Rockwall ISD Budget Update: Legislative Actions and District Ongoing Funding Challenges

Following the 89th Texas Legislative Session, Rockwall ISD appreciates the Legislature’s effort in public education through House Bill 2 (HB2) aimed at teacher pay, school safety, and operational support. These efforts reflect a step forward in supporting schools across Texas—and Rockwall ISD is thankful for the work.

At the same time, while these funding changes are appreciated, they do not fully meet the needs of fast-growing districts like Rockwall ISD, especially in areas impacted by inflation, special education costs, and long-term fiscal sustainability.

What House Bill 2 Did Fund:

• Teacher Pay Increases – $4.2 billion statewide
  • 74% of Rockwall ISD teachers will receive a $5,000 raise.
  • However, 16% will receive no increase from HB2, and many roles, such as counselors, librarians, and nurses, are not included.

• Basic Allotment Increase – $55 per student
  • The small adjustment is not enough to account for inflation since 2019. Rockwall ISD’s Legislative Priorities included increasing the state’s basic allotment by $1,490 to fully fund Rockwall ISD.

• New ABC Allotment – $106 per student average daily attendance, or approximately $1.8 million for Rockwall ISD
  • Intended to help offset rising operational costs (utilities, transportation, insurance).

• School Safety – $430 million statewide
  • Roughly doubles current funding to Rockwall ISD, which helps—but doesn’t cover all costs. The increase falls short by over $2 million dollars for safety and security costs in Rockwall ISD.

• Special Education – $250 million for a new Special Education funding model beginning in Year 2 of the biennium (2026-2027).

Where Gaps Remain:

Despite these gains, the legislation fell short in several areas:

• Inflation and Local Budgets

The $55 Basic Allotment increase covers just 3.8% of the adjustment needed to match inflation since 2019. The new ABC allotment is appreciated, but it doesn't fully cover rising insurance and other costs.

• Special Education

The new funding model doesn’t begin until the second year and does not fill the estimated $1.5 billion annual statewide shortfall.

• Safety Requirements

While the state increased funding, Rockwall ISD remains underfunded by more than $2 million per year to meet safety and security mandates.

• Unfunded Mandates

The increases in benefit costs and program requirements have added significant strain to the budget without securing full funding support. For example, HB2 provides salary increases for certain staff, but it will also require the District to pay an additional $650,000 in benefits to the Teacher Retirement System as a result of the new legislation.

Where Rockwall ISD Stands Compared to Peers

Unlike all neighboring districts in Texas House District 33, Rockwall ISD has not passed a Voter-Approved Tax Ratification Election (VATRE)—a key funding mechanism that allows communities to raise additional dollars for teacher compensation and student programs.

As a result:

• Rockwall ISD has the lowest tax rate and lowest per-student funding among comparable districts.
• Most competing districts pay teachers significantly more due to their community’s approval of a VATRE, widening the gap in recruitment and retention.
• House Bill 2's funding model prioritized smaller districts, which made Rockwall ISD’s competitiveness even more difficult to maintain.

Local Impact Summary

Estimated New Revenue from HB 2 to Rockwall ISD:

• $9.6 million total, including teacher pay, support staff, school safety, and operational allotments.

Estimated New Required Costs:

• $7.8 million in mandated pay raises, benefit cost increases, and lost local revenue from state formula changes.

Net Impact to Rockwall ISD:

• Approximately $1.8 million in local control funding—a positive step, but not enough to close the District’s projected $6.3 million budget deficit for FY 2025–2026.

Looking Ahead

Rockwall ISD is grateful for the state’s efforts and values the partnership with state leaders. At the same time, we remain committed to:

• Sustainable state funding that keeps up with inflation,
• Full funding for safety, special education, and teacher and staff pay, and
• Local options like a Voter-Approved Tax Ratification Election (VATRE) to strengthen our local ability to compete and serve our students, teachers and staff.

As Rockwall ISD prepares for the upcoming school year, the focus remains on responsible budgeting, transparency, and delivering exceptional learning experiences for all students.

To see the presentation at the Board of Trustees meeting last night, click here.

To see the slides presented at the Board of Trustees meeting last night, click here.