Skip to main content

Bill Analysis: The Texas House Omnibus School Finance Bill (HB 2)

Published Mar 05, 2025 by Jordan Overturf

Empty classroom

This week, the House Public Education Committee held two hearings on its omnibus school finance proposal, House Bill 2 (HB 2). Chairman Brad Buckley has indicated the committee plans to vote on HB 2 at its March 18 hearing.

Ahead of that vote, the Partnership is conducting a deep dive into HB 2 to understand the proposed changes to funding formulas, teacher incentives, Pre-K eligibility and more. Below is a summary analysis of the proposed changes in the bill as filed.

School Finance & District Funding

  • Raises the basic allotment per student from $6,160 to $6,380.
  • Increases required percentage (30% to 40%) of additional funds used for employee compensation.
  • Modifies small and mid-sized district allotment formulas, increasing funding weight calculations.
  • Expands provisions for school districts experiencing a declining enrollment by adjusting funding calculations.

Teacher Designation System & Compensation

  • Expands the categories of teacher designations to include "acknowledged" teachers.
  • Increases the maximum allotment amounts for designated teachers:
    • Master Teacher: Up to $36,000 (previously $32,000).
    • Exemplary Teacher: Up to $25,000 (previously $18,000).
    • Recognized Teacher: Up to $15,000 (previously $9,000).
    • New Category (Acknowledged Teacher or nationally board certified): Up to $9,000.
  • Introduces an enhanced teacher incentive allotment for schools implementing a comprehensive evaluation system.
  • Requires districts to prioritize highly effective teachers being assigned to high-needs campuses.

Pre-Kindergarten & Early Education

  • Expands prekindergarten eligibility for 3-year-olds under partnerships with community-based childcare providers.
  • Grants school districts flexibility in municipal ordinance compliance for pre-K programs.

High-Needs and Resource Campuses

  • Reduces the number of years a school must receive a "D" or "F" rating before being designated as a resource campus (from four years to three years within 10 years).
  • Adjusts staffing criteria for resource campuses, including experience requirements for teachers.

School Year & Attendance Incentives

  • Modifies funding adjustments based on attendance, increasing the threshold for funding stabilization from a 2% to a 5% decline.
  • Lowers the minimum required instructional days for funding eligibility from 180 to 175.
  • Introduces incentives for schools offering at least 200 instructional days.

High School Advising & Workforce Readiness

  • Establishes a high school advising program to support students in college or career planning.
  • Provides funding for high school advisors at $50,000 per full-time equivalent.
  • Creates new advising support mechanisms for high school graduates during the first two years post-graduation.

Charter School Funding Adjustments

  • Modifies Foundation School Program funding formula for charter schools under Chapter 48 of the Texas Education Code.
  • Adjusts additional funding per student in average daily attendance from $125 to $700.
  • Adds new requirements for charter schools to receive additional funding, including performance standards and financial certification requirements.

Miscellaneous Education Reforms

  • Adds a fine arts allotment for students enrolled in approved fine arts courses.
  • Clarifies rules on federal grant administration for nonpublic school participation.
  • Implements new school district notification requirements for property value adjustments affecting funding.

As the committee prepares for the March 18 vote, a committee substitute may be offered to adjust the bill before it is sent to the House Floor for debate. Stakeholders are also waiting for the proposed school district “runs,” which outline the direct changes in funding for each school district.

Those details are expected to be made public in April. The data will be added to the Partnership’s Budget Explorer Tool when available. This tool will make it easier to search for individual districts and see the considerable impact of HB 2’s reforms to public education funding.

For more updates and alerts on the Texas Legislature, click here to sign up for our weekly newsletter. 

Related News

Public Policy

Houston’s Impact in Austin: Legislative Wins from the 89th Session

6/2/25
As the 89th Texas Legislative Session concludes, several key policy measures aligned with the Greater Houston Partnership’s priorities were advanced. With 1 in 4 Texas jobs based in the Houston metro, a nearly $650+ billion regional GDP, and more than 1.2 million students enrolled in regional public education institutions, Houston plays an outsized role in shaping the future of our state. Legislative decisions made in Austin ripple through our 12-county region impacting infrastructure, education, innovation and the workforce that powers Texas. Guided by our Executive Priorities, Water Infrastructure, Education, and Workforce Development, and powered by our elected officials, members and partners, the Partnership worked throughout the session to advocate for policies that will strengthen the greater Houston region and the state. Executive Priority Wins Water Infrastructure A generational investment in Texas’ water future, anchored by a proposed constitutional amendment to dedicate $1 billion annually over the next 20 years, was one of the session’s biggest wins. $265 million+ secured for Houston-area water and flood mitigation projects, including $100 million for the Lynchburg Pump Station. The creation of a new Lake Houston Dredging and Maintenance District to fund ongoing operations A dedicated fund for the Gulf Coast Protection District to continue delivering $550 million for projects to make the coastline and ship channel more resilient Public Education This session delivered the largest infusion of new programmatic funding in more than a decade.  $195 million+ for Houston ISD under a new school finance formula and pay raises for Texas teachers. Higher Education Houston’s institutions saw record-breaking support in recognition of their role in talent development, research, and medical innovation. $2.1 billion+ for Houston area four-year colleges and universities.  Workforce Development With a growing emphasis on applied learning and employer-aligned training, Texas made strong investments in talent development. HB 120 + HB 20 + SB 1786 expanded access to school-to-career programs and career-focused science pathways, and continued the work at community and junior colleges to deliver more credentials of value Investing in What’s Next The Partnership also supported forward-looking policies that position Houston and Texas for long-term growth: $3 billion to launch the Dementia Prevention and Research Institute (DRPIT). $715 million in funding for nuclear energy, semiconductors, and emerging industries. These wins were only possible through deep collaboration, among our coalition partners, elected officials, business and community leaders, and the engaged members of the Partnership. Together, we’ve demonstrated how a united voice for Houston helps drive results that benefit all Texans. We are grateful for the leadership of our regional delegation and statewide champions who delivered these critical investments. Click here to download the 89th Texas Legislative Session Summary. For a full rundown of bills the Partnership tracked throughout session, click here. 
Read More

Related Events

Membership

Women in Government Reception

The women of the Greater Houston Partnership’s Public Policy Division are pleased to invite you to our Women in Government Reception, an event designed to celebrate and connect women who are making an impact in…

Learn More
Learn More
Executive Partners