District consultant outlines House and Senate school-finance proposals as trustees weigh budget scenarios

A consultant who formerly led school finance at the Texas Education Agency told the Round Rock ISD Board of Trustees about several active state proposals that could change how public schools are funded and how districts budget for teacher pay and special education.

Leo Lopez, identified in the meeting as chief financial officer at consulting firm Moke Casey, summarized House Bill 2 (the House school-finance package), Senate Bill 26 (a teacher pay/retention bill) and other pending measures. Lopez said the House’s introduced version would raise the basic allotment (BA) and make extensive changes to special-education funding and teacher pay rules; he reported the introduced BA in the bill was $6,380 per student with proposals under discussion to increase it further.

Lopez said the House’s proposal as filed included changing a longstanding statute that requires districts to spend a portion of new state funding on employee compensation — raising the “compensation requirement” from 30% of new money to 40% — and would enlarge teacher-incentive and special-education allotments. He described a move from placement-based special-education funding toward an “intensity of services” funding model and noted the introduced version included a $1,000-per-evaluation reimbursement (he said the amount has since been discussed for reduction in committee substitute language). Lopez also described targeted increases for small and rural districts and proposed new allotments for things such as fine arts and high-school advising, though he said some items were likely to be pared back in committee substitutes.

On the Senate side, Lopez described Senate Bill 26 as a teacher-retention allotment proposal tied to district size, with an example that districts larger than 5,000 students could see $2,500 for teachers with three to four years’ experience and $5,500 for teachers with five or more years. Lopez said some language in early drafts would remove the statutory 30% compensation requirement entirely and that committees were still negotiating formulas for recapture (so-called wealth-equalizing recapture) and pass-throughs for recapture districts.

Trustees and staff asked how the proposals should affect local budgeting. Dr. Aziz (identified in the meeting as “Doctor Azais/Aziz”) and district finance staff said they were running scenarios and urged the board to adopt a conservative budget based on current law, with a budget amendment ready if the Legislature produces new revenue. The district reported its previously presented baseline deficit estimate had improved from roughly $16 million to about $9 million after local adjustments, but staff said the final outcome depends on what the Legislature approves and on details such as whether new dollars are required to be spent as compensation pass-throughs.

Trustees pressed on several specific items Lopez described, including the proposed per-evaluation reimbursement for special education (Lopez said the amount floated by the House was $1,000 but likely to be reduced in conference) and the effect of an intensity-based special-education model (Lopez said TEA would set weights and that the agency may need additional time to implement). Lopez warned that even if the House and Senate appear to agree on broad goals, conference committee negotiations often force trade-offs late in sessions.

Why it matters: Round Rock ISD officials said they must finish a balanced budget by June 30 and that, because the legislative picture remains uncertain, the district is preparing conservative budgets but running “what-if” scenarios that assume various BA increases, teacher pay allotments and school-safety dollars. Any new state rules that require a fixed share of new money to be spent on employee pay would limit local discretion on how to use state increases.

What trustees heard next: staff said school-safety funding increases (a proposal Lopez described as Senate Bill 260) looked likely to pass and that special-education funding changes still carried significant uncertainty. The district’s finance staff said they would return with tighter cost estimates and a recommended approach to incorporate any enacted state changes into the 2025–26 budget.