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In what Texas Governor Greg Abbott called a “historic victory,” the Texas House of Representatives passed Senate Bill 2 (SB 2), a school choice bill that would create a universal Education Savings Account (ESA) program. For the first time in Texas history, a school choice proposal cleared the House—a chamber that has long been resistant to such legislation. The moment marks a political turning point, but not necessarily a policy one. While Texas Policy Research strongly supports the expansion of educational freedom through school choice, we ultimately opposed SB 2 in its House version. The bill has continued to evolve, but key structural flaws remain that limit its effectiveness and undermine its transformative potential.
The Political Significance of SB 2’s Passage in the Texas Legislature
The passage of SB 2 on second reading in the Texas House represents a remarkable shift in political dynamics. Just one legislative session ago, a similar ESA proposal was rejected outright. The difference this time? A concerted campaign by Governor Abbott to unseat Republican incumbents who opposed school choice, a coordinated push from leadership, and even a phone call from former President Donald Trump to GOP lawmakers urging unity on the issue. With Abbott and Trump aligned, momentum swung in favor of advancing school choice legislation, culminating in an 85–63 House vote that saw only two Republicans—State Reps. Gary VanDeaver (New Boston) and former House Speaker Dade Phelan (Beaumont) voted in opposition.
The legislative choreography of the day saw SB 2 paired with House Bill 2, a sweeping public education funding package. Together, the two were dubbed the “Texas Two Step” by House leadership. HB 2 passed with overwhelming bipartisan support (144–4), while SB 2 revealed sharp divisions—both across and within party lines. The hours-long floor debate and near-record number of amendments filed (close to 50) all highlighted the high stakes of the moment.
What SB 2 Would Do: Education Savings Accounts in Texas
Senate Bill 2 creates an Education Savings Account program to be administered by the Texas Comptroller of Public Accounts. Under the bill, eligible families can receive state funds—estimated at up to $8,000 per student—deposited into a designated ESA to pay for private school tuition, instructional materials, tutoring, online programs, homeschool expenses, and more. For children with disabilities, the allotment may be higher, capped at $30,000 per year, and homeschooled students can receive up to $2,000 annually. Funding comes from a newly established program fund in the state’s general revenue account.
The ESA program is technically universal in eligibility, allowing any student eligible to attend public school to apply. However, the bill imposes a hard cap of $1 billion for the 2026–2027 biennium, meaning only about 75,000 to 100,000 students, out of over 6 million in Texas, can realistically benefit. Funds are disbursed on a staggered schedule and only to pre-approved providers vetted through state guidelines. The bill empowers the Comptroller to contract with up to five Educational Assistance Organizations (EAOs) to help administer the program and to promote it through marketing and outreach.
Comparing the Senate and House Versions of SB 2: A Shift Away from Simplicity and Scale
While the House passage of SB 2 is being hailed as historic, it’s important to understand how the bill changed as it moved through the legislative process—and how those changes weakened its potential. The version of SB 2 that passed the Texas Senate was, in many ways, more expansive, more generous, and simpler to administer than what the House ultimately approved.
Under the Senate-passed version, students enrolled in accredited private schools would receive $10,000 annually through an Education Savings Account. That amount increased to $11,500 for students with disabilities. Homeschool students could access $2,000, with an additional $500 if the student had a disability, specifically earmarked for educational therapies or services. There was a $20,000 total account cap per student per year to prevent over-accumulation. These were straightforward, easy-to-communicate amounts that reflected a commitment to empowering families quickly and broadly.
By contrast, the House Committee Substitute replaced this clear structure with a more opaque funding formula based on 85% of the statewide average state and local funding per student in average daily attendance (ADA)—currently translating to around $8,000 per student annually. For students with disabilities, the award can be increased by the special education allotment they would have received in public school, but the new cap is set at $30,000 per year. Homeschool students are still capped at $2,000, but the $500 special needs supplement and the $20,000 total cap are gone.
This shift away from fixed, meaningful amounts to a formula tied to the public school finance system is more than a technical difference. It reflects a broader philosophical problem: instead of building a parallel structure that stands on its own, the House version ties school choice directly to the funding and mechanics of the existing public system. The result is a policy that is less accessible, less competitive, and less transformative.
Why Texas Policy Research Opposes SB 2 in Its Current Form
Texas Policy Research believes school choice must be both universal and competitive to be effective. SB 2, while a symbolic milestone, falls short on both counts. A truly transformative ESA program must be available to every student who wants to participate, not just those lucky enough to win a lottery under a spending cap. The $1 billion limit imposed in SB 2 ensures that most Texas families will be left behind, especially those in underserved communities where alternative options are most needed.
Moreover, the funding model of SB 2 creates a parallel system rather than shifting dollars from public schools to families. Public schools are held harmless, retaining their full funding even when students leave—which eliminates the financial incentive for systemic improvement. In other words, the bill adds new spending without introducing true fiscal accountability or competition.
From an administrative standpoint, SB 2 introduces significant government control over private education. The requirement that all providers be pre-approved by the Comptroller or state-accredited limits the participation of innovative education models such as micro-schools or homeschool co-ops. The heavy use of audits, documentation mandates, and provider regulations reflects a bureaucracy-first mindset. While safeguards against misuse of public funds are important, the overall framework risks stifling the very educational diversity and flexibility school choice is meant to unleash.
Public Education Still Dominates: Nearly $8 Billion to Government Schools
While school choice advocates were asked to celebrate the passage of SB 2 as a historic milestone, the broader legislative package tells a different story—one that reinforces, rather than disrupts, the status quo. House Bill 2 (HB 2), passed alongside SB 2, allocated nearly $8 billion in new public education funding. This includes increases to the basic allotment (from $6,160 to $6,500 per student), expanded teacher incentive payments, school safety funding, and numerous grants for parental engagement, fine arts, and special education initiatives.
Supporters call this the “Texas Two Step”—pairing school choice with more money for government schools. But the numbers speak for themselves: $8 billion for the monopoly, $1 billion for the alternative. If school choice is truly meant to introduce competition, innovation, and accountability, it is difficult to see how those goals are achieved when the legacy system is funded at an 8-to-1 ratio compared to the new ESA program.
Rather than shifting dollars to follow students, this arrangement layers new spending on top of the old system, insulating it from financial consequences even as some students exit. That’s not realignment—it’s accommodation. And it runs directly counter to the market-based reforms that school choice is meant to inspire.
A Historic Step—But Built on a Broken Framework
There’s no denying that the House passage of SB 2 is historic. It shatters a decades-long wall of resistance in the lower chamber and proves that school choice now has the political capital to advance. But symbolism should never substitute for substance. As structured, SB 2 does not deliver on the promise of true school choice—it codifies a tightly constrained, state-managed pilot that fails to empower families broadly or meaningfully challenge the public education monopoly.
At Texas Policy Research, we unequivocally support school choice. We believe parents, not bureaucrats, should decide where and how their children are educated. But we abhor the mechanism by which this bill has come to be. SB 2 has been paired with House Bill 2, a massive $8 billion infusion into the very government school system that school choice is supposed to reform. While just $1 billion is allocated to the ESA program, the public education system receives eight times that amount, with no strings attached and no corresponding accountability for improvement.
School choice is meant to introduce competition, shift power to parents, and break the monopoly of one-size-fits-all education. But funding the monopoly at an 8-to-1 ratio makes a mockery of that goal. Rather than creating a marketplace, this legislative package props up the status quo while carving out a small, state-controlled program for a limited number of families. It’s a gesture toward choice, not a shift in power.
School Choice Deserves Better Than This
We understand the political calculus behind advancing SB 2. But we reject the notion that school choice must come at the cost of integrity, vision, and accountability. If this framework becomes the model, it risks cementing a version of choice that is small in scale, bureaucratic in nature, and fiscally disconnected from meaningful reform. In doing so, it may delay or even prevent the passage of a truly transformative education policy in Texas.
Texas families deserve better than a lottery-based, government-managed ESA program wedged into an overall spending package that overwhelmingly benefits the existing system. True school choice means funding students, not systems, and building a policy architecture that trusts parents to choose without filtering every decision through a state-sanctioned gatekeeper.
Until legislation reflects that reality, Texas Policy Research must stand in principled opposition. We will continue to champion universal access, fiscal responsibility, and real competition in education, not performative policies that leave the monopoly intact and parents sidelined.
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