Public Education Spending in Texas

In the 2012-13 school year, districts spent $53.4 billion, an increase of 5.6 billion over the last decade.

Total School District Expenditures

2003-04 through 2012-13 School Years (in Billions)

Due to the Great Recession and subsequent budget cuts, expenditures have fallen in recent years, and spending growth has been outpaced by enrollment growth. From the 2003-04 school year, inflation-adjusted school district spending grew 12 percent, while enrollment rose 17 percent.

Change in Inflation-Adjusted District Expenditures vs. Enrollment

2003-04 through 2012-13 School Years
(2003-04 = 0)

refer to detail table

Total School District Expenditures vs. Enrollment (detail)
Year Inflation-Adjusted
Expenditures
% change Enrollment % change
2003-04 $47,784,974,091 0% 4,311,502 0%
2004-05 $49,033,133,019 3% 4,383,871 2%
2005-06 $50,429,487,965 6% 4,505,572 5%
2006-07 $52,708,668,762 10% 4,576,933 6%
2007-08 $56,032,698,004 17% 4,651,516 8%
2008-09 $58,935,284,183 23% 4,728,204 10%
2009-10 $59,441,463,297 24% 4,824,778 12%
2010-11 $57,275,200,169 24% 4,912,385 14%
2011-12 $53,423,669,232 12% 4,978,120 15%
2012-13 $53,356,468,731 12% 5,058,939 17%

Note: Inflation-adjusted expeditures are in 2012-13 dollars.

Sources: Texas Education Agency, National Center for Education Statistics, Texas Comptroller of Public Accounts


Texas school districts report expenditures by objects, which are broad categories of expenditures. The major objects are:

  • Payroll — salaries, wages and benefits for school district employees, account for 62.5 percent of all spending on public education;
  • Other Operating — operating expenses such as food services, vehicle fuel, supplies, materials and services;
  • Capital Outlay — spending on fixed assets such as buildings; and
  • Debt Service — principal and interest payments on bonds and other debt.

Statewide School District
Expenditures by Object

2012-13 School Year (in Billions)

Total Expenditures = $53.4 Billion

refer to detail table

Statewide School District Expenditures by Object (detail)
Object Amount Percent
Payroll Costs $33,371,821,067 62.5%
Other Operating Costs $9,200,026,920 17.2%
Capital Outlay $5,031,649,253 9.4%
Debt Service $5,752,971,491 10.8%
Total $53,356,468,731

Source: Texas Education Agency


Debt service has grown faster than any other category, up 92 percent since the 2003-04 school year.

For more information about school districts and their debt, please refer to the Comptroller’s recent report Your Money and Education Debt and the Debt at a Glance for ISDs tool.

Growth in Major Categories of School District Spending

2003-04 through 2012-13 School Years
(2003-04 = 0)

refer to detail table

Growth in Major Categories of School District Spending (detail)
Years Payroll percent
change
Other
Operating
percent
change
Debt
Service
percent
change
Capital
Outlay
percent
change
2003-04 $24.66 0% $6.35 0% $2.99 0% $4.43 0%
2004-05 $25.42 3% $6.72 6% $3.26 9% $5.23 18%
2005-06 $26.77 9% $7.31 15% $3.48 16% $5.81 31%
2006-07 $28.50 16% $7.84 23% $3.99 33% $6.18 40%
2007-08 $31.01 26% $8.35 31% $4.35 46% $7.56 71%
2008-09 $32.49 32% $8.62 36% $4.87 63% $8.70 96%
2009-10 $33.90 37% $9.15 44% $5.19 73% $7.45 68%
2010-11 $34.31 39% $9.06 43% $5.34 79% $6.02 36%
2011-12 $32.65 32% $8.99 41% $5.81 94% $5.10 15%
2012-13 $33.37 35% $9.20 45% $5.75 92% $5.03 14%

Sources: Texas Education Agency, Texas Comptroller of Public Accounts


District Fund Balances

District fund balances represent the difference between a district’s assets and liabilities. While some of this money is reserved for specific legal purposes or district programs, unassigned fund balances for ISDs and unrestricted net assets for charters represent reserve funds.

These funds help to guarantee districts’ cash flow, since state, local and federal funds arrive at different times throughout the year.

It is important to note, however, that while these amounts are not designated for a specific purpose, they are not necessarily available for spending on any purpose.

Growth in Unreserved Fund Balances

2003-04 through 2012-13 School Years
(2003-04 = 0)

refer to detail table

Growth in Unreserved Fund Balances (detail)
Years Unreserved Fund Balances percent change
2003-04 $4,899,116,058 0%
2004-05 $5,477,398,260 12%
2005-06 $6,047,213,376 23%
2006-07 $6,928,555,936 41%
2007-08 $7,066,606,345 44%
2008-09 $7,278,208,782 49%
2009-10 $7,355,367,290 50%
2010-11 $8,258,499,819 69%
2011-12 $9,265,807,326 89%
2012-13 $9,789,105,038 100%

Sources: Texas Education Agency, Texas Comptroller of Public Accounts


Cost Drivers

Enrollment Growth

Texas is a rapidly growing state and higher enrollment is responsible for some of the increase in spending. The number of students in Texas public schools rose by nearly 750,000 since 2003-04.

That is roughly equivalent to adding a district the size of Fort Worth ISD to the Texas public school population each year.

Another important trend to note is that Texas’ enrollment growth has been entirely driven by the increase in economically disadvantaged students. Since the 2003-04 school year, the number of economically disadvantaged students has increased by 776,840, while the number of non-economically disadvantaged students has actually fallen by almost 30,000.

School districts are entitled to 20 percent more state funding for each economically disadvantaged student under the Foundation School Program. As a result, an increase in this population can have a direct impact on state education appropriations.

Further, recent projections show that poverty rates among Texas households could increase from 14.4 percent in 2010 to 17.7 percent in 2050. Coupled with Texas’ increasing population, this trend would likely result in a substantial increase in the number of economically disadvantaged students served by public schools.

Total Students by Economically Disadvantaged Status

2003-04 through 2012-13 School Years
(in Millions of students)

refer to detail table

Total Students by Economically Disadvantaged Status (detail)
Years Economically
Disadvantaged
Non-Economically
Disadvantaged
Total
Enrollment
2003-04 2,277,901 2,033,601 4,311,502
2004-05 2,394,001 1,989,870 4,383,871
2005-06 2,503,755 2,001,817 4,505,572
2006-07 2,540,888 2,036,045 4,576,933
2007-08 2,572,093 2,079,423 4,651,516
2008-09 2,681,474 2,046,730 4,728,204
2009-10 2,848,067 1,976,711 4,824,778
2010-11 2,909,554 2,002,831 4,912,385
2011-12 3,008,464 1,969,656 4,978,120
2012-13 3,054,741 2,004,198 5,058,939

Sources: Texas Education Agency, Texas Comptroller of Public Accounts


School Mandates

Various state and federal laws and rules require Texas school districts to create specific programs or maintain certain standards, which can increase a school district’s costs.

Class Size Limit

Texas school districts must limit class size to 22 students per teacher in kindergarten through grade four.

  • Districts may apply to TEA for an exception from this requirement for each grade level and each campus that would exceed the 22-student limit.
  • According to TEA, in 2011-12 the agency granted 3,442 exceptions to 1,734 campuses in 312 districts, or about 25 percent of all districts.

Many school officials believe the “22:1” limit interferes with their ability to staff campuses cost-effectively, asserting that classes with up to 25 students can operate without any loss of instructional effectiveness. Some suggest that the 22:1 requirement be based upon average class size rather than applying to all classes, giving districts more flexibility to set class size, allocate resources and limit costs.

For example, a district with 66 students in second grade currently must have three teachers, but the addition of just one more student would require the hiring of another teacher plus the acquisition of additional classroom space.

Staff Benefits

Retirement benefits generally are funded by state and employee contributions. For fiscal 2014, the state contributed 6.8 percent of each teacher’s salary to the TRS pension plan.

The state contribution rate, however, applies only to the amount of each teacher’s salary set in the state minimum salary schedule; districts must supply the state’s share of any teacher salary amount above the state minimum.

Teacher Retirement System of Texas (TRS) Pension Contributions

2010-11
Biennium
2012-13
Biennium
2014-15
Biennium
2016-17
Biennium
Source 2010-11 Fiscal 2012 Fiscal 2013 Fiscal 2014 Fiscal
2015
Fiscal
2016
Fiscal 2017
State Contribution 6.644%* 6.0% 6.4% 6.8% 6.8% 6.8% 6.8%
Member Contribution 6.4% 6.4% 6.4% 6.4% 6.7%
(1.5% from district)
7.2%
(1.5% from district)
7.7%
(1.5% from district)

*Reflects one-time supplemental payment directly into the TRS Retirement System Trust Fund.

Source: Teacher Retirement System of Texas


School districts, their employees and the state also contribute to the Teacher Retirement System for health benefits.

  • TRS-ActiveCare provides health insurance for active school district employees.
  • TRS-Care provides health insurance for retirees.

The table below shows school district and employee contributions to various TRS programs in fiscal 2013.

Contributions to Teacher Retirement and Health Benefit Plans, 2013

Benefit State School District Employee
Retirement $1,347,279,239 $444,846,666 $1,792,125,905
Health Care, Retired Teachers $127,435,119 $152,874,976 $180,824,522
Health Care, Active Teachers* $1,808,521,683

*Neither TEA nor TRS disaggregates state, district and employee contributions for TRS-ActiveCare.

Source: Teacher Retirement System of Texas

 

Testing Requirements

State law requires TEA to test public school students on what they have learned. TEA developed the State of Texas Assessments of Academic Readiness (STAAR) for this purpose. STAAR tests are administered in grades 3-8, as well as at the end of certain courses at the high school level.

School districts incur some costs associated with state testing requirements:

  • School districts often spend weeks preparing for and administering the STAAR tests, an effort including staff training on security and test administration.
  • School districts must keep test records for five years, which can involve storage costs.
  • School districts also are responsible for some of the costs of testing materials, such as benchmark tests administered to assess student progress in acquiring the knowledge and skills assessed on STAAR.
  • In fiscal 2013, TEA spent nearly $83 million on assessment and accountability. This does not include money districts spent on administering state tests.

Reporting Requirements

In addition to academic and financial reporting, districts must prepare many other reports and public notices. The costs of these reporting requirements can be significant. For example, several of the required notices must be published in local newspapers, often for several days. The costs of newspaper ads can range from a few hundred dollars in the smallest regional papers to thousands of dollars in major markets, such as Dallas and Houston.

For a more in-depth analysis of additional school district mandates, please refer to the Texas Association of School Board’s Report on School District Mandates: Cost Drivers in Public Education.

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