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Public School Finance

Texas children, who are the foundation of our future workforce, must have access to a quality education. Improving student achievement starts with how our state finances public education. For the first time since 1993, transformational, long-term improvements to the K-12 education system advanced during the 86th Texas Legislative Session with the passage of school finance reform.

The reform legislation provided $6.5 billion in new state funding to the public education formula funding system and placed greater funding emphases on proven programs aimed at increasing outcomes for all students. Before the start of the legislative session, the Partnership launched a Public School Finance Workshop series in the fall of 2018 designed to enhance the business community's understanding of school finance. That series culminated in publishing a school finance white paper. The Partnership will take a similar data-driven approach to analyzing Texas' public education achievement and identify areas where the business community can support growth.

The Partnership's Priorities for Public School Finance

  • Help the business community to understand the new public education formula funding system and how it impacts the Houston region

  • Advance near- and long-term improvements to public education quality

  • Continue to advocate for sufficient funding of the new school finance formula system and advance innovative initiatives

Actively Involved

Signed into law after the 86th Texas Legislative Session, House Bill 3 delivers transformational school finance solutions, increases the state’s share of funding public education from 38 percent to 45 percent and reduces the burdensome cost of recapture.

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View the Interactive District Map

Explore school finance formula by district.

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New School Finance Formula

Easily follow the new school finance formula on just one page.

See the formula

White Paper Studies School Finance System

Before the session, the Partnership published this white paper.

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Related News

Education

Is Greater Houston Getting a Fair Cut of Higher Education Funding?

11/20/20
Colleges and universities draw funds from various sources to sustain their operations, but it’s the state funding that often receives the most attention due to the complexities of the funding formula and the percentage of the funds provided. Unique to Texas is the distinction between institutions receiving dollars from the Permanent University Fund (PUF) and the Higher Education Fund (HEF), which helps explain why we see funding disparities among public higher education institutions in Texas.   The PUF is a constitutionally established public endowment dating back to 1876, supported by land grants previously appropriated to the University of Texas (UT), plus an additional 2.1 million acres located in West Texas. The land produces two lines of income—surface and mineral. A designated percentage of the PUF income is placed into the Annual University Fund (AUF) for the support of the UT System and the Texas A&M University (TAMU) System. The UT System receives two-thirds of the AUF while the TAMU System receives the remaining one-third. The estimated value of the PUF for the 2018-19 biennium was $22.8 billion with $1.8 billion distributed to the AUF.     The HEF was later established in 1984 by constitutional amendment as a counterpart to the PUF for Texas public institutions of higher education that are ineligible for drawing down funds from the AUF. The Constitution requires annual appropriations for the HEF until the corpus reaches $2 billion dollars, at which time 10% of any investment income will be added back to the fund as part of the corpus and appropriations will cease. The estimated value of the HEF funds for the 2018-19 biennium was $787.5 million.    Both the HEF and the PUF allocation (to the AUF) may be used to acquire land; construct, equip, repair, or rehabilitate buildings; and acquire capital equipment and library books and materials. Institutions may also use a portion of their funds to make debt service payments on authorized bonds. However, income from the PUF may also be used for support and maintenance of university programs at certain institutions; whereas, HEF funds may not. There are currently 22 HEF institutions statewide, including 5 in the Houston area, compared to 5 PUF Excellence institutions and 11 PUF-Debt Service Institutions statewide.   The sheer value of the PUF, the broader acceptable uses, and the fewer number of institutions with access to the funds have created a disparity in funding for HEF institutions, including those serving the Houston region. With an eye toward ensuring Houston higher education institutions have the same advantages as all other public universities in the state, the Partnership has launched the Greater Houston HUB (Higher Education United with Business). The HUB will serve as a platform to develop a better understand of the challenges facing the institutions and the needs of the business community; to find common areas for collaboration; and build awareness to address funding disparities.    To learn more about the Greater Houston HUB, click here. Connect with the Partnership's higher education policy team, Tiffani Tatum.
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Economy

Judge Hidalgo Discusses Growing COVID-19 Concerns, New Measures at State of the County Event

11/13/20
Harris County Judge Lina Hidalgo expressed concern about the rising number of COVID-19 cases in the region and discussed a number of measures the county has implemented to combat the virus’ impact on residents in her 2020 State of the County presentation.  Judge Hidalgo participated in a fireside chat on November 12 with Scott McClelland, President of H-E-B Food and Drug and the Greater Houston Partnership’s 2019 Board Chair. The Partnership hosted the Judge for her second State of the County event, which was held virtually.  “The impacts on our community from the coronavirus are enormous and they’re nowhere near over,” said Judge Hidalgo, citing a rising number of daily new cases as well as increased positivity rates and hospitalizations in the county.  The Judge called on state officials to institute a more stringent threshold-based system for triggering shutdowns if the situation does not improve. She said the economic impact of allowing the virus to spread unchecked would be far more damaging than temporary shutdowns. “When folks know that it’s safer out there, they’ll have the confidence to go out and engage in the activity that will help our economy to rebound.”  In recent months, the county has launched a $40 million recovery fund for struggling small businesses and a separate $40 million fund to provide rental assistance to tenants affected by the economic downturn.   Judge Hidalgo also discussed Harris County’s work to help close the digital divide, particularly for students who need devices and connectivity for remote learning. In the spring, the county invested about $30 million to ensure every child who needed a device could get one.  The Judge also touched on the county’s bail reform efforts and the positive data that has come out of that reform. Switching to infrastructure, Judge Hidalgo emphasized the importance of widening and deepening the Houston Ship Channel, which will enable the Port of Houston to host ever-larger vessels and effectively compete with other ports along the Gulf Coast.  Watch the full State of the County presentation via the link on this page. 
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