This week marked a historic moment in education as Texas State Legislature outlined the final version of House Bill 3, focused on School Finance. A lot of information of varied accuracy has been floating around about this bill, so in striving to be Midland’s local source for education information, we wanted to outline some of the most pertinent facts to help you better understand the implications of this bill.

The Basics:

HB 3 invests approximately $4.5 billion into Texas public education, reduces recapture by $3.6 billion and provides $5 billion in property tax relief. The legislation prioritizes many of the student-focused recommendations from the 2018 Texas Commission on Public School Finance.

Some Specifics:

  • New Dollars for Schools and Property Tax Relief: Increases the basic allotment to $6,160, a 20% increase above current law and compresses local property taxes by 8 cents in 2020 and 13 cents in 2021. This basically refers to the amount of money spent per pupil, or the cost associated with educating a child. Compression of local property taxes will result in local property tax relief, since Midland is a “property-rich” district. Reducing recapture means that our district won’t have as much money to send back to the state, otherwise known as the “Robin Hood” act.
  • Funding for Early Literacy: Infuses $780 million for low-income and English-language learning students in grades K-3, sufficient to fund full-day, high-quality pre-K for eligible 4-year-old students statewide, and an additional $1.1 billion in targeted resources for low-income students. This means that more money is being focused on the early critical years with options to put more money towards resources to support children with dyslexia, dual-language programs. Since Midland Independent School District (MISD) already has full-day pre-K, that money can be used towards other areas of need in early literacy.
  • Quality Standards for K-3: Expands evidence-based strategies to improve 3rd grade reading proficiency, such as reading academies and a requirement for Pre-K-6th grade teachers to demonstrate competency in the science of teaching reading by January of 2021. For us, this means the districts will be able to identify gaps in grades Pre-K-6th in reading on grade level and focus money towards solutions such as teacher training, additional literacy tools, or dedicated curriculum.
  • Outcomes-Based Funding: Provides equitable bonus funding to school districts based on the number of students meeting postsecondary readiness and access goals, differentiated for low-income, non-low-income, and special education student cohorts. This means our districts will receive more funding for more students graduating “college, career, or military ready” based on the standards TEA has placed on that definition. Passing the TSI (Texas Success Initiative test), hours enrolled in dual-credit classes, or ACT/SAT test scores are a few examples of this readiness indicators. Currently, only  about 50% of MISD students are graduating college, career, or military ready. This incentivizes plans to increase that number, like Educate Midland’s “What’s Your Plan?” campaign.
  • Strategic Teacher Compensation: Creates an optional pool of funding for districts to enact locally developed, robust teacher evaluation systems and reward Texas’ most effective educators. This is an accountability component, or a plan to allow teachers to be paid according to their added value/effort, instead of tying it to tenure or student-based outcomes (test scores.) Think of it how other professions are assessed on a performance-evaluation scale, and then compensated according to the standards set prior.
  • Dedicated Funding for Teacher Pay Raises: Requires that 30% of the increase in the basic allotment be used on pay raises for teachers, librarians, counselors, and nurses, prioritizing differentiated compensation for classroom teachers with more than 5 years of experience. This will likely be discussed and determined in the school board’s budget meeting. These raises must come from the $6,160 per pupil expense. So depending on how many children enroll in MISD or Greenwood ISD, $1,848 of that must go towards this “pot” of teacher raises.

What Comes Next:

  • HB3 has officially passed and the camaraderie amongst the Speaker of the House, Dennis Bonnen, and the Lieutenant Governor (head of the Senate), Dan Patrick, were very cordial about the agreement our government was able to reach in support of 5.4 million kids in Texas!
  • Gov. Abbott will sign the bill into law in the coming weeks.
  • Once signed into law, the Texas Education Agency, with other agency partners, will begin to create the standards for districts and charter schools surrounding what they can and cannot do with this funding.


Facts and figures provided by


For more information on this landmark legislature, check out this recent MRT article.