Effective Investment in Early Education

How Texas School Districts Use the Early Education Allotment and Its Impact on Student Learning

• IDRA Research Brief • by Angela Perez, M.A., & Chloe Latham Sikes, Ph.D. • January 2026 • See PDF Version •

Early education establishes building blocks for student learning. In 2019, Texas schools began implementing a new funding allotment for early education. The Texas Legislature created it to provide additional funding for school districts to direct toward improving reading and math outcomes for students in kindergarten through third grade (TEA, 2019).

This brief provides an overview of the purpose and spending of the early education allotment as of 2024. It also provides a snapshot of how three Texas school districts use their early education allotment.

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How the Early Education Allotment Works

School districts receive funds through the early education allotment based on the number of students attending kindergarten through third grade. Students who are (1) economically disadvantaged students (qualify for free or reduced-price lunch); and/or (2) emergent bilingual students who are in a bilingual education or special language program generate funding through the allotment (TEA, 2019; 2025a).

Each of these student groups generates weighted funding of 0.1, or 10% of the base amount of per-student funding (called the basic allotment), currently set at $6,160. A student who falls into both groups generates funding through each category with a weight of 0.2 (20%), totaling $1,232.

The Texas Legislature created the early education funding allotment to improve reading and math outcomes and to support expanded Pre-K access.

In 2025, the Texas Legislature passed House Bill 2, which modified the early education allotment. As of the 2025-26 school year, students in kindergarten through third grade who are not identified as emergent bilingual nor economically disadvantaged will also generate funding through the allotment but at a lower weight of 0.01, or 1%, of the basic allotment.

Although Pre-K students do not generate any of the allotment, school districts must use the allotment to first fund full-day Pre-K programs for 4-year-olds before receiving the rest of the early education funds. School districts are required to offer a full-day program, but the state only funds Pre-K at a half-day rate. If districts already have high-quality Pre-K programs in place and fund them through local and federal funds, the early education allotment must be used to improve reading and math programs and services.

In Texas, 33% of students are enrolled in prekindergarten (Pre-K) through third grade, and 4% are Pre-K students (TEA, 2025a; 2025c). Of the 1.8 million students in Pre-K through third grade, 27% are classified as emergent bilingual, and 78% are classified as economically disadvantaged (TEA, 2023a; Wang et al., 2023). (For a breakdown of statewide demographics and grade levels, see the Appendix.)

In addition, new modifications from recent legislation (HB 2, 2025) stipulate that the allotment be used for academic stipends for teachers to attend newly established academies on literacy and mathematics. Since these changes are just now being implemented, this brief focuses on data prior to the 2025 changes (see IDRA’s 2025 “Texas School Funding – Major Elements in House Bill 2” for more information).

Pre-Kindergarten Focus

High quality Pre-K programs prepare children to begin developing important skills early on. Studies show that high quality early education enhances a student’s school readiness and social-emotional skills beyond their early school years (Johnson, 2017; Meloy et al, 2019).

Schools are required to offer full-day Pre-K to all eligible 4-year-old students who meet one or more of the following requirements (TEA, 2025b):

• Their family qualifies for the free or reduced-price lunch program,
• They are experiencing homelessness,
• They are in foster care,
• They have a parent on active military duty,
• They are unable to speak or understand English,
• They have a parent eligible for the Star of Texas Award, meaning they were or are the spouse of someone who was a first responders and was injured or killed in the line of duty,
• They have a parent who teaches in the school district the child will attend (new as of HB 2, 2025).

High quality early education enhances a student’s school readiness and social emotional skills beyond their early school years.

Early Reading and Math Outcomes

The primary focus of the early education allotment is to improve reading and math outcomes in early grades. This emphasis stems from Texas’ long history of placing importance on early education and early intervention, especially in recent years with the expansion of full-day Pre-K (Boggs & Villanueva, 2019).

Early education outcomes in Pre-K help prepare students for high achievement in later grades. This is particularly the case for economically disadvantaged students who trail their peers on standardized exams (Fikac, 2020).

Third grade also is a key point in a child’s education, where having proficiency in reading is an integral part to continuing their education (The Annie E. Casey Foundation, 2023). The investment in early education in Texas moves beyond expanding Pre-K programs to preparing kindergarten through third grade students for success.

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Findings: How the Early Education Allotment is Used

State data do not clearly distinguish how the early education allotment funding is being used. While we cannot determine how much of the allotment schools allocate toward expanding Pre-K programs versus other goals outlined by the legislation, the data do reveal the major expenditure categories.

Texas school districts received over $1.2 billion in early education allotment funding in the 2022-23 school year (TEA, 2025c). About 91% of the funding went to paying school teachers and staff, with nearly three quarters of payroll going to instruction time, specifically for teachers who interact with students.

These payroll expenditures account for only about 2.24% of statewide payroll expenditures for educators and staff.

About 91% of the early education funding was spent on paying school teachers and staff.

The next highest spending object category was supplies and materials at almost 4% of the total allotment, followed by professional and contracted services (2.5%). The other three categories related to facilities expenditures, like capital outlay, debt service, and other operating materials, totaled less than 1% of the allotment. This means that most of the early education allotment goes toward educators responsible for instruction, including their pay and classroom materials.

Exhibits in the Appendix break down the early education allotment expenditures by the top 20 expending counties and by each of the 20 regional education service centers (ESCs) in the state.

The six counties that received the most funding for the early education allotment were Harris, Dallas, Tarrant, Bexar, El Paso, and Hidalgo counties. The five ESC regions allotted the most funding were Regions 4 (Houston), 10 (Dallas), 1 (Edinburg), 11 (Fort Worth), and 20 (San Antonio).

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Findings: School District Snapshots

This section previews how three types of districts with varying student populations and size allocated the early education allotment.

This analysis includes two large urban districts, Dallas ISD and Socorro ISD, and one large suburban district, Pharr-San Juan-Alamo (PSJA) ISD. A breakdown of the student demographics by school district is available in the Appendix.

Exhibit 1 shows the top five spending functions across the three snapshot districts. The top five categories include: instruction between teacher and student, school leadership, curriculum and staff development, instructional development, and guidance counseling services.

Instruction is the top spending category across all three districts. The second-largest spending function is other instructional and curriculum development, demonstrating that the early education allotment monies are being used for the intended purpose of improving reading and math outcomes by investing in curriculum and instruction.

Expenditures categorized as school leadership also account for a large share of the three school districts’ spending. These expenditures are primarily used for payroll toward school-level administration.

District Pre-K Spending

After reviewing the information each district has available on its school website regarding early childhood education, data show there is an emphasis on Pre-K across the three districts. Details on district programs varied. Dallas ISD and Socorro ISD both included the following early education information on their websites:

• student eligibility for Pre-K for 3-year-olds (Pre-K 3) and Pre-K for 4-year-olds (Pre-K 4),
• enrollment options, such as priority for in-district students versus open enrollment,
• application processes,
• tuition costs for students who are ineligible according to TEA guidelines, and
• additional partnerships with out-of-district childhood centers.

PSJA ISD was unique among the three districts. Since 2019, it has developed its early childhood department to expand beyond offering Pre-K 3 and Pre-K 4 to district-zoned students. Since the early education allotment was created, PSJA ISD has opened two new early education academies, offering free full-day Pre-K 3 and Pre-K 4 to all students who enroll, with an open enrollment policy. This expansion builds on the already established programs at each of its 25 elementary schools. The target of these academies is listed as kindergarten readiness and providing high-quality early education.

Impact on Student Outcomes

Texas third-grade student achievement suggests a positive impact of the early education allotment on student learning. The following figures present the average student performance on the third grade reading and math STAAR exams, third grade reading performance by Pre-K attendance, and other student outcomes that help demonstrate student achievement. Data show student performance from 2018 to 2023, except for 2020, when the exam was not administered due to the COVID-19 pandemic.

Exhibit 2 shows a drop in student performance across all three districts following the pandemic in 2020 for both reading and math. However, student outcomes have begun to stabilize in recent years.

Looking at the snapshot districts’ third grade reading performance, all three districts follow a similar trend pattern in comparison to the state average performance.

Dallas ISD student performance did not deviate significantly from pre-pandemic rates, and its 2023 scores reflect an upward trend in passing rates.

Socorro ISD and PSJA ISD differ slightly. While the districts show similar trends in the dip in scores in the year right after the pandemic, the initial gap between students who pass the reading STAAR was larger, roughly 65% for Socorro ISD and 60% for PSJA ISD. This signals that the post-pandemic recovery of student outcomes for Socorro ISD and PSJA ISD to pre-pandemic standards is a higher climb showing a stronger rebound for these two districts.

As seen in Exhibit 2, PSJA ISD began recovery from the pandemic with a higher rate of students who did not pass the third grade reading and math exams. When reviewed by student group in Exhibits 3 and 4, the performance gap for emergent bilingual students in 2021 is slightly larger in both areas, especially math.

About 91% of the early education funding was spent on paying school teachers and staff.

Given their student demographics where over 90% of students enrolled are economically disadvantaged, and nearly 50% of students are classified as emergent bilingual students, the outcomes data suggest that PSJA ISD’s expansive districtwide early education have been directed toward students who need it most.

Exhibits 3 and 4 highlight the student populations that generate the early education allotment. In these data, emergent bilingual and economically disadvantaged students are performing in similar ways to the average student population.

Exhibit 5 demonstrates third grade reading STAAR outcomes by Pre-K attendance. While there are no glaring differences between students who attended and did not attend Pre-K, we can see that students who attended Pre-K perform slightly better than those who did not.

Third grade students who attended Pre-K perform at slightly better rates than those who did not.

Students who attended Pre-K in Socorro ISD demonstrated growth in STAAR passing rates compared to those who did not attend Pre-K since the time of the investment in early education brought on by the early education allotment.

Exhibit 6 shows Pre-K assessment of reading and math for 2022-23. Pre-K students are evaluated using the same assessment at the beginning and end of the year to track subject proficiency and improvement.

Emergent bilingual students show the greatest improvement in reading proficiency across the three districts.

As noted in Exhibit 6, Pre-K students have demonstrated massive improvement in reading proficiency from the beginning to the end of the year. All students across the three school districts show improvement upwards of 40%, meaning 40% or more Pre-K students who were not proficient when starting Pre-K were considered proficient by the time they finished the Pre-K program.

Emergent bilingual students show the greatest improvement in reading proficiency across all three districts. Exhibits 7 and 8 track Pre-K assessment and proficiency across time (2018 to 2023) and by student subgroups.

Overall, we are seeing slight improvement in student outcomes that were disrupted by the COVID-19 pandemic. This trend suggests that continued investment in early education will lead to improvements in early learning.

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Policy Recommendations and Future Considerations

The direct impact of the early education allotment is difficult to measure based on limited data. One challenge is that there is no definitive manner to determine whether the allotment is spent on the students who generate the funding in the first place. However, based on student outcomes data, students are performing better on STAAR exams and Pre-K assessments since the early education allotment was created.

Improve Data Distinctions

IDRA recommends that PEIMS financial data include distinctions for early education allotment funds used between full-day Pre-K and improving K-3 reading and math outcomes to better distinguish how the early education allotment is spent. This would support clearer data and evaluation of whether kindergarten through third grade students who generate this allotment also reap the intended benefits for literacy, reading and math outcomes. This distinction in data reporting will be especially important for assessing the impact of the new changes to the early education allotment in HB 2, 2025.

Every child should have access to strong public schools. Early education is a pivotal learning time for students to acquire language, basic literacy and math skills, and social development.

Include Pre-K Student Education in Early Education Allotment and Targeted Funding

IDRA recommends expanding the student groups that generate the early education allotment to include Pre-K students, so they can generate additional funding for the programs they attend. This would enable districts to expand their early education beyond Pre-K for 3- and 4-year-olds, similar to how PSJA ISD has begun to do, and to more efficiently focus funding for kindergarten through third grade students on their outcomes, including in literacy and math.

Every child should have access to strong public schools. Early education is a pivotal learning time for students to acquire language, basic literacy and math skills, and social development. With clear data and equitable investments, the early education allotment and its recent changes present opportunities to better support our youngest learners.

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For more information about implementing these policy recommendations, contact Chloe Latham Sikes, Ph.D., IDRA Deputy Director of Policy at (chloe.sikes@idra.org).

IDRA is a non-profit organization. Our mission is to achieve equal educational opportunity for every child through strong public schools that prepare all students to access and succeed in college.

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Appendix

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How to Read the Data

State financial data from the Texas Public Education Information Management System (PEIMS) are broken down by categories including function, which describes the general operational area for educating students, and object, which groups expenditures into a spending category. Exhibits 14 and 15 depict the function and object codes, along with their descriptions.

The PEIMS data are also provided by program intent code, describing the specific allotment or operating expenditure the funding is distributed for including basic educational services, bilingual education, athletics, and early education among other programs. The early education allotment program number is 36. For all program intent codes refer to Exhibit 16.

The emergent bilingual student category includes students classified as current emergent bilingual students, those in English as a second language (ESL) programs and bilingual students in the Texas Research Portal Data.

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Citations

Boggs, R., & Villanueva, C. (2019). The State of Pre-K after the 2019 Legislative Session. Center for Public Policy Priorities.

Dallas ISD. (no date – a). Student Enrollment Information, webpage.

Dallas ISD. (no date – b). Pre-K/Early Learning, webpage.

Fikac, P. (February 2020). New Funding for Early Education: New Law Increases Funding for Texas’ Youngest Students. Fiscal Notes. Acting Texas Comptroller of Public Accounts.

IDRA. (2025). Texas School Funding – Major Elements in House Bill 2.

Johnson, P. (2017). Investing in Early Childhood Education Programs Yields High Returns. IDRA Newsletter.

Meloy, B., Gardner, M., & Darling-Hammond, L. (January 2019). Untangling the Evidence on Preschool Effectiveness – Insights for Policymakers. Learning Policy Institute.

PSJA ISD. (no date). Early Education Department, webpage. Pharr-San Juan-Alamo ISD. h

Socorro ISD. (2025).  Early Childhood Education, webpage.

TEA. (2019). House Bill 3 – Early Childhood Education Impacts (86th Legislative Session). Texas Education Agency.

TEA. (October 26, 2021). FAQ – State Compensatory Education Program. Texas Education Agency.

TEA. (2023a). Emergent Bilingual/English Learner Student Reports by Category and Grade School Year 2022-2023. Texas Education Agency.

TEA. (2023b). District 2022-2023 Financial Actual Data. Texas Education Agency.

TEA. (2023c). Texas Academic Performance Report (TARP). Texas Education Agency.

TEA. (2025a). HB 3 FAQ: Increases Funding and Equity. Texas Education Agency.

TEA. (2025b). 2025-2026 Student Attendance Accounting Handbook. Texas Education Agency.

TEA. (2025c). 2024 Texas Academic Performance Report (TAPR). Texas Education Agency.

TEA. (2025d). Texas Public Third Grade STAAR Performance by Texas Public Prekindergarten (PK) Attendance. Texas Public Education Information Resource.

TEA. (2025e). Texas Public Education Information Resource. Texas Public Prekindergarten Assessment Results for 4-Year-Olds District. Texas Education Agency.

TEA. (April 2025). Group Summary: Performance Levels and Reporting Categories. Texas Assessment Research Portal.

The Annie E. Casey Foundation. (May 1, 2023). How to Improve a Child’s Reading Skills.

Wang, Y., Pedregon, V., Gaertner, F., Nagy, S., Whalen, C., & Kallus, R. (September 2023). Enrollment in Texas Public Schools 2022-23. Texas Education Agency.

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FAQs

What is the Texas early education allotment?

The Texas early education allotment is a funding stream created by the Texas Legislature in 2019 to improve reading and math outcomes for students in kindergarten through third grade and to support expanded Pre-K access.

How much funding does the early education allotment provide?

In the 2022-23 school year, Texas school districts received over $1.2 billion in early education allotment funding.

How do school districts use early education allotment funds?

About 91% of the funding is spent on teacher and staff payroll, particularly instruction. Additional funds support curriculum development, instructional support and school leadership.

Do Pre-K students generate early education allotment funding?

Currently, Pre-K students do not generate allotment funding. Districts must first use the allotment to fund full-day Pre-K programs for eligible 4-year-olds before applying remaining funds to K-3 reading and math improvements.

Does early education funding improve student outcomes?

Data show stabilization and signs of improvement in third grade reading and math performance following COVID-19 pandemic disruptions. Students who attended Pre-K perform slightly better in third grade reading compared to those who did not attend Pre-K.

How does the allotment support emergent bilingual and economically disadvantaged students?

Students who are economically disadvantaged and/or emergent bilingual generate weighted funding through the allotment. Data show strong improvements in Pre-K reading proficiency among emergent bilingual students.

What policy improvements does IDRA recommend?

IDRA recommends clearer financial reporting to distinguish how funds are used and expanding the allotment so that Pre-K students generate funding directly.

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