Read this seven page report written by Chandra Villanueva from Every Texan. The report contains crucial information about recapture, school funding, and HB 3. We must better understand public school finance in order to effectively fight for our schools in the 2023 Texas legislative session.

 If you only have time to read 1,000 words, below are the important points in Chandra Villanueva’s own words.

Instead of providing all schools with adequate levels of funding, the Legislature has used recapture to justify bringing the top down rather than the bottom up. By deeming some districts as “property-wealthy” while not providing enough funding to anyone, legislative leadership has sowed division among districts.

School funding formulas start with a per-student amount determined by the legislature, the basic allotment. Adjustments are then made for school district characteristics (i.e. district size) and student characteristics (i.e. number of emergent bilingual students, low-income students, and special education students). These adjustments determine how much revenue a school district is allowed to receive for operating its schools, and if a district is considered property-wealthy (pays recapture) or property-poor (receives state aid).

The basic allotment is a completely arbitrary number; it is not based on identifiable costs or adjusted regularly. When the Legislature reconvenes in 2023, the basic allotment will have been stagnant for four years. If the Legislature adjusted the basic allotment for inflation annually, using the Bureau of Labor Statistics Consumer Price Index, the basic allotment would be $7,075, instead of just $6,160 it is now.

Local property dollars are collected first to meet the allowed funding entitlement. If a school district is able to collect more than its entitlement, the state “recaptures” or collects that excess revenue and that money is then redistributed to fund other school districts and charter schools. However, recapture dollars do not increase the amount of funding for these other schools or districts; they are just part of the funding a school receives. Recapture levels the playing field between property-wealthy & property-poor districts. This means that if a property-wealthy district experiences budget constraints then all districts are in the same boat.

The state’s share of school funding is made up of six different funds: Available School Fund, Property Tax Relief Fund, Tax Reduction and Education Excellence Fund, Lottery Proceeds, Recapture, and Foundation School Fund (General Revenue). Collecting more from any one of the six funds does not increase the amount of funding available for schools. The only way to increase school funding is to make changes to the formulas that determine what schools are entitled to receive.

While recapture has grown significantly, it remains a small part of overall school funding. In 2023, recapture is estimated to account for only 6% of all school funding. The expansion of charter schools contributes to the growth in recapture. While recapture dollars are statutorily dedicated to education, they are not dedicated exclusively to property-poor districts.

By 2023, nearly 18% of the state’s funding for public education, when including recapture, will go to charter schools, up from 8% in 2014.

Before the passage of HB 3 in 2019 when property values would rise the state would benefit by lowering the amount of state aid needed to fulfill its entitlement to school districts. With the passage of HB 3, the Legislature implemented a system of tax compression that shifts the responsibility to fund schools from local property taxes to state aid. While the state’s responsibility to fund schools is increasing,  it does not increase the amount of funding available to schools. Eventually, the main portion of the school property tax rate will be eliminated, which will strain the state budget and lead to cuts in education funding. 

Instead of directing additional state resources to improve school funding for all districts, the Legislature chose tax cuts that are making the system more unfair for everyone. Without an alternative revenue source to replace property tax revenue lost to tax compression, the quality of our public education system will ultimately pay the price. Recapture has never been the villain of the school finance system but is used as a justification to push harmful tax cuts.

Increasing the basic allotment and funding for special populations puts kids first.”

Read the full article written by Chandra Villanueva below.



Working Together to Strengthen Houston's Public School System