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House and Senate lawmakers are poised to announce a deal on an $8.5 billion funding package for Texas public schools that would preserve the upper chamber’s push for a modest $55 per–student increase to districts’ base funding, while giving schools more than $1 billion to pay for fixed costs like utilities and transportation.

The deal, confirmed by three lawmakers familiar with the discussions, appears to strike a face-saving compromise for both chambers, which had been divided by the House’s bid to give schools a bigger increase in base per-student funding and the Senate’s desire to more narrowly prioritize teacher pay raises.

The package in House Bill 2 would be a historic investment in public schools, though school administrators and advocates say it is long overdue, pointing to the budget shortfalls facing districts across the state amid inflationary pressures and six years of stagnant base per-student funding.

Much of that funding, known as the basic allotment, is used to pay the salaries of full-time district employees, not just teachers. The funding also gives districts flexibility to pay for a range of other needs, including insurance, maintenance and instructional materials.

Rather than raising the basic allotment beyond the $55 proposed by the Senate, the latest deal would set aside $1.2 billion for a fund to cover some fixed costs, lawmakers said — essentially providing a different way to give districts the spending flexibility they had hoped for.

A Republican source familiar with the negotiations said the deal would also include $4.2 billion to hike teacher pay and $500 million for raises for other school employees. It also includes $100 million for windstorm property insurance for coastal districts. School districts view property insurance as one of the hardest costs to control, according to a recent survey by the Texas Association of School Business Officials.

Details of the negotiations were first reported by The Dallas Morning News. The full legislation has yet to be released publicly.

Rep. Brad Buckley, chair of the House Public Education Committee, told reporters on Wednesday that he believes the new bill will address factors directly driving up education costs while prioritizing classroom needs.

“It’s about safe schools. It’s about early education — early literacy and numeracy — to make sure those kids learn more. It’s about career and technical education, and then it’s about investing in our teachers,” the Salado Republican said. “We know that the best way to get great outcomes is to have great teachers in front of a class, and this will incentivize them to stay in the classroom, perfect their craft and become the best professionals they can be.”

A previous House proposal had sought to boost the basic allotment from $6,160 to $6,555 per student. Senators, however, wanted a more modest basic allotment increase and to give educators raises through the following system:

• Teachers with 3-4 years of experience in school districts with 5,000 or fewer students would receive a $5,000 raise, while those with five or more years of teaching on their resume would earn $10,000.
• Teachers with 3-4 of experience in school districts with more than 5,000 students would earn a $2,500 raise, while those with five or more years of experience would receive $5,500.

The Senate’s funding proposal would exclude raises for first- and second-year instructors and other essential employees, like bus drivers, cooks, librarians and nurses.

Direct state investment in teacher salaries, senators argued, would free up districts to use more of their base funding elsewhere, including salaries for support staff and campus maintenance. But that argument has not gone over well with school leaders, many of whom have adopted budget deficits in droves and are considering closing schools in no small part because of soaring inflation and stagnant funding.

Rep. Gene Wu, the Houston Democrat who chairs the House Democratic Caucus, told The Texas Tribune on Wednesday that based on what he has heard about the bill details so far, “the Senate’s getting everything that they wanted.”

“The original HB 2 was like a four-month negotiation among all the stakeholders to find a bill that does what it’s supposed to do for all school districts, which is keep everyone afloat for now,” Wu said. “They’ve gone and purposely done things that basically people have asked them not to do.”

This is a developing story; check back for details.

Rob Reid contributed to this story.

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