When Budgets Fail Students: How School Funding Gaps Widen Inequities

The Silent Crisis of Special Education Funding

In October 2024, Texas pulled back more than $607 million per year from special education programs by limiting reimbursements under the School Health and Related Services (SHARS) program. SHARS had been a lifeline, covering counseling, nursing, therapy, and transportation for Medicaid-eligible children in public schools.

Statewide, over 775,000 students receive special education services through the Texas Education Agency. While not all qualify for Medicaid, many come from low-income families directly dependent on SHARS reimbursements. Without these dollars, districts report difficulty hiring and retaining staff, while services once considered basic—like occupational therapy or bus rides to school—are being scaled back or cut altogether.

A Boost With Strings Attached

In 2025, lawmakers approved an $8.5 billion public education funding boost through House Bill 2. On the surface, this represents one of the largest single investments in state education in years. But the fine print changed everything: most of the funds are tied to teacher pay, leaving little for support staff, rising insurance costs, or building maintenance.

For context, teacher pay raises under HB 2 could reach as high as $20,000 in rural districts like Woodson ISD. Yet in other areas, such as Rockdale ISD, officials say the bill will only reduce “a little bit” of their $1 million budget deficit. In Corpus Christi, Flour Bluff ISD expects HB 2 to shave off $1 million from its $3.2 million insurance bill, but that savings alone won’t cover the district’s growing operational needs.

For the more than 1,200 independent school districts across Texas, the law’s rigid structure marks a departure from decades of local spending autonomy. Despite the infusion, schools warn that HB 2 will not offset skyrocketing costs brought on by inflation and the pandemic.

Public Schools vs. Charter Schools

While traditional public schools face new restrictions, charter schools continue to expand. Nationwide, charter enrollment has grown from 2.3 million students in 2012 (about 4.6% of all public school students) to 3.7 million in 2023 (7.6%). Today, charters operate in 46 states, up from 35 just two decades ago.

Research is mixed on their effectiveness. Stanford’s CREDO study shows students in large charter networks gained the equivalent of 50 extra days in math and 12 in reading compared to peers in district schools. In New York City, the numbers were even higher, with charter students logging 260 additional days of math instruction and 107 in reading compared to public school peers.

But stand-alone charters—those with one or two campuses—barely outperformed district schools, showing just 6 additional days in reading and a 6-day loss in math annually. Beyond performance, concerns remain about racial isolation: 90% of Black parents in a 2017 poll believed Black schools are underfunded compared to white schools, and research has shown charter schools are more racially segregated than district schools.

The Property Tax Puzzle

In Indiana, lawmakers recently restructured property tax rules so that public districts must share operating fund revenues with charters. Indianapolis Public Schools projected losses as high as $96 million from 2026 to 2032 under the new law. While supporters claim the policy will save homeowners $1.1 billion in property taxes over three years, Democrats warned that schools are left with fewer resources to cover rising expenses.

This trend is significant for Texas, where property taxes fund a major portion of school budgets. If similar measures emerge here, South Dallas districts—already hit by the $607 million SHARS cut and constrained by HB 2’s spending limits—could face deeper shortfalls.

The Racial Reality of Education

In Washington, D.C., charter schools educate nearly 50% of all public school students, yet racial gaps have widened. On recent standardized tests, 73.5% of white students met expectations in math compared to just 11.8% of Black students. In reading, the gap was 81.7% vs. 23.5%.

South Carolina’s statewide charter district shows both potential and limits: 54% of students are classified as living in poverty, and 18% receive special education services—a higher-than-average share. Yet even with an 87% graduation rate, questions about accountability remain, as lawmakers recently attempted to suspend provisions requiring underperforming charters to close.

Unlearning Inequities

For South Dallas, the parallels are clear. Black students in our community are more likely to attend underfunded schools, face harsher discipline, and lose access to programs cut under budget pressure. At the same time, charter growth—often governed by boards outside the community—risks reducing local control.

Education inequity is not abstract—it’s in the numbers: $607 million cut, $8.5 billion reallocated, 96 million projected losses, and millions of students impacted. These figures tell a story of schools caught between policy shifts, funding limits, and competing education models.

For South Dallas to thrive, we must demand:

• Restoration of special education funding to ensure the state’s 775,000 students with disabilities are not left behind.
• Transparent charter oversight, especially in communities where Black parents already report inequities in funding and representation.
• Protection of property tax revenues for neighborhood schools serving low-income families.
• Investment in Black educators, whose presence has been shown to improve outcomes for Black students.

South Dallas families know education has always been the foundation of freedom and opportunity. If Texas truly believes in schools as equalizers, then it must prove it by investing equitably—in every student, in every neighborhood, in every classroom.