Texas House Bill 3 (HB 3), passed in 2019, was one of the largest school finance overhauls in the state’s history, largely focused on supporting districts with large economically disadvantaged populations. The bill included an $11.6 billion package that combined $6.5 billion in new education funding and $5.1 billion in property tax relief.
$11.6B
Total HB 3 package
$6.5B
New education funding
$5.1B
Property tax relief
HB 3 was designed to generate significant revenue gains for school districts. For example, according to a Legislative Budget Board model, as of 2021, Humble Independent School District was estimated to increase revenue by almost $24.3 million, while New Caney Independent School District was estimated to increase revenue by $16 million.
Yet many districts still haven’t fully captured the funding they could have received in the seven years since the bill passed.
Much of HB 3 funding isn’t automatic and depends on more than enrollment numbers. It often requires meticulous data tracking and quantifiable goals that can add administrative strain on schools. However, with changes to tracking, goal alignment, and teacher investment, districts can capture more of this funding.
01 — The Changes
What HB 3 Actually Changed
HB 3 made a number of changes, including:
- Property tax compression: lowered school district tax rates statewide.
- Reduced recapture: less revenue taken from wealthier districts with excess local revenue.
- Higher per-student funding: increased the state funding allotment per student.
- Teacher pay: raised the state minimum salary schedule for teachers.
- Compensation requirements: 30% of district budget increases must go toward employees, with 75% of that reserved for teachers, nurses, librarians, and counselors.
- Teacher Incentive Allotment (TIA): a merit-pay system for top-performing teachers, particularly in rural or low-socioeconomic schools.
- Full-day pre-K: funding for eligible children under four.
- CCMR outcomes bonus: the College, Career, or Military Readiness bonus for students who graduate above a certain performance level.
02 — The Upside
Why Economically Disadvantaged Districts Have the Most Upside
While HB 3 benefits schools statewide, the bill’s formulas were developed so that schools in economically disadvantaged districts may see the greatest potential gains:
- Compensatory Education allotment: weighted to provide more for students with greater need, so schools with more economically disadvantaged students receive more.
- Full-day pre-K: benefits families of young children who may struggle most to afford early education.
- CCMR outcomes bonus: pays more for economically disadvantaged graduates than for others.
03 — The Catch
What’s the Catch?
Funding offered through HB 3 isn’t automatic. Districts must meet specific requirements, including:
REPORTINGAnnual reporting from a qualified coordinator
GOALSQuantifiable five-year goals for each school
REVIEWAn annual review by the board at a public meeting
For example, all school boards must adopt early childhood literacy and math plans. These include annual goals for aggregate student growth on third-grade math and reading State of Texas Assessments of Academic Readiness (STAAR), along with targets for students of certain demographics, classroom teacher performance, and students in bilingual or ESL programs.
Schools must also adopt CCMR plans, which include annual goals for aggregate student growth. A certain percentage of students in certain demographics must also meet annual targets. Failing to meet these targets or submit reports adequately could reduce bonus HB 3 funding.
Capturing much of this funding requires significant administrative lift that can be a struggle for some schools. For example, earning TIA funding requires clear, reliable data showing student growth that must be tracked and verified, a significant burden for a school without ample support.
04 — The Gaps
Where Districts Fall Short
Schools lose much of the funding they could earn from HB 3 because of administrative missteps, such as not tracking annual goals at the campus level.
Districts can miss out on CCMR benefits if they don’t actively monitor indicators of success throughout the year.
Waiting until STAAR and graduation data are posted is too late to course-correct.
Additionally, year-long delays in TIA designations can cause frustration, and teachers who leave the school or district after applying must restart the process, costing schools additional funding. Qualifying for TIA designations also requires regular, data-validated reporting on student performance, which can be difficult to track.
05 — The Fix
What Districts Need To Do To Capture More
Despite these hurdles, schools can still capture more of the funding available. Potential solutions include:
1
Track CCMR in real time throughout the year, rather than relying on year-end reports.
2
Align board goals with campus-level data reviews.
3
Invest in the TIA teacher pipeline and support certification so teachers feel rewarded while awaiting designation approval.
4
Monitor and validate student performance data to support TIA designation.
5
Build professional development into literacy plans for kindergarten-through-third-grade teachers.
06 — How We Help
How Economic Mobility Center Helps
The Economic Mobility Center (EMC) can help districts close the gap between missed funding and maximum gains by supporting and easing the administrative process. EMC offers tools and programs to optimize tracking of student outcomes and streamline the pathway between K-12 and higher education, helping meet both early childhood and CCMR goals. Qualifying for TIA funding often requires proof of student growth that is actively tracked and validated, which EMC can help support while reducing administrative burden.
HB 3 requirements are often difficult to translate into actionable goals, but EMC can help districts turn them into measurable progress schools can act on.
Let’s Talk
Join the Conversation with EMC
Partnering with EMC can make a considerable difference in earning available funding and improving the pathway students have from K-12 to higher education. By using EMC’s resources and programs, schools can reduce the burden of data tracking and validation and focus on the annual goals needed to capture the funds HB 3 has left on the table.
Learn more about EMC, including the benefits of becoming a partner, and reach out to start a discussion.
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