How Texas schools are funded: Understanding attendance-based funding

There is a common misconception that school funding in Texas is determined by student performance on the State of Texas Assessments of Academic Readiness, or STAAR. This is understandable given the emphasis on standardized testing in American schools. However, this assessment does not impact funding for primary and secondary education.

What Role Does STAAR Play in Texas Education?

In the past, the Texas Legislature has proposed funding schools based on standardized test scores to encourage better academic performance and responsible budgeting, but this practice is only used for community colleges.

STAAR, however, contributes to accountability ratings in primary and secondary schools. The ratings measure student progress and school needs, but they do not impact funding.

How Are Texas Schools Funded?

School funding in Texas follows an attendance-based model, in which each school is allocated a set amount of money per enrolled student. Students are then counted for each day they attend school, but not for absences.

Schools with a higher Average Daily Attendance (ADA) receive more funding, while schools with lower ADA receive less.

Although school funds in Texas have increased based on enrollment rates and needs, the funds per individual student have decreased. For example, schools in lower-income areas, which typically need more support, are supposed to receive more per student than schools that require less. However, lower-income schools often have lower attendance rates, so they still receive less money than higher-income schools.

Why Does Texas Use Attendance-Based Funding?

The use of this model stems from the belief that it encourages schools to find solutions that will increase their ADA. The idea is that schools will be rewarded for their efforts.

Why Is Attendance-Based Funding Controversial?

Attendance-based funding is controversial because the loss of money from student absences prevents schools from providing enough resources. Funding gaps harm low-income districts as well as students of color and students with disabilities. Many factors that prevent students from coming to school are external and beyond their control.

What Is the Alternative to Attendance-Based Funding?

Attendance-based funding is not the norm in the United States. Most states use an enrollment-based system, in which every enrolled student is counted daily, regardless of attendance. If Texas switched to this model, schools would have more money to support students who struggle with attendance. The Legislature has discussed this possibility multiple times, though the change has not yet been made.