The success of the Texas education system is not just important to Texans, it is a matter of national economic consequence: one in ten American children is currently being educated in a Texas classroom. As the state moves toward its bicentennial in 2036, the performance of these 5.5 million students is no longer just a local concern; it is the primary engine of the American economy.
In a recent discussion for the Future of Texas series, Texas Education Commissioner Mike Morath and Mary Lynn Pruneda, Director of Education and Workforce Policy for Texas 2036, sat down to dissect the state of the “human capital pipeline.” Their assessment is a blend of recognition of the need for immediate action and strategic optimism.
While Texas is on track to overtake California as the nation’s top producer of high school graduates by 2033, the quality of that credential remains the ultimate variable.
The conversation begins with a sobering reality check. Despite historic investments, the data shows a persistent “readiness gap.” According to Texas 2036 research, 60% of Texas students do not perform math at grade level, and 48% struggle with reading.
“If you’re not on grade level in third grade, 93% of those kids are still not on grade level in fifth grade,” Pruneda notes, highlighting how early struggles compound over time. The economic stakes are quantified in a figure that looms over the discussion: eighth-grade Texans today are projected to lose out on $104 billion in future lifetime earnings because they lack the skills to capitalize on the state’s booming economy.
Commissioner Morath doesn’t mince words about the necessity of rigorous standards. “Ensuring that our students are educated… is the best way to prepare them for a future that is dynamic, that requires them to think and wrestle with great ideas,” he says. He views education not as a passive delivery of facts, but as a “foundational framework” that determines a person’s ability to navigate a world increasingly reshaped by AI and automation.
A central pillar of the state’s recovery strategy is House Bill 1605, a landmark piece of legislation designed to give teachers better tools while returning to “the science of reading.” For years, many Texas classrooms relied on “three-cueing,” a method that encouraged students to guess words based on context or pictures. HB 1605 bans this practice, pivoting back to research-based phonics and high-quality instructional materials (HQIM).
“We are moving more students into advanced math in middle school,” Morath explains, but he emphasizes that this starts with what is happening on the teacher’s desk. The bill provides state-developed, open-education resources—now known as Bluebonnet Learning—which are designed to be “vendor-agnostic” and “rigorous.”
Pruneda highlights a secondary benefit of these materials: teacher retention. “Currently, teachers can be required to use bi-weekly planning time to create initial instructional materials,” she says. By providing pre-vetted, high-quality lesson plans, the state aims to reduce the “planning burden” that often leads to burnout. “It respects the expertise of teachers,” Pruneda adds, “enabling them to adapt content without being restricted to a scripted approach.”
Beyond providing high-quality materials, the state is fundamentally changing how it rewards its most effective educators through the Teacher Incentive Allotment (TIA). Morath emphasizes that for too long, the only way for a great teacher to earn a significantly higher salary was to leave the classroom and move into administration.
The TIA creates a pathway for top-performing teachers to stay with their students while earning six-figure salaries. “We want to make sure that we as a state are making substantive investments in our teaching core,” Morath says, “so that we have the best people in front of our kids every day.” By identifying and designating teachers as “Recognized,” “Exemplary,” or “Master,” the state provides districts with additional funding—ranging from $3,000 to over $32,000 per teacher annually—prioritizing those who work in high-needs and rural schools.
Pruneda notes that this is about more than just a paycheck; it is about professionalizing the vocation and ensuring that “great teachers in private school or public school” see a long-term future in Texas. This approach allows districts to build their own evaluation systems, ensuring that the best results in the classroom lead directly to the best rewards for the educator. It aligns the incentives for educators around the outcomes that will set up Texas children for long-term success.
While K-12 and teacher support set the foundation, the “hand-off” to the workforce is where the state has historically seen the most friction. By 2036, more than 70% of jobs in Texas will require a postsecondary credential, yet today only one in three high schoolers obtains one within six years of graduation.
To bridge this chasm, the 88th Legislature passed House Bill 8, which Morath and Pruneda describe as a “total transformation” of community college finance. For decades, colleges were funded based on “butts in seats”—the number of hours a student spent in a classroom. Under HB 8, 95% of state funding is now tied to measurable outcomes.
“Instead of competing against one another for state dollars,” Pruneda explains, “each community college is now challenging itself to earn additional funding by educating more students and awarding ‘credentials of value’.” These credentials must have proven market power, meaning the holder must earn enough within ten years to pay off the cost of the education and out-earn a typical high school graduate.
A critical component of this alignment is the Financial Aid for Swift Transfer (FAST) program. It allows economically disadvantaged high school students to take dual-credit courses at no cost.
“Texas is giving students a head start on college,” Morath says, noting that nearly 1.2 million high schoolers are now classified as “CTE concentrators.” The goal is to ensure that a high school diploma is no longer a terminal degree, but a bridge to a “family-sustaining wage.”
However, the Commissioner warns that transparency is the only way to ensure these programs work. He remains a staunch advocate for testing and A-F accountability ratings, despite political pushback. “Clear, transparent data can highlight where students need additional support and where effective strategies are already producing results,” he argues. Without it, he suggests, the state is flying blind.
As the discussion draws to a close, the focus shifts from data points to human outcomes. Pruneda speaks of a future where “pain points become joy”—where a student from “inner-city Houston or the plains of Snyder” has a fair shot at success because the system was designed to find and support them.
The 2025 STAAR results offer a glimmer of hope: reading scores are showing improvement, but as Morath points out, it is not yet “victory.”
“To keep Texas on a forward-moving economic path, we have to answer critical questions,” Pruneda concludes. “Will we ensure that educating one in ten American children means preparing them for opportunity, not just graduation?”
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