HB2 School Funding Bill: What it means for Charters

HB2 School Funding Bill: What it means for Charters

June 12, 2025 | Leadership, Charter & Culture

Will they, or won’t they? That was the question most of us were asking throughout the legislative session while waiting to see if an increased funding bill would be passed. After MUCH deliberation, we now have House Bill 2 that was signed into law on June 4. The $8.5 billion funding education plan provides $4 billion for teacher pay raises as well as increases in multiple other targeted areas. Read on for a summary of the changes that take effect September 1, 2025. CSS has added a few charter-specific facts you might not read about elsewhere!

CSS is already helping charters plan budgets for 2025-26 with the HB2 changes! Our school partners are ahead of the game!

HB 2 School Funding Allocation by Priority Area

Priority Area Funding Amount
Teacher & staff raises $4 billion
Special education reforms $834 million
Career & technical education $153 million
Early literacy & numeracy programs $648 million
Teacher prep & certification $187 million
Campus safety allotment $430 million
Operational costs (utilities, insurance, transportation) $1.3 billion
Charter school facilities $199 million
Small & rural school support $318 million
Adjustments in Tier II funding (per-student) $296 million; base allotment +$55 per student

Who will receive pay increases?

The pay increases will vary by years of teacher experience and size of the school system.

  • Teachers with 3-4 years of experience in school systems under 5,000 students will receive $4,000, while those with 5 or more years will get $8,000.
  • Teachers with 3-4 years of experience in larger school systems (over 5,000 students) will receive $2,500, or $5,000 if over 5 years of experience.
  • First and second year teachers will not be eligible under HB2.
  • In addition, LEAs will receive $45 per student to fund pay increases for school counselors, librarians, nurses, and other non-administrative support staff as well as teachers who do not qualify under the above.
  • Additional pay increases may be awarded under the Teacher Incentive Allotment, and HB2 has expanded funding for the TIA.

What about the per pupil amounts?

  • The “basic allotment” that is the most flexible source of funding for charters will increase by $55 per student ($6,380 per student).
  • In addition, the charter will receive $106 per student for operational expenses to cover costs of transportation, insurance, utilities, employee benefits, and costs associated to hire retired teachers for hard to fill vacancies.
  • The school safety allotment will increase to $20 per student and $33,540 per campus (approximately double the current amount).

HB2 Side by Side Comparison ISDs vs Charters

Category Traditional ISDs Charter Schools
Base Allotment Increase ✔️ +$55 per student in Tier II funding ✔️ Same increase applies
Teacher & Staff Pay Raises ✔️ Eligible through $4B in teacher incentive funds ✔️ Eligible, but varies by staffing structure
Special Education Funding ✔️ Significant increases to per-student SPED allotments ✔️ Applies, though many charters have smaller SPED programs
Facilities Funding ❌ Still reliant on local property taxes ✔️ $199M in new dedicated facilities funding
Operational Cost Relief ✔️ $1.3B in cost offsets (utilities, insurance, transport) ✔️ Included, particularly for transportation/utility costs
Early Literacy/Numeracy ✔️ Direct funding for K–3 supports ✔️ Eligible for same literacy-focused funds
Career & Technical Education ✔️ Increased allotments for CTE programs ✔️ Eligible if offering qualifying programs
Safety & Security Funding ✔️ $430M in school safety funds (training, infrastructure) ✔️ Applies to eligible charter campuses
Accountability Requirements ✔️ Stricter legislative controls on fund usage ✔️ Same oversight applies
Access to Local Tax Revenue ✔️ Primary revenue source remains property taxes ❌ Still no access to local tax base

What is unique to charters in HB2?

Facilities Funding

  • $199 million is allocated specifically for charter school facilities.
  • This funding is intended to help charter schools lease, maintain, or build campuses, which has historically been a major challenge since charters don’t receive local property tax revenue like traditional public schools.
  • It helps level the playing field with traditional ISDs in terms of access to quality buildings and infrastructure.

Teacher Certification

HB2 mandates traditional ISDs to eliminate uncertified teachers in the four core subjects by the 2029-30 school year. This mandate does not apply to charter schools. Charters will still follow what is in their approved charter when it comes to teacher certification requirements (except for state law requires SPED and Emergent Bilingual/ESL teachers in charters to be certified regardless).

The bill is massive and new; therefore, continued interpretation and implementation guidance will be coming in the very near future. For additional information, please read the below articles that were sources for this publication.

Sources:

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