EDUCATION FUNDING The Rest of the Story II

By Colonel Terry M. Wilson, US Army (Retired) Representative for TX House District 20

Last month, I gave a broad overview of the successes of the 89th Legislature and promised that I would come back with more details on each major area. As students and teachers return to the classroom this month, they do so after the most significant investment in public education since major cuts were made in 2011. Those cuts placed school districts in a tough financial position, one that legislators promised to rectify in the 89th session. In June, the 89th Texas Legislature wrapped up its regular session, closing out months of hardfought deliberations and negotiations, and delivered a historic win for public education in Texas, especially for our teachers, with House Bill 2 (HB2).

Historic Investment

House Bill 2 puts $8.5 billion new dollars into public education, raising the state’s annual average investment to $17,000 per student. By delivering nearly double the increase that failed to pass two years ago, HB 2 sets a record for the largest new dedication of funds into public education in Texas history.

Of that $8.5 billion, $4.2 billion has been set aside to fix issues with the teacher pay scale. While Texas has one of the best pay rates for new teachers, up until now, that pay scale has stayed relatively flat over their career. As a result, Texas schools would often lose teachers and non-administrative staff, like food-service workers and custodial staff, with 3 or more years of experience to other states or private schools who offered a competitive pay increase over time.

Retention And Incentives

The fix for these pay-scale issues came in three parts.

First, there will be an across-the-board pay increase for every eligible teacher to maintain a strong baseline of educators. Teachers become eligible after three years of experience, and that increase more than doubles once they complete five years of teaching experience.

Second, HB 2 provides targeted pay raises to support retention of teachers in at-risk rural and urban areas so our schools remain competitive. Combining these first two levels, a teacher in a rural school with five or more years of experience could see an increase of up to $8,000 in annual income.

Third, HB 2 expands the performance-based Teacher Incentive Allotment so more teachers who meet the performance goals will receive the pay increases they have earned and raises the ceiling for those incentives so top-performing teachers are more substantively rewarded. The legislature also took the extra step to make sure Texas covers the increases in their pension contributions the raises would otherwise require.

To make sure our teachers have every possible tool to achieve their performance-based incentives, HB2 also provides $187 million for teacher preparation and certification programs. These funds are provided directly to districts to make sure the pipeline of certified, qualified teachers continues to grow in every corner of Texas.

HB 2 invests in “grow your own” teacher programs to help communities recruit and prepare local talent, pays student teachers for in-classroom training, and waives certification exam fees for bilingual and special education teachers—two areas in which demand continues to outpace supply.

The bill also introduces a $3,000 mentorship stipend for experienced teachers who agree to guide new educators through their first year in the classroom, fostering both support and retention from day one.

FOUNDATIONS FOR YOUNG LEARNERS

HB 2 doesn’t just address staffing—it’s a comprehensive overhaul of how we support students from their earliest years through graduation. The bill fully funds full-day pre-K and provides $448 million for early learning programs, including free high-quality literacy screenings and interventions to ensure children are reading at grade level by the end of third grade. It also creates new math training programs for K-3 teachers to boost student numeracy, tackling both ends of the critical early learning equation: reading and math.

SPECIAL EDUCATION REFORM

For students with special needs, HB 2 delivers a long-overdue overhaul of our special education system, devoting more than $830 million to improving access, resources, and services. For the first time, the state will also fund $1,000 reimbursements for student evaluations, removing financial barriers that too often delay diagnosis and support.

BALANCED RELIEF

Support for small and mid-sized districts is also a key part of the bill. HB 2 includes $318 million specifically to help these schools address rising operational costs and remain competitive, particularly as inflation and insurance premiums squeeze local budgets. Another $100 million is allocated to help offset regional insurance spikes that have strained district resources.

Speaking of costs, HB 2 introduces a new Allotment for Basic Costs—$1.2 billion to help districts with growing expenses like utilities, Teacher Retirement System (TRS) contributions linked to teacher raises, and other operational pressures. And in a groundbreaking move, the bill ties the Basic Allotment to growth in property values, creating an automatic mechanism for future increases in school funding, so districts aren’t left waiting years for the Legislature to act.

In addition, HB 2 puts serious dollars behind school safety, with $430 million in funding to help campuses comply with new safety standards and ensure students and staff have a secure environment in which to teach and learn.

CHARTER SUPPORT

Charter schools will also benefit from $200 million for facilities funding, helping to close longstanding infrastructure gaps so that more operational dollars can be directed to students and classrooms rather than buildings and leases. The bill also rewards innovation and time-on-task. Schools participating in the Additional Days School Year program will see a 50 percent funding increase, encouraging extended instruction where it’s most needed to close achievement gaps and improve outcomes.

LIFE AFTER GRADUATION

And as our students prepare for life beyond graduation, HB 2 strengthens Career and Technical Education (CTE) pathways by investing $153 million to expand access to programs that prepare students for high-wage jobs and dual-credit opportunities. This investment is particularly impactful in rural areas, where access to such programs has often been limited. You will hear more about CTE and dual credit in future articles on what the 89th Texas Legislature did for higher education.

House Bill 2 is more than just a funding bill—it’s a transformational investment in Texas public education. It addresses compensation, recruitment, curriculum, special education, school safety, early learning, and workforce readiness. By raising the state’s per-student investment to $17,000, providing record-setting funding increases, and delivering targeted solutions to long-standing problems, HB 2 marks a turning point in how Texas supports its students and educators. Texas is growing—fast—and with that growth comes the responsibility to ensure our education system keeps pace. House Bill 2 is our commitment as a state to meet that challenge head-on with bold investments and forward-looking reforms that will benefit generations of Texas students to come.