HB 3

Status: Signed by governor
Author: Rep. Dan Huberty
Sponsor: Sen. Larry Taylor
Summary: School finance reform bill

School finance/taxes

Increases the basic allotment by 20%, from $5,140 per student to $6,160.

Reduces recapture ("Robin Hood" redistribution of funds from property-wealth districts) by $3.5 billion from what would have been paid during the 2020-21 biennium.

Increases the state's share of school funding from 38% to 45%.

Repeals the cost of education index, the high school allotment, and the gifted/talented weight. Adds a dyslexia weight of .10.

Compresses school district tax rates lowering them an average of 8 cents in 2020 and 13 cents in 2021. A 2.5% cap would be placed on appraised values in 2021 to slow growth. If a district proposes to hold a tax rollback election to increase rates beyond the cap, it must first conduct an efficiency audit of district spending.

Teacher compensation

Districts are required to use 30% of the increase in their funding to increase compensation and/or benefits for nonadministrative employees, prioritizing differentiated compensation for classroom teachers with more than five years of experience. Of the percentage dedicated to compensation, 75% must be used on teachers, counselors, nurses and librarians; the remainder can go to any non-administrative employees.

What exactly is meant by "prioritize" and "differentiated" will be left up to districts. There is no requirement or guarantee that any specific employees will get any increase. The bill specifies that "compensation" can include assistance with health insurance premiums.

Due to the increase in the basic allotment, each step of the state minimum salary schedule will increase by nearly 20%.

Years of
annual minimum
salary schedule
NEW 2019-20
annual minimum
salary schedule
0 $28,080 $33,660
1 $28,690 $34,390
2 $29,290 $35,100
3 $28,890 $35,830
4 $31,170 $37,350
5 $32,440 $38,880
6 $33,720 $40,410
7 $34,900 $41,830
8 $36,020 $43,170
9 $37,080 $44,440
10 $38,080 $45,630
11 $39,020 $46,770
12 $39,930 $47,850
13 $40,760 $48,850
14 $41,560 $49,810
15 $42,310 $50,710
16 $43,030 $51,570
17 $43,700 $52,370
18 $44,340 $53,140
19 $44,940 $53,860
20+ $45,510 $54,540

Merit pay

Funding is available for districts to use for an optional merit pay program, under which districts can designate certified teachers as a master, exemplary or recognized teacher for a five-year period. The commissioner of education would establish performance and validity standards for each local designation system. The standards could not require a district to use statewide standardized accountability tests to evaluate teacher performance for this purpose, but the bill does not prohibit a district from using such tests as part of the merit pay model. The commissioner has estimated that about $140 million would be spent on this program for the upcoming biennium.

The commissioner will enter into an agreement with Texas Tech University to monitor the quality and fairness of the local designation systems. Participating districts will receive a base amount of $12,000 for master teachers, $6,000 for exemplary teachers, and $3,000 for recognized teachers, but those amounts would be increased by factors in certain areas, such as rural districts and high needs campuses.

The bill does not require (or prohibit) that funding go to the teachers earning such designations; rather, it provides that 90 percent of the allotment must be spent on compensation for teachers working at the designated teacher’s campus.

Other pay

The bill provides funding for mentor teacher programs, including an opportunity for mentor teachers to receive additional compensation, which has been a priority for TCTA. The bill also funds an additional 30 half-days of school in the summer, so teachers in districts taking advantage of that option could receive extra pay for that time.


  • Funds full-day preK for low-income students.
  • Provides funding for an optional extra 30 days in the school year for elementary schools.
  • Includes $8 million for a teacher mentoring program.
  • Extends career/tech funding to include 7th grade.
  • Includes a weight for economically disadvantaged or limited English proficient students in bilingual or special education programs in preK - 3 for improved performance in math and reading.
  • Includes outcomes-based funding increases for reaching goals in career, college and military readiness. 

(Click here to return to the 2019 session bill summary page.)