Overall Vote Recommendation

Vote No; Amend

Principle Criteria

Free Enterprise

Property Rights

Personal Responsibility

Limited Government

Individual Liberty

In Layman's Terms

SB 26 expands Texas's teacher incentive programs by adding new performance-based teacher designations, increasing merit pay opportunities, and creating incentives for schools that adopt performance-based evaluation and compensation systems. The committee substitute also adds teacher retention funding, liability insurance, and other teacher benefits while increasing state oversight of educator compensation.

Digest

Senate Bill 26 (SB 26) reforms Texas’ public education system by modifying teacher designations, restructuring compensation models, and incentivizing performance-based staffing decisions. The bill expands the existing teacher classification system to include a new "Acknowledged Teacher" designation, allowing school districts and charter schools to recognize educators based on single-year or multi-year performance appraisals. This builds upon the Teacher Incentive Allotment (TIA) system, which rewards teachers based on effectiveness and classroom impact. Additionally, SB 26 establishes Enhanced Teacher Incentive Allotment (ETIA) schools, granting additional funding to districts that implement comprehensive evaluation and compensation systems for teachers and principals based on performance.

Under SB 26, ETIA schools must adopt a strategic evaluation system for principals and assistant principals and implement a performance-based compensation model, replacing automatic across-the-board salary increases with merit-based pay scales. While periodic inflation adjustments remain permissible, school districts must tie salary differentials to teacher effectiveness rather than tenure. The bill also requires districts to develop a teacher placement strategy, ensuring that highly effective educators are assigned to high-need campuses to address educational disparities.

Additionally, the bill grants the Texas Education Commissioner new oversight authority to designate and remove ETIA schools based on compliance with these performance-based measures. While proponents argue this system incentivizes teacher excellence and prioritizes student outcomes, critics raise concerns about increased state control over teacher compensation and hiring decisions. SB 26 represents a shift toward state-directed education reform, emphasizing accountability and targeted resource allocation in Texas public schools.

The Committee Substitute for Senate Bill 26 (CSSB 26) introduces significant modifications to the original version, expanding teacher incentive programs, restructuring compensation models, and increasing state oversight of school funding and teacher placement. One of the most notable additions is the creation of a fourth teacher designation, "Acknowledged Teacher," which broadens eligibility for performance-based incentive funding. The bill also establishes Enhanced Teacher Incentive Allotment (ETIA) schools, which receive additional funding if they implement comprehensive performance-based evaluation and compensation systems for both teachers and administrators.

A major change in the substitute version is the removal of across-the-board salary increases, replacing them with strictly performance-based compensation, with only inflation adjustments permitted. The bill raises funding amounts for designated teachers under the Teacher Incentive Allotment (TIA), increasing the maximum potential incentives for Master, Exemplary, and Recognized Teachers, while adding a new tier for Acknowledged Teachers. Additionally, the substitute introduces a Teacher Retention Allotment, providing extra compensation for experienced teachers, particularly in smaller school districts.

Other key changes include:

A grant program to assist school districts in developing local teacher designation systems.
State-funded liability insurance for teachers.
Expanded pre-kindergarten eligibility for the children of public school teachers.

The implementation timeline is also adjusted, with most financial provisions set to take effect on September 1, 2025. Overall, the committee substitute strengthens state oversight of teacher pay and performance incentives while reducing local control over salary structures and hiring practices.

Author (1)

Brandon Creighton

Co-Author (19)

Carol Alvarado

Paul Bettencourt

Brian Birdwell

Cesar Blanco

Donna Campbell

Juan Hinojosa

Joan Huffman

Bryan Hughes

Lois Kolkhorst

Jose Menendez

Mayes Middleton

Borris Miles

Robert Nichols

Tan Parker

Angela Paxton

Charles Perry

Charles Schwertner

Royce West

Judith Zaffirini

Contact the Author

Sen. Brandon Creighton

Capitol Phone:

(512) 463-0104

Capitol Office:

EXT E1.606

E-Mail:

[email protected]

Visit Official Website

Fiscal Notes

Senate Bill 26 (SB 26) is expected to have a substantial fiscal impact on Texas’ General Revenue and the Foundation School Program (FSP), with an estimated negative impact of $4.35 billion over the biennium ending August 2027. The annual cost burden escalates over time, starting at $2.08 billion in FY 2026 and $2.26 billion in FY 2027, rising to $3.64 billion by FY 2030. The primary cost drivers include increased teacher compensation under the Teacher Incentive Allotment (TIA), the establishment of Enhanced Teacher Incentive Allotment (ETIA) schools, and additional funding for teacher retention and recruitment in high-need campuses. Additionally, expanding pre-kindergarten eligibility to include children of public school teachers adds further costs to the state’s education budget.

The Texas Education Agency (TEA) will require additional resources to implement the bill, including $15 million annually for technical assistance related to TIA, $30 million annually for the Local Optional Teacher Designation Grant Program, and state-subsidized liability insurance for teachers, which is expected to cost $1.7 million in FY 2027, increasing to $6.8 million by FY 2030. The Teacher Retirement System (TRS) will also require additional state contributions, starting at $26.6 million in FY 2026 and increasing to $38.3 million in FY 2030. To support these initiatives, TEA will need 11 additional full-time employees (FTEs), adding an estimated $1.4 million in administrative costs.

Given the record-high spending on public education, much of which already goes toward non-instructional costs, SB 26 represents a significant expansion of state education expenditures without requiring reallocation of existing resources to prioritize teacher pay.

Vote Recommendation Notes

SB 26 increases teacher pay based on merit, which is a positive step toward rewarding performance over tenure. However, the bill relies on additional state funding rather than reallocating existing resources, contradicting principles of fiscal responsibility. Texas is already spending record-breaking amounts on public education, yet a significant portion of these funds is directed toward administrative costs rather than classroom instruction. Instead of expanding spending, the legislature should focus on redirecting existing resources from bureaucracy to teacher salaries to ensure education dollars are prioritized where they have the most impact.

Additionally, the bill introduces new funding classifications and teacher designations, adding bureaucracy instead of simplifying how education funds are allocated. A more responsible approach would be to require school districts to allocate a greater share of their existing budgets to teacher salaries while reducing administrative overhead. Rather than injecting new funds into the system, the legislature should enact spending reforms that ensure existing resources are used efficiently.

For these reasons, Texas Policy Research recommends that lawmakers vote NO on SB 26 unless amended as described. Without these amendments, SB 26 represents an expansion of government spending rather than a fiscally responsible approach to improving teacher pay. The state should focus on efficiency and accountability before committing additional taxpayer dollars to a system already struggling with administrative excess.

Free Enterprise

The bill expands state involvement in compensation decisions by prescribing performance-based pay structures, creating new funding programs, and requiring districts seeking additional funding to adopt TEA-approved evaluation systems. Rather than allowing districts to develop compensation systems based solely on local market conditions, the state establishes incentives and requirements that shape employment decisions.

Property Rights

The bill does not materially affect private property ownership or property rights. The legislation primarily addresses public education funding, educator compensation, and school operations.

Personal Responsibility

The bill strongly emphasizes accountability by tying compensation to demonstrated performance rather than automatic raises based on tenure or longevity. Teachers are rewarded for effectiveness, professional growth, and earning advanced designations, reinforcing personal responsibility and individual achievement.

Limited Government

The bill substantially expands the state's role in public education by creating new grant programs, retention allotments, liability insurance programs, and Enhanced Teacher Incentive Allotment (ETIA) schools. It grants the Texas Education Agency additional authority to establish eligibility criteria, designate and remove ETIA schools, administer grant programs, oversee performance-based compensation systems, and distribute billions of dollars in new funding. While the bill advances merit-based compensation, it does so through increased appropriations, expanded state programs, and greater administrative oversight.

Individual Liberty

The bill provides teachers with additional opportunities to earn higher compensation through merit-based designations and expands benefits such as liability insurance and pre-kindergarten eligibility for teachers' children. However, it also subjects teachers to a more centralized, state-directed evaluation and compensation system. These competing effects generally balance each other.

Amendment Recommendations

Reallocate existing education funds by requiring school districts to reprioritize their budgets so that a higher percentage of funding goes directly to teacher salaries, rather than expanding administrative expenses
Cap administrative spending by limiting the percentage of state education funding that can be allocated to non-teaching personnel, ensuring more resources go directly to classrooms and instructional staff.
Eliminate the Additional Teacher Incentive Allotment (ETIA) category by requiring all districts to implement performance-based pay within their existing budgets.

Committee Vote Information

Senate Committee on Education K-16: 11Y/0N
House Committee on Public Education: No Vote

View Bill Text and Status