Texas public schools are receiving more funding per student, but declining enrollment is squeezing some district budgets because expenses do not fall as quickly as revenue, education officials told state senators.
At Tuesday’s Senate Education Committee hearing, Texas Education Agency Commissioner Mike Morath told lawmakers that legislative funding for public education has steadily increased on a per-pupil basis over the past decade.
Morath said Foundation School Program funding currently amounts to roughly $14,500 to $15,000 per student, before additional federal funding and other state appropriations. He also noted that the figure does not include certain additional funding, including instructional materials and the state’s contributions to teacher retirement benefits.
“Funding has, in fact, significantly increased on a per-pupil basis for Texas public schools,” Morath told lawmakers.
He pointed to House Bill 2, the 2025 school funding legislation, which he said added approximately $4.5 billion annually to the public education system. The legislation increased funding by roughly $700 to $800 per student through various allotments.
At the same time, Texas school districts facing financial pressure are pointing to declining enrollment as part of the reason.
Amanda Brownson, deputy executive director of the Texas Association of School Business Officials, told lawmakers that Texas once added roughly 70,000 students to its public schools each year. That growth slowed to about 4,000 students annually before the state lost approximately 76,000 students last year.
Texas’ school finance system is largely based on the number of students districts serve, meaning state funding can decline as enrollment and attendance decline.
“Revenue falls in a straight line as enrollment falls,” Brownson told lawmakers.
However, Brownson emphasized that district expenses do not decline as quickly as enrollment. While costs for items such as food and classroom supplies can decrease relatively quickly, expenses associated with teachers, transportation, campuses, utilities, and administrative personnel can take much longer to reduce.
Georgetown Independent School District Superintendent Devin Padavil described how the district ultimately cut $13.1 million from its $167 million budget over two years, including $1.4 million from central office operations and $1 million through changes to transportation routes.
The enrollment debate also intersects with Texas’ new school choice program.
Texas Education Freedom Accounts (TEFA) has exceeded its first-year expectations for applications.
Complaints that students leaving public schools reduces funding available to districts have arisen from various public school advocacy groups.
A recent analysis by the Texas Public Policy Foundation (TPPF) disputed the suggestion that TEFA is directly taking those dollars from public schools. TEFA was funded through a separate appropriation, not through the public school allotment.
TPPF cited an estimate that 28,200 students leaving public schools could reduce district funding by $227 million but argued that the reduction represents funding districts would no longer receive for students they no longer serve rather than money transferred into TEFA.
The distinction is significant because districts can lose funding when students leave public schools for a variety of reasons, including moving to another district, enrolling in private school, homeschooling, or leaving the state.
The hearing also highlighted the broader demographic changes affecting Texas schools.
Texas’ school-age population has begun to decline as birth rates fall, creating a new challenge for districts accustomed to consistent enrollment growth.
As enrollment patterns change, lawmakers are examining how the state’s school funding formula affects districts and whether it provides enough flexibility for schools to adjust their budgets while maintaining educational programs.
The next legislative session begins January 12.
