Understanding School Funding in Texas

Understanding how public schools are funded in Texas can feel complicated, but these decisions directly impact classrooms, staffing, and the opportunities available to students. This month, Canyon ISD is launching Canyon ISD Connect, a new series designed to provide our community with information about topics that impact our district—beginning with school finance. Our goal is to provide clarity and build a shared understanding of how school funding works across Texas.

How Are Texas Public Schools Funded?

Public schools in Texas are funded through a combination of two primary sources:

• Local property taxes
• State Funding

While it may seem like school funding is based only on enrollment, much of the state funding formula is actually based on student attendance. This means each day a student is present has a direct impact on the resources available to support classrooms, staffing and programs. Even small changes in attendance can make a meaningful difference for school districts.

In addition to attendance, local property values and tax rates also play a role in how schools are funded. A common misconception is that rising property values automatically result in more funding for schools.

In reality, Texas uses a funding formula set by state law to determine the total amount of funding each school district receives. When local property values increase, the state typically reduces its share of funding to maintain balance within that formula.

Legislation passed in 2019, including House Bill 3, also introduced tax rate compression and increased homestead exemptions, which further limit how much additional revenue districts receive from rising property values.

As a result, even as communities grow and property values increase, school districts across Texas often see relatively flat overall funding. At the same time, districts must continue to manage rising costs for staffing, utilities, transportation and instructional resources.

Canyon ISD remains committed to transparency, responsible stewardship and ensuring our schools continue serving students and families with excellence.

Have questions?
Read the Canyon ISD Budget & Financial Planning FAQ.