Opinion / Advocacy – Texas boasts one of the largest public education systems in the nation, serving over 5.5 million students across more than 1,200 school districts. Yet, the way we fund our K-12 schools remains a patchwork of state contributions and local property taxes—a dual mechanism that perpetuates inequities, burdens homeowners, and complicates accountability. As we navigate fiscal year 2025, with state coffers bolstered by economic growth, it’s time to advocate for a bold reform: eliminating school property taxes entirely and providing 100% of K-12 funding through state sources. This shift would promote fairness, streamline administration, and ensure every Texas child has access to quality education regardless of their zip code.
The Dual Funding Mechanism: A System Ripe for Reform
Texas’s K-12 funding operates under a dual structure, blending state and local revenues to meet the constitutional mandate for a “general diffusion of knowledge.” At its core is the Foundation School Program (FSP), which calculates a baseline funding level per student and divides the responsibility between the state and local districts.
- State Share: The state provides funding through formulas that account for student needs, such as special education or economically disadvantaged populations. This includes “Tier 1” funding for basic allotments and “Tier 2” for enrichment. The state aims to equalize funding by reducing aid to wealthier districts and recapturing excess local revenue—often called the “Robin Hood” system—to redistribute to poorer ones.
- Local Share: School districts levy property taxes on residential and commercial properties within their boundaries to cover the remainder. These taxes fund operations, maintenance, and sometimes debt for facilities. Local contributions typically make up 50-60% of total K-12 funding, with the state covering the balance plus federal aid (around 10-18%). This local reliance creates disparities: Wealthy districts with high property values generate more revenue at lower tax rates, while property-poor districts struggle even with higher rates.
This dual approach, rooted in laws like Chapter 48 of the Texas Education Code, was designed to balance local control with state oversight. However, it has led to persistent inequities. In FY 2025, the average funding per student is approximately $15,503, covering teacher salaries, student services, and operations. But this figure masks wide variations—some districts receive far more due to robust local tax bases, while others rely heavily on state aid amid rising property values that outpace homeowner incomes.
Critics argue the system is outdated, especially with Texas’s booming population and economy. The “Robin Hood” recapture mechanism alone is projected to collect nearly $5 billion from districts in 2025, redistributing it statewide. While intended to promote equity, it often feels punitive to growing suburbs and fails to fully address underfunded rural or urban schools.
State-Administered Programs: The Backbone of Current Funding
Drawing from the Texas Education Compensation 2025 spreadsheet—a detailed ledger of state appropriations—the state’s role in K-12 funding is substantial, totaling an estimated $38.4 billion in FY 2025. These funds are administered primarily through the Texas Education Agency (TEA) and flow via targeted programs. Here’s a breakdown of key state-administered initiatives based on the data:
- School Apportionment – Foundation Program (Object Code 7602): The largest slice at approximately $30.1 billion, this is the core of the FSP. It includes $26.98 billion from the Foundation School Fund and $3.11 billion from the Available School Fund, ensuring baseline per-student allotments adjusted for district needs.
- Grants to Elementary and Secondary Schools (Object Code 7601): Around $7.9 billion, encompassing federal pass-throughs like $3.84 billion from Health/Ed/Welfare funds (e.g., Title I for low-income students) and $2.81 billion from the Federal School Lunch program. State contributions add $745 million from general revenue and $397 million from instructional materials funds.
- Payments/Grants to Counties and Other Political Subdivisions (Object Codes 7612/7613): About $434 million, including $168.5 million in federal grants to subdivisions and $194.5 million in state general revenue for various local supports, such as compensatory education.
- Grants – Community Service Programs (Object Code 7623): $43.97 million from TEA’s general revenue, supporting extracurricular and community-based initiatives.
These programs highlight the state’s commitment, but they only tell half the story. The spreadsheet excludes local revenues, focusing solely on state and federal disbursements.
The Hidden Burden: Local Property Taxes Fill the Gaps
While the state provides a significant portion, local property taxes shoulder 50-60% of the load—estimated at $30-35 billion annually in recent years. In FY 2023, total property tax collections statewide exceeded $81.4 billion, with nearly half ($39.5 billion) going to school districts. Projections for FY 2025 suggest similar or higher figures, driven by rising property values despite recent relief efforts. For instance, the TEA reports that combined state and local FSP revenue per student reached $13,405 in FY 2025, up 49% from 2014, with locals contributing heavily.
This reliance on property taxes exacerbates issues: Homeowners in high-value areas face skyrocketing bills, while commercial properties often benefit from abatements. In 2025, despite $51 billion allocated for property tax cuts over two years—including $17.5 billion for rate compression and increased homestead exemptions—local taxes remain a core funding source. These measures provide partial relief, such as raising senior exemptions to $200,000 (effectively eliminating school taxes for many elderly Texans), but fall short of systemic change.
The Case for 100% State Funding: Equity, Efficiency, and Economic Sense
It’s time to eliminate school property taxes and fund K-12 entirely through state sources. Texas has the resources: Lawmakers entered the 2025 session with at least $21 billion in available general revenue and $23 billion in the Economic Stabilization Fund. Shifting the full burden to the state—potentially via sales taxes, severance taxes on energy, or reallocating surplus—would yield transformative benefits:
- Promoting Equity: Ending local taxes would dismantle disparities tied to property wealth. No more “Robin Hood” recapture draining billions from districts; instead, a uniform state formula ensures consistent funding statewide.
- Relieving Homeowners: Property taxes are regressive, hitting fixed-income families hardest. Full elimination could save the average homeowner thousands annually, boosting economic mobility and homeownership.
- Simplifying Administration: Districts could focus on education rather than tax collection. The state already handles major programs efficiently—expanding this to 100% would reduce bureaucratic overlap.
- Investing in the Future: With a $10 billion funding boost in 2025 (including a $55 per-student increase), Texas schools are improving, but tying it to property relief would amplify impact. Proposals like House Bill 9 (exempting business personal property) and constitutional amendments for higher exemptions show momentum toward relief—why not go further?
Critics may cite costs, but with projections of sustained revenue growth, Texas can afford it. States like Vermont and Hawaii have minimized local taxes for schools with positive results. In Texas, this reform would honor our commitment to education while unburdening taxpayers.
Conclusion: A Call to Action for 100% State-Funded Schools
Texas’s dual funding model has served its purpose, but in 2025, it’s clear we can do better. By leveraging the state’s robust programs and surplus, eliminating school property taxes is not just feasible—it’s essential for a fairer, more efficient system. Lawmakers should prioritize this in future sessions, ensuring every student’s potential isn’t limited by local tax rolls. The future of Texas education depends on it.