Nearly half of that funding will be spent on raises for educators and support staff, such as bus drivers, janitors and librarians. HB 2 also seeks to rework the state’s school finance system by creating new funding allotments for fixed costs and other expenses, which proponents have said could give school districts more spending flexibility.
State lawmakers estimated in May that schools will receive “north of $17,700” per student under the long-negotiated school funding package—up from about $15,503 in the 2022-23 school year, according to Texas Education Agency data.
The funding increase comes as some school Texas districts across Community Impact’s coverage areas grapple with growing budget shortfalls, leading some districts to consider closing campuses, cutting staff and slashing elective courses. HB 2 will take effect Sept. 1.
“Texas is No. 1 in so many categories. Texas should be No. 1 in educating our children,” Abbott said during the bill signing ceremony at Salado Middle School, located in Republican bill author Rep. Brad Buckley’s hometown. “More than anything, this law will help students go from graduation directly into a good-paying job right here in the Lone Star State.”
What you need to know
HB 2 will provide permanent raises for educators and support staff; overhaul how the state funds special education; and set aside money for schools to spend on fixed costs, such as utilities and insurance. The bill also includes funding increases for early learning initiatives, school safety, student career training and educator preparation.
“House Bill 2 is more than just a policy—it is a promise to our teachers,” Temple ISD kindergarten teacher JoMeka Gray said during the June 4 event. “This allows [educators] to focus entirely on teaching without the constant worry of earning a living wage and keeps our most effective teachers in the classroom.”
The $55 basic allotment increase falls short of a $395 boost proposed in an earlier version of the legislation, with some school leaders requesting a roughly $1,300 increase to keep up with inflationary costs.
However, over a dozen school associations and advocacy groups praised lawmakers’ work on HB 2 after the bill was sent to the governor May 29. Education leaders noted the range of initiatives funded by the bill and said it would provide a “lifeline” to cash-strapped schools.
“Texas students deserve the highest quality education that our schools can provide, and that requires significant resources from the state,” the Texas Classroom Teachers Association said in the May 29 statement. “HB 2’s $8.5 billion investment in teachers and schools, much of it flowing directly into classrooms, represents a targeted approach to providing the support and assistance our students and teachers need.”
Before the Texas House gave final approval to HB 2 on May 29, Rep. James Talarico, D-Austin, questioned why lawmakers had not passed “comprehensive” school finance legislation since 2019, when they raised base per-student funding from $5,140 to $6,160.
“For six years, we have been unable or unwilling to provide the real funding needed to stop school closures, stop [budget] cuts and stop teacher layoffs,” Talarico, who voted in favor of HB 2, said.
State senators noted May 22 that HB 2 will restructure portions of Texas’ school finance system. The bill includes $1.3 billion that schools can spend on various fixed costs, such as health insurance, teacher pensions and transportation. Senators said this could reduce districts’ reliance on the basic allotment and give them more spending flexibility.
“Everything is not flowing through a basic allotment anymore,” Sen. Royce West, D-Dallas, said on the Senate floor. “We have different allotments specified for specific purposes.”
During the June 4 event, reporters asked Abbott why Texas did not pass a school funding package during the 2023 legislative session, when lawmakers had a nearly $33 billion budget surplus at their disposal.
“We were dealing with one-off education budgetary issues [during the 2021 and 2023 sessions],” Abbott said. “We had a massive influx of billions upon billions of dollars from the federal government during the time of COVID[-19], and that funding was there to fully fund education. This year, we don’t have that—and that’s why it was necessary that Texas step up this time and make sure we provide funding in a record form.”
Breaking down the bill
HB 2 establishes a $3.7 billion teacher retention allotment, which will be used to provide permanent raises for teachers with at least three years of classroom experience. The legislation includes larger raises for teachers in small school districts, which bill sponsor Sen. Brandon Creighton, R-Conroe, has said will help close a pay gap between urban or suburban and rural teachers.
In districts with 5,000 students or less, teachers with three to four years of experience would receive a $4,000 raise, while those with at least five years of experience would receive an $8,000 boost. In districts with over 5,000 students, educators with three to four years of experience would get a $2,500 raise, and more experienced teachers would earn a $5,000 raise, according to the bill.
“For the first time in Texas history, that pay raise will continue beyond this biennium,” Creighton said in May. “In the past, we've heard those pay raises called ‘stipends’ and ‘bonuses.’ That is not what we have in this legislation.”
School support staff will also receive pay raises under a new $500 million allotment.
The bill also expands the Teacher Incentive Allotment, a program designed to put teachers on the path to a six-figure salary. Educators recognized under the TIA will be eligible to receive up to $36,000 per year on top of their general salary. The current maximum boost is $32,000.
According to previous Community Impact reporting, the 231-page bill also spends:
- $850 million on overhauling special education funding to allocate resources based on students’ individual needs, rather than where they receive services
- $433 million to help young students succeed in reading and math
- $430 million for schools to spend on school safety equipment and initiatives
- $200 million on teacher preparation and certification, including stipends to prospective teachers who complete educator certification programs
