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Budget Mechanics



Public schools in the state of Texas are funded by three main sources:

  1. Local School District Property Taxes
  2. State Funds
  3. Federal Funds

with the majority of funding coming from local property taxes collected by school districts and state funds.

The Basic Allotment (BA) is set by the Texas legislature, guaranteeing every school district a certain amount of funding for each student based on their Average Daily Attendance (ADA). The BA is currently set at $6,160 per student, with additional funding based on district and student characteristics. The district’s Tier 1 Entitlement is determined by this Basic Allotment and the characteristics of students in the district.

The Tier 1 Entitlement is covered by a sharing of the state with the local district. The state covers a specific portion of the Available School Fund and then local tax collections are applied to determine whether or not the state contributes additional funds.


Example 1:

If the district’s local tax collections cover the Tier 1 Entitlement, then only Available School Funds are distributed.

Example 2:

If the district’s local tax collections do not fully cover the Tier 1 Entitlement, state funds are received to make up the difference in addition to the Available School Funds.

Example 3:

If the district’s local tax collections cover the Tier 1 Entitlement to the extent that no additional state aid (above Available School Funds) is needed to cover the total cost, then the district is required to send the tax collections exceeding the Tier 1 Entitlement back to the state through the mechanism known as recapture.


MONEY GOING OUT (Expenditures)

A visual breakdown of the district’s budget is represented in the Education Dollar graphic below. A large portion of each dollar is spent in the classroom on instructional costs. When looking for cost reductions, it is difficult to make a significant reduction without impacting the classroom.

school dollar