While the House Public Education Committee discusses its comprehensive school finance reform, the Senate addresses teacher pay incentives as a stand-alone measure. Senate Bill 26 (SB 26) was swiftly voted out of the Senate on February 26 and now awaits consideration by the House. The upper chamber's decision to separate its education funding priorities follows a similar approach from the 2023 legislative session. As the House and Senate exchanged proposals, teacher incentives and school finance measures were frequently adjusted during negotiations. Ultimately, no proposals were passed, leaving about $5 billion in school funding unallocated in state coffers for two years. Despite the different legislative approaches, SB 26's provisions are similar to the teacher incentive proposals in House Bill 2. Below is a topline analysis of the proposed changes in SB 26. Teacher Designation System Changes Expands teacher designations to include a new category: "acknowledged teacher." Allows National Board Certified teachers to be designated as "nationally board certified" instead of "recognized." Sets an expiration date of September 1, 2028, for the designation of National Board Certified teachers. Introduces new criteria for school districts and charter schools to be designated as "Enhanced Teacher Incentive Allotment Schools," requiring: A strategic evaluation system for principals and assistant principals. A performance-based compensation system for teachers and administrators. Promotes the inclusion of all teachers in the teacher designation system, though not all teachers will receive enhanced designations. A locally designed plan to place highly effective teachers in high-needs schools. Changes to Teacher Incentive Allotments Increases funding for teacher designation levels under the incentive program: Master Teacher: Base amount increases to $12,000-$36,000 (previously $12,000-$32,000). Exemplary Teacher: Base amount increases to $9,000-$25,000 (previously $6,000-$18,000). Recognized Teacher: Base amount increases to $5,000-$15,000 (previously $3,000-$9,000). Acknowledged Teacher: New category with allotments ranging from $3,000-$9,000. Adds a 10% funding boost for schools designated as Enhanced Teacher Incentive Allotment Schools. New Teacher Retention Allotment Provides additional salary incentives for teachers based on years of experience. Small districts (≤5,000 students) $5,000/year for teachers with 3-5 years of experience. $10,000/year for teachers with 5+ years of experience. Larger districts (>5,000 students): $2,500/year for teachers with 3-5 years of experience. $5,500/year for teachers with 5+ years of experience. Ensures districts use the funding for salary increases in the 2025-26 school year and maintain them in subsequent years. Grant Program for Local Teacher Designation Systems Establishes a grant program to help districts expand local teacher designation systems. Aims to increase the number of teachers eligible for designations. Grants will be tailored to meet district-specific needs and support regional leadership capacity. Teacher Liability Insurance & Rights Protection Requires the state education agency to contract with a third party to provide: Assistance in understanding teacher rights, duties, and benefits. Liability insurance coverage for teachers against third-party claims related to their teaching duties. Prohibits districts from interfering with teachers’ access to these services. Changes to Salary Deductions for Teacher Organizations Modifies rules for payroll deductions for professional organization dues: Allows deductions for entities providing liability insurance services. Simplifies payroll deduction procedures by removing the need for employees to specify the number of pay periods for deductions. Pre-Kindergarten Eligibility Expansion Expands pre-K eligibility to children of public school classroom teachers employed within the same school district offering pre-K programs. Adjustments to State Funding for School Districts Provides additional state aid adjustments to help districts maintain financial stability when transitioning under new funding rules. The House could adopt additional reforms from SB 26 under its House Bill 2, the omnibus school finance reform measure. Click here to review the analysis of HB 2.  For now, SB 26 remains eligible for referral to the House Public Education Committee. These differences in policy approach are an early signal that there will be efforts in each chamber to promote the preferred bill on any given issue. Those negotiations may be elevated to the Big 3 (House Speaker Dustin Burrows, Lt. Gov. Dan Patrick, and Governor Greg Abbott) for a final compromise.   For more updates and alerts on the Texas Legislature, click here to sign up for our weekly newsletter. 

This week, the House Public Education Committee held two hearings on its omnibus school finance proposal, House Bill 2 (HB 2). Chairman Brad Buckley has indicated the committee plans to vote on HB 2 at its March 18 hearing. Ahead of that vote, the Partnership is conducting a deep dive into HB 2 to understand the proposed changes to funding formulas, teacher incentives, Pre-K eligibility and more. Below is a summary analysis of the proposed changes in the bill as filed. School Finance & District Funding Raises the basic allotment per student from $6,160 to $6,380. Increases required percentage (30% to 40%) of additional funds used for employee compensation. Modifies small and mid-sized district allotment formulas, increasing funding weight calculations. Expands provisions for school districts experiencing a declining enrollment by adjusting funding calculations. Teacher Designation System & Compensation Expands the categories of teacher designations to include "acknowledged" teachers. Increases the maximum allotment amounts for designated teachers: Master Teacher: Up to $36,000 (previously $32,000). Exemplary Teacher: Up to $25,000 (previously $18,000). Recognized Teacher: Up to $15,000 (previously $9,000). New Category (Acknowledged Teacher or nationally board certified): Up to $9,000. Introduces an enhanced teacher incentive allotment for schools implementing a comprehensive evaluation system. Requires districts to prioritize highly effective teachers being assigned to high-needs campuses. Pre-Kindergarten & Early Education Expands prekindergarten eligibility for 3-year-olds under partnerships with community-based childcare providers. Grants school districts flexibility in municipal ordinance compliance for pre-K programs. High-Needs and Resource Campuses Reduces the number of years a school must receive a "D" or "F" rating before being designated as a resource campus (from four years to three years within 10 years). Adjusts staffing criteria for resource campuses, including experience requirements for teachers. School Year & Attendance Incentives Modifies funding adjustments based on attendance, increasing the threshold for funding stabilization from a 2% to a 5% decline. Lowers the minimum required instructional days for funding eligibility from 180 to 175. Introduces incentives for schools offering at least 200 instructional days. High School Advising & Workforce Readiness Establishes a high school advising program to support students in college or career planning. Provides funding for high school advisors at $50,000 per full-time equivalent. Creates new advising support mechanisms for high school graduates during the first two years post-graduation. Charter School Funding Adjustments Modifies Foundation School Program funding formula for charter schools under Chapter 48 of the Texas Education Code. Adjusts additional funding per student in average daily attendance from $125 to $700. Adds new requirements for charter schools to receive additional funding, including performance standards and financial certification requirements. Miscellaneous Education Reforms Adds a fine arts allotment for students enrolled in approved fine arts courses. Clarifies rules on federal grant administration for nonpublic school participation. Implements new school district notification requirements for property value adjustments affecting funding. As the committee prepares for the March 18 vote, a committee substitute may be offered to adjust the bill before it is sent to the House Floor for debate. Stakeholders are also waiting for the proposed school district “runs,” which outline the direct changes in funding for each school district. Those details are expected to be made public in April. The data will be added to the Partnership’s Budget Explorer Tool when available. This tool will make it easier to search for individual districts and see the considerable impact of HB 2’s reforms to public education funding. For more updates and alerts on the Texas Legislature, click here to sign up for our weekly newsletter.