According to the Legislative Budget Board (LBB), HB 2 is projected to have a significant fiscal impact on the state, resulting in an estimated net cost of approximately $7.76 billion over the 2026–2027 biennium. The majority of this cost stems from enhancements and expansions to public school finance mechanisms, including increases to the Basic Allotment, modifications to various weighted funding allotments, and a wide array of new and expanded grant programs aimed at teacher recruitment, student support, and special education services​.

Among the most financially impactful provisions is the increase in the Basic Allotment from $6,160 to $6,555 per student, which drives a higher overall entitlement level for school districts and necessitates proportional state aid. This increase also triggers mandated salary increases for teachers and other district staff, requiring that 40% of new funding be dedicated to compensation, with the majority going to classroom teachers. Additionally, recaptured revenue (payments by property-wealthy districts back to the state) is projected to decrease significantly—by over $480 million in FY 2026 alone—due to the changes in the funding formulas.

The bill also includes major new state expenditures in special education. A restructured special education funding model will provide an estimated $800 million in additional funding for FY 2026, along with a tiered allotment structure and additional grants for evaluations and services. These efforts aim to address past underfunding and federal compliance issues. The bill also introduces grant programs for dyslexia training, parental engagement, technical assistance, and educator pipelines—all requiring new or expanded administrative capacity, including 27 new FTEs at the Texas Education Agency (TEA)​.

On top of education funding, the bill establishes several grant programs that have fixed or scalable costs depending on legislative appropriation. These include the Employed Retiree Educator Reimbursement Program, various teacher preparation grants, and planning grants for extended school years. Some programs, such as those related to special education service group allotments and transitional funding, have costs that cannot yet be determined and will depend on rulemaking and future appropriations.

In summary, while  HB 2 advances numerous education initiatives, it does so at a substantial fiscal cost, with multi-billion dollar impacts on the Foundation School Program and state general revenue. The bill is a major financial commitment to educational equity, educator workforce development, and student outcomes across Texas.

Texas Policy Research recommends that lawmakers vote NO on HB 2, based on serious concerns about the scale of new funding, the lack of safeguards ensuring those dollars reach classroom teachers, and the reinforcement of systemic inefficiencies in Texas public education.

The most pressing issue is the unprecedented level of state spending this bill would authorize—over $7.7 billion in general revenue during the 2026–2027 biennium alone. While some targeted investment in education is justifiable, this bill floods a system that has repeatedly demonstrated poor financial stewardship with more money than ever before. The absence of structural reforms or measurable accountability mechanisms makes it unlikely that the outcomes will justify the investment. Throwing money at a broken model, without evidence of its ability to translate dollars into results, is not sound public policy.

Equally concerning is how HB 2 allocates and distributes that funding. The bill mandates that only 40% of the increased basic allotment must be used for compensation to full-time employees, and of that, only 75% is reserved for teachers. That leaves a large portion of the funding—potentially billions—open to administrative and support staff use, with no explicit requirement that it materially improve classroom instruction. The result is a fiscal structure that is ripe for exploitation: districts may grow payrolls, expand non-instructional departments, and award raises to mid- and upper-level staff while classroom teachers continue to bear the weight of under-resourcing.

This concern is magnified by the fact that the bill expands multiple grant programs, incentive schemes, and technical assistance initiatives—many of which will require additional layers of administration and oversight, not less. Rather than streamlining the delivery of educational services or putting resources directly in the hands of educators, the bill builds out the bureaucratic apparatus that has long diverted dollars away from the front lines of education. Teachers are once again promised support but given little assurance they will actually receive it.

Furthermore, while the bill introduces performance-based funding mechanisms (such as the enhanced Teacher Incentive Allotment), these are limited in scope, heavily reliant on district capacity, and unlikely to reach educators in under-resourced or rural areas where support is needed most. Teachers who work hard but are in districts without the infrastructure to implement complex designation systems may never benefit.

In sum, HB 2 offers no credible guarantee that its massive funding increase will reach those it purports to support. It does not fix the mechanisms by which dollars are misallocated. Instead, it risks further entrenching the very inefficiencies and misprioritizations that have undermined public education outcomes in Texas for years.

A NO vote is not a rejection of public education or support for teachers—it is a rejection of pouring billions more into a system that lacks the accountability, discipline, and prioritization needed to deliver results. Until meaningful reforms are implemented to ensure funds reach the classroom first, this bill does not merit passage.

• Individual Liberty: The bill includes elements that are ostensibly pro-choice in education, such as increased support for charter schools, expanded access to prekindergarten through public-private partnerships, and parent-directed services grants for special education. These initiatives suggest a desire to empower families with more options and tailor education to student needs. However, the liberty gain is marginal: most of the structural funding and control remain squarely within the public education system. Parents do not gain direct control over per-pupil funding in any meaningful way outside of the narrow confines of special education. Without broader portability or genuine school choice mechanisms, the bill largely keeps educational liberty confined within state-defined parameters.

• Personal Responsibility: The bill does include incentives tied to performance, especially with the expansion of the Teacher Incentive Allotment (TIA) and teacher designation systems. These performance-based funding streams theoretically reward effort and achievement. However, because implementation is heavily reliant on district capacity—and much of the funding is not performance-linked—these programs may continue to reward institutions rather than individuals. Furthermore, districts that fail to administer designations equitably may disadvantage effective teachers, and the heavy state role in defining acceptable use of funds removes much of the decision-making responsibility from educators and school communities.

• Free Enterprise: The bill makes some room for free-market principles by allowing for community-based partnerships in pre-K and by expanding charter facility funding, including bonds for property acquisition and development. These provisions may foster entrepreneurial activity in educational services and facilities development. However, this openness is undermined by the overall size and scope of government spending, which may distort market signals and crowd out private education alternatives. The bill grows the state’s footprint significantly, including multiple new grants and allotments, all centrally controlled. As such, the net effect is a state-managed marketplace, not a truly free one.

• Private Property Rights: The bill repeals a requirement that charter schools certify they are not engaging in real estate transactions that benefit board members or staff in order to be considered a school district for zoning and development purposes. While this change may reduce paperwork, it removes a transparency safeguard. Additionally, by treating charter schools like ISDs for land use purposes, HB 2 may preempt local zoning authority and override some community land-use decisions, raising questions about property rights and neighborhood governance. There is little direct advancement of property rights and some erosion of local control in how property is regulated.

• Limited Government: This is where the bill most starkly violates liberty principles. It creates or expands nearly two dozen new funding mechanisms, grant programs, mandates, and technical assistance arms under the Texas Education Agency. It authorizes billions of new state spending and layers on substantial bureaucratic responsibility, all without significant rollback or streamlining of current systems. The bill fails to correct inefficiencies in public education—it simply injects more resources into the same flawed pipelines. It also gives the Commissioner of Education significant discretionary authority, including the ability to determine funding levels, compliance structures, and even modify funding rules without legislative approval in certain cases. The sheer size and complexity of this legislation stand in direct opposition to the principle of limited government. It makes education more centralized, more expensive, and more dependent on state-managed systems than ever before.