Testimony Before the Texas House Committee on Public Education on HB 3 - School Choice Bill

Chairman Buckley and committee members, thank you for the opportunity to submit this testimony on HB 3. My name is Dr. Vance Ginn, and I am an economist focused on fiscal policy, education reform, and tax policy to let people prosper in Texas and beyond. I appreciate the work this committee is doing to improve educational opportunities for Texas students. As someone who has worked on the budget, school finance, and property tax reforms in Texas for more than a decade and worked on the federal budget while at the White House, I would like to share some of my expertise with you on where we have been, where we are, and where we should be.

The Broken Texas School Finance System

Texas' school finance system is overfunded and fundamentally flawed. Taxpayers now spend nearly $95 billion annually on K-12 education, yet student outcomes continue to decline. The maze of state funding formulas is outdated and complex and should be improved, if not abolished. ​

Since 2013, per-student spending has increased by 48 percent, outpacing 35 percent inflation, while 8-grade math proficiency has dropped by 40 percent. Despite record spending, millions of students remain stuck in failing government schools.

The problem is not a lack of funding—it's the costly, bureaucratic government school monopoly. In fact, the money isn’t going so much to the classroom as it is to administration, either through a large increase in their number or to pay their hefty base pay. More money is not the answer for declining outcomes and excessive cost; competition is.

HB 3: A Step Forward, But Texas Can Do Better

I support the concepts of HB 3 because it expands school choice, but Texas must do more to ensure every family has access to educational freedom. HB 3 would cover less than 1.5 percent of Texas’ 6.3 million students, leaving 90 percent trapped in the government school system.

HB 3 has an escalator that would gradually cover students on a waitlist. However, the current legislature can’t appropriate the amount needed to fund the waitlist with the included funding mechanism, as it will be up to each legislature.

HB 3 imposes too many restrictions on accredited institutions and education-related purchases, making it more bureaucratic and costly than necessary.

Meanwhile, HB 2, part of the “Texas Two-Step” package, seeks to invest over $8 billion in government schools. It raises the basic allotment by $220 for every student above the $6,160 amount enacted by HB 3 in 2019, reinforcing the monopoly instead of fostering improvement.

HB 3 is a better approach than SB 2, the school choice bill in the Senate, because it is more universal and does not require students to switch from public to private schools to qualify. However, it must be improved to empower families and not further entrench the broken system.

How to Fund Universal ESAs and Reduce Property Taxes

Texas should replace the outdated school finance model with a universal, parent-directed ESA program.

As an example of an ideal scenario, every Texas student should receive a $12,000 ESA at a cost to taxpayers of $75 billion (or closer to $15,000 if we used the entire $95 billion on government schools today) to use on approved educational expenses. These would include Traditional public school costs, Private school tuition, Charter school costs, Homeschooling materials, Tutoring and special education services, and Career training and college prep.

By shifting from a district-based to a student-based model, Texas can empower families with the freedom to choose the best education for their children.

Texas should transition to universal ESAs for all 6.3 million students, replacing the inefficient government school finance model. This would save taxpayers nearly $20 billion annually and reduce M&O property taxes by two-thirds.

Most funding would come from state-collected revenue, primarily sales taxes. This approach ensures a more efficient use of taxpayer dollars, a direct funding model that prioritizes students, not bureaucracy, and lower property taxes while providing sufficient education funding. Rather than continuing to fund a failing monopoly, Texas should use existing state revenue to empower parents directly and ensure every child has access to a quality education.

The Impact of School Choice on Teachers and the Economy

Expanding school choice is not only about helping students—it also benefits teachers and the economy. Today, teachers are stuck in a monopsony system where government schools control salaries, limiting their ability to negotiate higher wages.

By introducing real competition, teachers would have more bargaining power and higher salaries based on market demand. My estimates show that teachers would see at least a $14,000 increase in pay and some high quality teachers could see an increase as much as $28,000.

School choice fosters competition and innovation, leading to better student outcomes, economic growth, and respect for parental rights.

How to Improve HB 3 and What to Avoid

• Pass HB 3 with improvements to make it universal and remove unnecessary restrictions.
• Kill HB 2 and other measures that funnel more money into the state’s arcane school finance formulas, which already overfund government schools.
• Ensure government schools receive no more than the current law requires. They do not deserve additional funding while continuing to fail students.

Conclusion: Texas Must Lead in Education Reform

The future of Texas education depends on empowering families, not expanding bureaucracy. A universal ESA system is the fiscally responsible, pro-student, and pro-taxpayer solution.

• Provides every Texas student with $12,000 to pursue the best education
• Eliminates waste and reduces inefficient government spending
• Cuts M&O property taxes by two-thirds
• Saves taxpayers $20 billion per year
• Increases teacher pay through competition

Texas can lead the nation in school choice and education reform. The committee should pass HB 3 with necessary improvements as outlined above, reject HB 2, and ensure no more money is funneled into an already bloated government school monopoly. 

Thank you for your time and consideration.
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Vance Ginn, Ph.D., is president of Ginn Economic Consulting, a contributor at over 20 think tanks, including Americans for Tax Reform and Texans for Fiscal Responsibility, and a board member of Texas Policy Research. Dr. Ginn was previously a lecturer at multiple higher education institutions, chief economist at the Texas Public Policy Foundation, and chief economist at the first Trump White House's Office of Management and Budget, June 2019 to May 2020. He earned his doctorate in economics at Texas Tech University. Follow him on X.com at @VanceGinn and get his research at vanceginn.com. ​