08/11/2026
I asked Claude to summarize the Texas funding changes for special education, and this is what I got. I still haven't been able to find ALL the research that backed it up, such a massive change, and how it compares to several decades of research.
# Texas Just Rewired How It Pays for Special Education. Here's What's Changing.
For more than three decades, Texas decided how much money a school district got for a student with a disability based largely on one question: *where* did that student spend their day? A resource room, a self-contained classroom, a homebound placement — the setting determined the check. Beginning September 1, 2026, that question no longer matters. What matters now is *what the student actually needs*.
That shift — from a placement-based system to a "service intensity" model — is one of the biggest changes to Texas school finance in decades, and it's arriving right now, in the middle of the most disruptive rollout year districts have faced in a generation. Here's what changed, why, and what it means for the roughly 800,000 Texas students who receive special education services.
# # The old system, and why lawmakers scrapped it
Under the old model, funding weights were tied to "instructional arrangements" — codes describing the type of classroom setting a student was in and how many hours they spent there. Critics, including districts themselves, argued this rewarded restrictive placements and administrative bookkeeping more than it reflected the actual cost of services like speech therapy, behavioral support, or one-on-one aides. Two students with very different support needs could generate similar funding simply because they sat in similar classrooms.
The push to fix this dates back to 2021, when the Legislature created the Texas Commission on Special Education Funding through House Bill 1525. After eight interim hearings, the commission's 2022 report to lawmakers recommended exactly what's now happening: base funding on the intensity and type of services a student's IEP actually calls for, not the room they're delivered in.
That recommendation became Senate Bill 568, authored by Sen. Paul Bettencourt (R-Houston), and was folded into House Bill 2 — the Legislature's broader, roughly $8.5 billion school finance package from the 89th Regular Session in 2025. Bettencourt called it a "groundbreaking special education bill" that he expects will lead to better outcomes for students. Rep. Mary González (D-Clint), who served on one of the earlier task forces, said the final bill incorporated the recommendations districts had been asking for.
# # How the new model actually works
The new system, laid out in Texas Education Code §§48.102 and 48.1021, has two moving parts.
**Eight tiers of intensity.** Every student receiving special education services is scored across five domains of support: Curriculum and Instruction, Behavior, Communication, Independent Functioning, and Personal Care/Health. Each domain is scored 0–3 based strictly on what the student's IEP documents as required — not what a district thinks might help, and not anything undocumented. Within each domain, the highest-scoring factor determines that domain's overall score; the domain scores are then combined into a composite that places the student into one of eight tiers.
Two of those tiers are fixed directly in statute:
- **Tier 1** is reserved for students whose only special education service is speech therapy — no other specially designed instruction.
- **Tier 8** is for students whose ARD committee has determined that residential placement is their least restrictive environment.
Tiers 2 through 7 sit in between and are being defined through commissioner rulemaking rather than statute. Draft rules have circulated since spring 2026 and are heading through the Texas Register for public comment, with final adoption expected by late summer or early fall 2026 — meaning some of the fine print is still being finalized even as the new school year begins.
**Service groups.** Layered on top of the tiers are five service groups, which provide supplemental funding for specific instructional or related services that go beyond what the base tier covers — things like intensive therapies or specialized staffing ratios. Service group 1 carries the smallest add-on; service group 5 the largest.
Instead of the old contact-hour multipliers, districts will now also report the average number of minutes per instructional day a student spends in a special education setting — a more granular data point that feeds the offset calculation against the regular per-student allotment.
# # Where the money comes from
Lawmakers built in an explicit funding floor: the commissioner must set formulas so that the combined tier and service-group allotments add up to roughly **$250 million more statewide** for the 2026–27 school year than districts would have received under the old formula as it existed on September 1, 2025. That $250 million functions as a cushion to smooth the transition, with payments reconciled through the year so no district is penalized while everyone's data systems catch up.
The bill didn't stop at the funding formula, either. It also:
- **Removed the cap on Extended School Year (ESY) funding** — previously capped at 75% of the calculated amount with a $10 million statewide ceiling — and funds ESY at each student's highest qualifying tier of intensity.
- **Raised the special education transportation reimbursement rate** from $1.08 to $1.13 per mile for students who receive transportation as a related service.
- **Created a partial reimbursement for initial special education evaluations**, which can cost districts thousands of dollars per student and have surged in demand in recent years.
- **Doubled the college, career, and military readiness outcomes bonus** for students who received special education services.
- **Opened new funding for education service centers** to partner with districts and charter schools to build out day-program placements, aimed at expanding the continuum of service options available locally rather than defaulting to more restrictive settings.
# # Where things stand right now (and what's still ahead)
The 2026–27 school year is a deliberately messy transition year. A few key dates:
- **September 1, 2026** — The new statutory formulas officially take effect.
- **2026–27 school year only** — Districts must report special education data *both* ways: the old instructional-arrangement codes and the new tiers/service groups. TEA has also guaranteed that, for this one year, no district will receive less than it would have under the old formula, even as the new one phases in.
- **August 14, 2026** — Deadline for districts that accepted summer stipend grants (meant to help cover the staffing cost of re-scoring every student's IEP into the new framework) to submit at least 10% of their special education population's data to TEA.
- **October 8, 2026** — First official PEIMS attendance submission where districts report tiers and service groups for funding purposes.
- **2027–28 school year** — The old instructional-arrangement system disappears entirely, and funding runs purely on tiers and service groups.
- **December 1 of even-numbered years, ongoing** — The commissioner must recommend updated tier weights and service-group dollar amounts to the Legislative Budget Board ahead of each new biennium; final weights for this first cycle won't fully settle until reconciliation in September 2027.
# # What it means on the ground
For districts, this is a heavy lift this year: every student's IEP has to be re-reviewed and scored against the new domains, staff need training on an unfamiliar tool, and two parallel reporting systems have to run at once. TEA has stood up a special education funding tool, weekly office hours, and regional training through education service centers to help.
For families, the theory is straightforward — funding should more closely track a child's actual documented needs rather than which classroom they're assigned to, which advocates hope reduces any incentive to place students more restrictively than necessary. The scoring is explicitly tied to what's written in the IEP, which raises the stakes on ARD committees documenting support needs thoroughly and accurately, since a service that isn't documented can't be scored.
For the state budget, this is a real financial commitment, not just a formula tweak — a $250 million statewide increase layered on top of an already-expanded special education allotment, plus new spending on evaluations, transportation, and service capacity.
The rules for tiers 2 through 7 are still being finalized, and the real test — whether the new formula actually produces more equitable, needs-based funding once full data is in — won't be clear until districts and the state work through a complete cycle in 2027–28. But after four years of study and a full legislative session to build it, Texas's decades-old placement-based special education funding system is, as of this fall, officially retired.
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**Sources:** Texas Education Agency special education funding correspondence and resource pages (tea.texas.gov, spedsupport.tea.texas.gov); Texas Legislature bill analyses for SB 568 and HB 2 (capitol.texas.gov); Texas Tribune; KBTX; Texas Senate News; IDRA; KSST Radio.
