Texas’ Billion-Dollar Surplus In Limbo, While Education Funding Wanes

At the beginning of this year Texas made history boasting a staggering $32.7 billion surplus. Later, in October Comptroller Glenn Hegar unveiled an unforeseen windfall of $6.4 billion in state coffers due to an unexpected surge in revenue in recent months.

The updated comptroller’s report revises the anticipated revenue available over the 2024-25 cycle from the initially projected $188.2 billion, as assumed during the budget passage in May, to an impressive $194.6 billion.

These financial revelations emerged just ahead of the third special session, convened to address Gov. Greg Abbott’s top priority: the passage of vouchers. As we now find ourselves in the waning days of the fourth special session, the urgency surrounding this crucial agenda remains unabated. 

Back in September, Comptroller Hegar urged lawmakers to take advantage of the revenue increase and invest in public education.“We need to invest in our teachers. We need to invest in those that are front line, that are educating the future workforce.”

Despite the passage of one regular session and four subsequent special sessions, no comprehensive education bill has made it to Abbott’s desk.The impasse can be attributed primarily to the Governor’s unwavering insistence that public education funding and the concept of “school choice” must be inherently intertwined.

This hostage situation has been the downfall of several proposals. During the regular session, a bill that approved $4.5 billion in new spending for schools to use for programs like teacher pay raises, died thanks to vouchers. And currently during the fourth special session, House Bill 1, an omnibus education bill finds itself at an impasse, since the Texas House voted to eliminate the contentious school voucher provision.

Given Abbott’s unwavering stance against passing education bills that lack provisions for vouchers and the resistance from Texas House Democrats and rural Republicans who voted against such inclusions, it appears probable that the legislative session will conclude with surplus funds remaining untouched in state coffers.

As Texas legislators grapple with a failure to allocate funds, the two-year budget cycle is poised to conclude with a surplus exceeding $18 billion, according to Comptroller Hegar’s latest revenue estimate. What happens to these surplus funds?

“Basically, if they don’t use the money, the Legislature can keep the surplus in the piggy bank until the next biennial budget,” Brandon Rottinghaus, political scientist at the University of Houston, told RA News. “This sounds good in theory but the state has several spending limits that restrict how much can be spent absent a vote to shirk one or more of the legal limits.”

In Texas, for example, there is a constitutional spending limit, often referred to as the “spending cap.” The Texas Constitution limits the amount of additional money the state can spend every two-year budget cycle to the rate of the state’s economic growth.

Rottinghaus also states that although the Governor could move around some of the money allocated to specific agencies, like the Department of Public Safety, most of this surplus money has to be allocated by the Legislature before it can be moved by the Governor or anyone.

As lawmakers grapple with the challenge of passing education funding despite ample resources available in state coffers, public school districts across Texas find themselves in a financial bind, stretching every last dime to try to give their employees a small raise.

To do so, they are eliminating lunchroom monitors, reducing counselors, and laying off other support staff positions that make schools run smoothly. They are closing cafeterias, arts programs, and CTE programs. They are passing deficit budgets and facing financial ruin.

The paradox of surplus funds at the state level and the financial strain experienced by local school districts is not escaping the attention of advocates and school staff across the state.

“Our state government has enough money to fully fund our schools and give all Texas school employees a much-needed raise. But we don’t have enough money to do any of that if the politicians in Austin decide to defund your neighborhood schools through private school voucher scams,” wrote the Texas American Federation of Teachers (AFT.)

“We will not accept a “deal” or a “compromise” on vouchers. Our kids deserve schools fully funded to help them thrive — no strings attached. Our paychecks deserve the same.”