Texas charter schools with an unacceptable academic rating or a failing financial rating can no longer collect state money for their buildings under a rule that took effect Oct. 25. The Texas Education Agency (TEA) published the adopted rule in the Oct. 23 Texas Register.
Open-enrollment charter schools are publicly funded but privately run, and they do not collect local property taxes to pay for buildings. The state’s facilities aid is meant to fill that gap. Last year’s House Bill 2 rewrote the program. It repealed the old $60 million cap on the total. Each school’s amount is now the lesser of two figures: the average rate school districts levy to repay building debt, applied to the state’s guaranteed funding level, or the basic allotment, the state’s base per-student funding, multiplied by $0.06.
The new rule spells out who is shut out. A charter holder is ineligible if it received an unacceptable academic rating, a financial rating below satisfactory, or any combination of the two during the two preceding school years, according to the preamble TEA published with the rule. Charter holders must also certify every year that no administrator, board member or close relative profits from a real estate deal with the school. TEA said the repealed and replaced rule implements the new law by setting eligibility criteria, a funding timeline and the annual certification.
The adoption responded to public comment, and the comments show where charter advocates and skeptics landed. The Texas Public Charter Schools Association, a charter advocacy group, argued that a “Not Rated” designation should not count against a school, because the law disqualifies only “unacceptable” ratings. TEA agreed and revised the rule to say a “Not Rated” label is not an unacceptable rating. A school administrator, whose name the notice does not give, raised concerns about fairness and fiscal risk, saying the proposal offers no comparable support to traditional school districts and could divert state resources.
TEA also made the rule more flexible on timing. The proposal would have fixed a charter’s final eligibility only at the end-of-year settle-up. The adopted version lets TEA update a school’s estimated funding when final data become available. Charters in their first two years of operation automatically receive estimated funding.
TEA filed the rule Oct. 5 after publishing the proposal April 24 and taking comments through May 26. The agency said it was adopted with changes to the proposed text and will be republished. The Register entry does not name any charter holder that would lose aid.
The Dispatch reported on a separate TEA rule that took effect the same day and cuts the school deadline for reporting suspected child abuse to 24 hours.
Which charters lose aid for the 2026-27 school year will depend on the ratings TEA uses and on the updated funding estimates the agency now issues as final data arrive.