A report from Rice University’s Kinder Institute shows that more than 73% of Texas schools are underfunded

Houston – More than 73 percent of Texas school districts are underfunded, according to a new study from Rice University’s Kinder Institute for Urban Research.

The report, released Monday, found that schools with larger funding gaps typically have lower student performance ratings according to the Texas Education Agency (TEA).

The report integrates TEA student performance ratings with data from the School Funding Indicator Database, released in April. This database estimates funding gaps for nearly every school district in the country. About 17% of Texas school districts are considered “severely” underfunded, with funding gaps exceeding 40% of their needs. Many school districts in the Houston area are among this group.

Despite a slight increase in per-pupil funding in Texas since 2020, inflation and recapture payments have effectively wiped out these gains. The Kinder Institute says current funding is equivalent to what it was in 2014. As a result, many Texas school districts face significant budget shortfalls, even after efforts to improve efficiency.

Severely underfunded districts are strongly associated with TEA student achievement scores of C or below, which are rated on an AF scale. This pattern holds across multiple types of districts, including rural, urban, and suburban. The likelihood of these districts receiving an A or B grade drops significantly when their funding shortfall exceeds 40%, indicating they are in critical need of support.

The report concludes that addressing funding gaps in Texas’ most underfunded districts could substantially increase their chances of achieving higher TEA student performance scores. Without adequate financial support, even the most effective teaching practices are unlikely to succeed. With adequate funding, efforts to improve student performance can become effective and sustainable.