According to the Legislative Budget Board (LBB), HB 3622 would have a negative fiscal impact of $25.6 million on General Revenue-Related Funds for the 2026–27 biennium. The bill does not itself appropriate money, but it could create the statutory basis for future appropriations needed to implement its school-finance changes.

The recurring cost is estimated at about $12.8 million per fiscal year from fiscal year 2026 through fiscal year 2030. Those costs would flow through the Foundation School Program and are driven by two main changes: revising the average daily attendance calculation for students in the Optional Flexible School Day Program and increasing the dropout recovery school and residential placement facility allotment to $500 per student in average daily attendance.

The estimate is based on Texas Education Agency assumptions that approximately 670 students in ADA participate in the Optional Flexible School Day Program and that removing the reporting-period limitation would increase ADA for that group by 50 percent. TEA also assumes that about 45,700 ADA currently participate in dropout recovery school and residential placement facility programs and would receive the increased allotment.

For local governments, the bill would increase funding to local education agencies. LEAs would receive additional funding for Optional Flexible School Day Program students and for students participating in dropout recovery school and residential placement facility programs. The LBB also estimates reduced recapture payments of about $1.4 million per year, which is included in the total Foundation School Program cost estimate.

Texas Policy Research recommends that lawmakers vote NO on HB 3622. The bill addresses a sympathetic policy area, students at risk of dropping out, but it does so by increasing recurring state funding through the public school finance system rather than by requiring better performance from existing education dollars or reducing barriers to alternative education models.

The bill would grow the fiscal scope of state government by expanding obligations under the Foundation School Program. It increases the dropout recovery school and residential placement facility allotment from $275 to $500 per qualifying student in average daily attendance and changes the way average daily attendance is calculated for students in optional flexible school day programs. The Legislative Budget Board estimates that the bill would have a negative impact of $25.6 million to General Revenue-Related Funds for the 2026–27 biennium, with recurring annual costs of roughly $12.8 million through fiscal year 2030.

That fiscal impact increases the burden on taxpayers because the bill creates a new, ongoing claim on state education funding. Although the bill does not make a direct appropriation, the LBB notes that it could provide the legal basis for appropriations needed to implement the bill. In practical terms, this means the Legislature would be expanding formula-driven public school spending at a time when many lawmakers and taxpayers are already concerned that public schools have received substantial funding increases without commensurate improvements in outcomes.

The bill does not appear to impose a new regulatory burden on individuals or private businesses. The bill analysis states that it does not expressly create a criminal offense, increase criminal penalties, change eligibility for community supervision, parole, or mandatory supervision, or expressly grant additional rulemaking authority. Its primary liberty concern is therefore not direct regulation, but government growth, taxpayer exposure, and precedent.

The accountability concern is significant. The bill increases public funding for dropout recovery and related programs, but it does not condition the additional funding on measurable results such as credit recovery, re-enrollment, graduation, workforce placement, or long-term student outcomes. It also does not include a sunset, spending cap, or reporting requirement sufficient to ensure that the additional taxpayer dollars produce better performance.

A limited-government approach would require schools and participating programs to demonstrate results before receiving additional recurring formula funding. The state should not continue layering new allotments onto the Foundation School Program without first addressing whether existing public education funding is being used effectively. The central objection is that the bill expands taxpayer-funded public school finance formulas without adequate limits, offsets, or outcome-based accountability.

For these reasons, HB 3622 should be opposed. While helping at-risk students remain engaged in education is a valid public concern, this bill relies on more state spending rather than structural reform, fiscal restraint, or performance-based accountability.