizing, SAISD could more equitably fund schools so that every student receives the same benefits, regardless of their school.

So how does Texas fund public schools?

Where do public schools get funds?
In Texas, public schools receive money from two primary sources: local property taxes and state funds.


The state determines how much money school districts receive from both local property taxes and the state, using a formula called the Foundation School Program Formula. This formula calculates how much money school districts need to operate schools, including salaries and supplies.

School districts receive $6,160 for each student in the district, but they get additional funds for students in special education, bilingual education, career and technical education, and gifted and talented programs. Districts may receive more funds for other programs, such as services for students at risk of dropping out of school. The state then uses the Foundation School Program Formula to determine how much funding each school district needs to serve all its students, based primarily on the number of students in the district.

The amount of property wealth in a school district determines how much of its budget is covered by local taxpayers. The more property taxes increase in an area, the more of a school district’s budget is covered by local property taxes instead of the state. The state makes up the difference between the amount the state determines the district will receive and the share of that amount covered by local property taxes.


Why don’t schools get more money if property taxes keep going up?
Property owners have seen a significant increase in their property taxes in recent years, but SAISD does not receive all the money from those tax payments. School districts do not get more money unless state legislators vote to increase the amount of funds that go to schools or if their enrollment increases significantly.

Each time local tax collections increase, the amount of funds SAISD gets from the state decreases, but the overall amount the school district receives does not change. All an increase in property tax collections means is that the state gets to pay less for public schools.


How do school districts use funds?
School district budgets are split into two categories: maintenance & operations and interest & sinking.


Maintenance & operations funds go toward covering the basic operations of public schools, such as salaries for workers, supplies and regular maintenance of facilities. Local property taxes and state funds make up this category of money.

Interest & sinking funds go toward covering the costs associated with paying off debt school districts incur from bonds issued for the construction of new facilities or renovating existing buildings. School districts do not receive revenue from the state to build new facilities, so they must go to voters to pass a bond election to pay for new buildings and upgrades to existing ones. Money from voter-approved bonds go into this account.

What do local property taxes go toward in the school district’s budget?
A school district’s tax rate is split into two categories: maintenance & operations and interest & sinking.


For the 2023-2024 school year, SAISD’s tax rate is $1.20782 per $100 of taxable property value. That tax rate is made up of two rates:

  • M&O - $0.75755
  • I&S - $0.45027

The M&O rate funds the district’s operations, such as salaries and supplies, and the I&S rate funds the district’s debt service payments, which are used to pay off the bonds voters have approved.

How does Texas compare to how other states fund schools?
Texas ranks 40th in the country for per student spending on public education at $11,005 per student, according to 2021 data from the U.S. Census Bureau. That spending includes revenue from federal, state and local sources. The national average is $14,347.

These are the top 10 states, according to their per student spending:
1. New York – $26,571
2. District of Columbia – $24,535
3. Vermont – $23,586
4. Connecticut – $22,769
5. New Jersey – $22,160
6. Massachusetts – $20,376
7. Alaska – $19,540
8. New Hampshire – $19,443
9. Rhode Island – $18,366
10. Illinois – $18,316

Texas ranks in the bottom 10 nationwide in per-student funding for public education, paying out almost $4,000 below the national average. These figures often change because of new laws that are passed by Congress and the Texas Legislature, changes in enrollment and other factors. 

In Texas, state lawmakers have not voted to increase funding for public schools since 2019, and inflation has caused prices to rise significantly since then. Until state lawmakers increase funding for public education, school districts will continue to make tough decisions on where to allocate funds. That impacts teacher pay, campus safety, food and transportation services, and much more.

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