New Endowment Proposed to Bolster Texas Public School Funding
Texas public schools are facing significant financial hurdles, leading to difficult decisions for districts across the state, including those in North Texas. A prominent advocacy group, Raise Your Hand Texas, is now championing a bold new solution: an education endowment designed to provide a stable, long-term funding source for schools, moving beyond the current two-year budget cycles. This proposal aims to inject much-needed predictability and sustained investment into the state’s education system.
The Mounting Financial Strain on Texas Public Schools
Many Texas school districts, including those serving North Texas communities, are grappling with stretched budgets. This crisis stems from a confluence of factors, including rising inflation, declining student enrollment in some areas, and state funding that has largely remained stagnant. The last significant increase in the per-student allotment before 2025 was in 2019, and the recent $55 bump is widely considered insufficient to keep pace with economic realities.
The consequences are stark: schools are forced to make hard choices like closing campuses, cutting staff, or asking local voters to approve tax increases just to cover budget shortfalls. A recent survey from the Texas Association of School Business Officials revealed that 63% of districts anticipated ending fiscal year 2025 in a deficit, with 80% planning cuts for fiscal year 2026. This volatile financial environment makes long-term planning incredibly difficult for educators and administrators.
A Bold Vision: The Education Endowment Proposal
To address these systemic issues, Raise Your Hand Texas is advocating for the creation of a new education endowment. This would be the first new revenue source for Texas school funding since 2006, aiming to establish a predictable, long-term funding strategy that is less susceptible to political shifts and biennial budget negotiations. Libby Cohen, CEO of Raise Your Hand Texas, emphasizes the need for a creative and bold approach to competitively fund public schools with a long-term vision.
How the Proposed Endowment Would Work
The advocacy group envisions seeding this new endowment with $10 billion from Texas’s robust rainy day fund, which currently holds around $24 billion. This initial investment is projected to generate substantial distributions: over $560 million by the fifth year and $650 million by the tenth year. Importantly, these funds would supplement, not replace, the general revenue funding that public schools already receive, providing an additional layer of financial stability.
Navigating the Political Landscape
While the idea offers a potential solution, making it a reality presents significant political challenges. Establishing such an endowment would likely require a constitutional amendment, necessitating both legislative approval and voter endorsement.
- Support from Democrats: Some Democratic lawmakers, including Rep. Mihaela Plesa of Dallas and Rep. Diego Bernal of San Antonio, have expressed interest, seeing it as an opportunity for much-needed durability and predictability for school districts to create sustainable budgets.
- Republican Skepticism: However, the proposal faces resistance from some Republicans. State Rep. Matt Shaheen of Prosper, for instance, argues that public schools are not experiencing a “funding crisis,” attributing financial strains and campus closures primarily to declining enrollment rather than insufficient state funding. He also cautions against using the rainy day fund, stressing its importance for genuine economic crises or natural disasters.
- Expert Outlook: Watt Lesley Black Jr., an education policy professor at Southern Methodist University, believes the idea “might be a tough sell” given the Legislature’s historical reluctance to significantly address funding problems.
Considerations and Concerns
Beyond the initial political hurdles, several critical questions arise regarding the endowment’s implementation and long-term impact. Lawmakers like Rep. Bernal caution against the state simply “taking their hands off the wheel” of traditional funding if an endowment is created, emphasizing the need for continued investment in the basic allotment.
There are also concerns about governance and equitable distribution. Rep. Chris Turner of Grand Prairie and Rep. Plesa questioned who would make decisions about fund allocation and how safeguards would ensure equitable benefits across all districts, regardless of their political sway. The existing $57 billion Permanent School Fund, which faced scrutiny over its governance, serves as a reminder that even endowed funds can be subject to political influence.
While the proposed endowment would not replace the Permanent School Fund, it could, as SMU’s Black suggests, be made more palatable by initially targeting specific educational needs, such as early childhood education programs, akin to Connecticut’s model.
Understanding Funding Models: Current vs. Proposed
| Feature | Current Public School Funding Model | Proposed Education Endowment Model |
|---|---|---|
| Funding Cycle | Primarily a two-year budget cycle | Long-term, continuous revenue source |
| Revenue Predictability | Subject to political climate and biennial legislative sessions | Designed to offer sustained, less politically volatile funding |
| Primary Source | General state revenue, often with “temporary fixes” | New, dedicated revenue source (seed from rainy day fund) |
| Ability to Plan | Difficult for districts to plan long-term budgets | Enables greater long-term strategic planning for schools |
Frequently Asked Questions
- What is the proposed Texas Education Endowment?
It’s a new, long-term funding mechanism advocated by Raise Your Hand Texas to provide stable, supplemental revenue for public schools, seeded with $10 billion from the state’s rainy day fund. - Why is a new endowment being proposed now?
Texas public schools face budget shortfalls due to inflation, declining enrollment, and stagnant state funding, prompting calls for a long-term solution beyond temporary fixes. - How would the endowment be funded?
The proposal suggests an initial $10 billion investment from the state’s existing “rainy day fund,” with generated returns distributed to schools. - What are the main political challenges to its creation?
It would likely require a constitutional amendment and faces skepticism from some lawmakers who question the severity of the funding crisis or the use of the rainy day fund. - Would this endowment replace the existing Permanent School Fund?
No, the proposed endowment would serve as a supplemental revenue source, distinct from the Permanent School Fund which primarily guarantees school district bonds and makes appropriations.
As North Texas families and educators navigate ongoing budget challenges, the conversation around this innovative endowment proposal highlights the urgent need for a durable funding strategy for public education. Staying informed about these discussions and their potential impact on local schools remains crucial.
Texas Public School Endowment Proposed
