Texas School Districts Welcome New Funding, But Budget Gaps Persist

As Texas school districts prepare for the 2025–26 academic year, many are seeing a financial boost from House Bill 2, an $8.5 billion education funding package recently signed into law by Governor Greg Abbott. The measure, the first major school finance legislation since 2019, offers much-needed relief after years of deep cuts, but school officials caution that significant budget shortfalls remain.

At the heart of the bill is a $4 billion investment in teacher and staff pay raises, which also expands the Teacher Incentive Allotment, the state’s merit-based pay program. While many administrators welcome the move, they also point to broader concerns. For many Central Texas districts, rising costs in special education, safety, and operations continue to outpace state support.

“We want to attract and keep the very best teachers,” Abbott said during the bill’s signing ceremony at Salado Middle School on June 4, calling educator pay raises an “emergency priority” this session, as reported by the Austin American-Statesman.

The law also includes $1.3 billion to help cover operational expenses, nearly $850 million for special education, $650 million for early literacy, and $430 million dedicated to school safety. Still, district leaders say the funding won’t fully close the gap between what the state provides and what schools actually spend.

Austin ISD expects $35.9 million from the new legislation, with $20 million for staff raises and about $9 million in flexible funds after mandatory expenses. Nearby Eanes ISD will receive $4.6 million, including $2.9 million for raises, trimming its deficit from $7.1 million to $5.7 million. Bastrop ISD, despite passing a balanced $146.3 million budget, also anticipates more funding, though officials say it still falls short of actual needs.

“Our needs still exceed our resources currently,” White said. “It’s a good day. Not quite great, but we’re still very happy. It’s definitely great for the teachers and staff in the district.”

Districts across the region are taking cautious steps as they await finalized figures from the Texas Education Agency.  While HB 2 marks a significant investment in Texas public education, school leaders say ongoing financial challenges demand continued attention, especially as inflation, safety concerns, and special education needs stretch local resources thin.