Explaining Bond Funding vs Teacher Salary Funding

They are completely separate and have very different rules

Every state is a little different, but in Texas schools are funded in two different ways. One source of funding comes directly from the state. The other comes from what is referred to as “Debt Service or Interest and Sinking” which is what bonds fall under.

The money from the state of Texas is called Maintenance and Operations.

In summary, school funding in Texas comes from two sources (often referred to in public as two pots), Maintenance and Operations, and Debt Service/Interest and Sinking.

Two Funding Sources for Texas Schools

Let’s start with Maintenance and Operations (often referred to as M&O), then we will cover Interest and Sinking (often referred to as I&O).

Maintenance and Operations (M&O) Pot

What does it cover?

The M&O budget covers the basic operation of schools and is generally the money you think of when thinking about how everything is paid for at a school. This funding pot includes salaries, supplies, utilities, insurance, equipment, and anything else you can think of related to the day-to-day operating of a school (and a school system).

Where does it come from?

This money is provided by the state of Texas. It is broken down as a cash payment for every student enrolled in a school within the district*.

However, there are some things we need to address regarding this money. Texas is one of a handful of states that allocates this funding per student, but then based on attendance. In other words, attendance matters, A LOT.

To explain, I am going to oversimplify the math. Lets say that the state allocates $100 per student, per year. Then let’s say the Hays CISD attendance rate is 93% (meaning the rate at which every student combined in the district attended every day of class), the state will then do the following math:

(Number of Students Enrolled * $100) * Attendance Rate = Total Funding

Every absence, excused or otherwise amounts to a drop in funding for the district. If you are a parent in the district and this is the first time you are hearing this, you probably now understand why attendance is so heavily discussed (aside from being in school is related to better achievement of course).

Who decides the amount per student?

The state makes that decision, and despite higher inflation and an overall increase in the cost of just about everything around us, that funding has not changed over the last few years.

This is where I will tread lightly politically. The legislatures of the state of Texas are pointing fingers at each other as to who is to blame for a lack of increase in funding. Governor Abbott has expressed a desire to include school choice (a school voucher system, I will address this in a future post) as part of a bill to increase the amount of funding per student. Those legislatures opposed to “school choice” have vetoed the bill expressing the desire to split the two issues. As of December of 2024, that is where the issue stands.

The fact remains, keeping the amount per student the same for the last few years is the equivalent of reducing funding as everything that money is used for has become more expensive.

Debt Service/Interest and Sinking (I&S) Pot