The Impact of HB 3 on Early Childhood Education

Fully understanding the impact of HB 3 School Finance Legislation: The Early Childhood Reading Allotment

21 August 2019

House Bill 3 injected significant funds into early literacy this session in an effort to improve Texas’ low reading proficiency rates among 3rd and 4th graders (the state ranks 45th nationally in early literacy). Legislators prioritized high-impact strategies like required literacy training for the ~80,000 K-3 teachers in Texas, additional funding for dual-language programs, and increased resources to identify and support students with dyslexia. They also created a promising new standard for how the state equitably determines public school funding levels. One of the most significant financial investments contained within HB 3 is the new Early Childhood Reading Allotment (ECRA), which has the potential to significantly improve our state’s overall literacy rates by providing sufficient funding for strategies such as full-day pre-K. The ECRA investment represents an intentional decision, first recommended by the Public School Finance Commission and incorporated by legislators into HB3, to weave ongoing, flexible supports into the school funding formula so that districts have sufficient discretion to focus on what’s best for their students given local circumstances and current challenges that they face.

After all, its student outcomes that truly matter, not specific strategies. The goal of any school finance legislation should be to enable a desired outcome by the Legislature, which in this case is improved 3rd grade reading success. The ECRA provides resources to achieve the goal while allowing Texas’ more than 1,100 districts, which substantially differ in size, demographics, and classroom capacity, to decide which strategies best suit their communities.

HB 3 recognized both our state’s anemic reading proficiency rates as well as the powerful tool that full-day preK represents for accelerating literacy skills, but it also took into account the scale of Texas. While the legislation requires all districts who choose to offer pre-K for 4-year-old students to do so in a full-day manner by 2025, it doesn’t financially punish districts unable to do so in the interim years due to classroom capacity or the lack of parental awareness of its benefits. Instead, the ECRA provides $735 million in new annual funding Day 1 for early grades, enabling improved literacy rates without prescribing a one-size-fits-all approach to get there. Based on the compelling data of quality pre-K’s benefits, many districts will likely and immediately choose to use ECRA dollars to expand to full-day offerings, but others may be more apt to use the funds for other interventions given current constraints.

By increasing formula funding for districts based on the number of economically disadvantaged and English learning students in Kindergarten through 3rd grade, rather than the number of students choosing to enroll in full day pre-K4, the ECRA delivers much higher funding to school districts – as much as $340 million statewide in the first year. Moving the entire state to full-day enrollment for the 60% of eligible students not currently enrolled in full-day classrooms would require creating 108,000 additional pre-K4 seats – a substantial amount that cannot be accomplished overnight as school districts tend to issue bonds to finance new construction every four to six years. The large majority of districts will begin working to scale their full-day pre-K offerings while publicizing its potential with parents to help enroll as many eligible students as possible (students are not legally required to attend school until 1st grade and only 95% of eligible Kindergartners are current enrolled despite full-day funding for more than a decade). In the interim, however, they will still be able to draw down funds through the ECRA to accelerate reading rates via other strategies.

HB 3 is landmark legislation in a number of ways. Instead of the historical biennial discussion of “how much funding is enough?”, legislators instead focused on current student outcomes and then allocated resources and flexibility to school districts to enact strategies to increase those outcomes most in need of improvement. Should this much more nuanced approach prove successful, it could become a new and much more effective model in equitably improving educational results for Texas’ children, allowing all of them a strong and equal shot, regardless of family income or demographics, to participate in our state’s prosperity.