FAQ: House Bill 2 Teacher & Support Staff Retention Allotments

Gov. Greg Abbot has signed House Bill 2 into law, outlining funding for public education in Texas. The law, which goes into effect in July, provides for Teacher Compensation provisions. The following Frequently Asked Questions were developed by the Texas Association of School Boards to help answer some of the inquiries surrounding the impact of HB 2 on teacher salaries. 

Full text of House Bill 2.

Q: Who does the teacher retention allotment apply to?

A: The bill defines ‘teacher’ using the “classroom teacher” definition in Texas Education Code § 5.001 but also includes uncertified and contracted teachers. That section of code defines a classroom teacher as “an educator who is employed by a school district and who, not less than an average of four hours each day, teaches in an academic instructional setting or a career and technology instructional setting.” In practice, teachers eligible for the allotment will be those staff reported in PEIMS code 087.

Q: How is funding determined?

A: The Teacher Retention Allotment provides a school system with an allotment for each classroom teacher as follows:

• For school systems with more than 5,000 enrolled students, like Canutillo ISD:
  • $2,500 for each classroom teacher with at least 3 years and less than 5 years of experience.
  • $5,000 for each classroom teacher with five or more years of experience.

Funding under TRA is not based on ADA nor enrollment and instead flows based upon the employment of personnel that meet the statute’s description, as reported to TEA. The TRA statute (Texas Education Code (TEC), Sec. 48.158) defines a classroom teacher for TRA allotment purposes as a person who is employed by a school system and who, not less than an average of four hours each day, teaches in an academic instructional setting or a career and technology instructional setting and who works in a role that would typically require possession of a State Board for Educator Certification (SBEC) teaching certification. The term under TRA includes individuals who do not hold a certificate who otherwise meet the definition. The term is not limited to teachers of record and instead includes any individual who meets the teaching role requirement noted above. It does not include a teacher's aide or a full-time administrator. The TRA statute also includes individuals who meet the definition of a classroom teacher even if they are employed by an entity with which the school system has entered into a contract (e.g., charter management organizations, SB 1882 partnerships, and shared service arrangements (SSAs)).

To determine which classroom teachers generate funding for pay increases based on years of experience, school systems should use total years of experience, which is calculated based on the number of verifiable years of creditable experience specified in 19 TAC, Chapter 153.1021. Classroom teachers will generate the increases in the year after they have completed three (or five) years of verifiable and creditable experience, not when they are entering the year when they will earn that creditable experience.

Personnel data used to determine the TRA allotment has historically been submitted to TEA as part of the PEIMS Fall Submission. Accordingly, TEA will calculate the total TRA allotment based on this data submission. For the upcoming school year, TEA will count the number of classroom teachers classified as a Teacher (Staff Classification (E0721) is 087) and Total Years Professional Experience (E0130) as submitted in the PEIMS Fall Submission for the 2025–2026 school year. 

1. If a PersonID with Staff Classification of 087 has multiple FTE entries within a school system, all FTE values are summed to calculate the total FTE.
2. A PersonID with a total FTE greater than or equal to 0.5 is considered a full-time teacher. TEA will derive instructional FTEs, or the portion of a person’s FTE that is used to perform classroom functions.  

For contracted staff, such as those employed by an SB 1882 partnership organization or via an SSA, the number of classroom teachers will be identified based on Staff Types 3 or 4 with Staff Classification of 087. In the past, requirements related to reporting individuals who work as classroom teachers through these contracts have not been consistent, so TEA will be updating guidance in the coming months to ensure clarity in reporting for the PEIMS Fall Submission. More details will be available in the FAQ.

As funding attaches to these submissions, it is of even greater importance that school systems ensure that staff classification, total years of experience, and teacher responsibility data are accurate when completing the 2025-2026 PEIMS Fall Submission, which must be finalized by January 2026. Payments will be made based upon data certified by Superintendents as final from the PEIMS Fall Submission. The PEIMS Fall Submission window provides time for school systems to review this data to understand which teachers will likely be eligible to generate funds for the Teacher Retention Allotment. 

In the coming weeks, TEA will be creating and sharing a report containing data from school year 2024–2025 in Texas Education Agency Login (TEAL). School systems can use this data to understand which teachers will likely be eligible to generate funds for the TRA. This same data will be used as the basis for payment estimates until data for school year 2025–2026 is available after the PEIMS Fall Submission window is closed. (See below for additional information on estimated FY26 payments.) Similar reports will be added to the Texas Student Data System (TSDS) moving forward.

Q: Is the allotment only for teachers of record?

A: The teacher retention allotment is for employees who meet the definition of classroom teacher, including those who are uncertified but otherwise meet the definition. Anyone reported in PEIMS code 087 who meets the experience requirements will be entitled to an allotment.

Q: Who does the support staff retention allotment apply to?

A: Districts can provide increases for full- or part-time employees not eligible for the teacher retention allotment who also are not administrators. Examples of positions eligible for the allotment include teachers not eligible for the teacher retention allotment (e.g., 1- and 2-year teachers), counselors, librarians, nurses, paraprofessional positions, clerical positions, auxiliary positions, and any other support staff (exempt or nonexempt). Examples of positions not eligible for the allotment include superintendents, assistant superintendents, campus administrators, other administrators, and employees in a centralized supervisory role.

Q: How is this funding determined: 

A: The Support Staff Retention Allotment provides a school system with an allotment of $45 for each student in adjusted average attendance. Adjusted average attendance is the quotient of the sum of the district’s allotment under TEC, Chapter 48, Subchapter B, and, if applicable, the allotment under TEC, Section 48.101, and the basic allotment for that school year (which has the effect of increasing ADA when calculating the SSRA for small/mid-sized districts and charters). For ISDs, students who do not reside in the district and are enrolled in a full-time virtual program are excluded. 

School systems are required to spend the allotment on increasing salaries for non-administrative staff. For the purposes of this section of statute, salaries would include hourly wages for employment types that do not have an option for salaried pay. Salary increases under SSRA must be increases in base pay for the eligible staff member (as base salary or base hourly wage) and should be reported as base pay. 

When determining what types of non-administrative staff are eligible for SSRA, statute provides specific details. Eligible support staff include teachers not eligible for a salary increase under the TRA, such as those with less than three years of experience. Eligible staff also include school counselors, librarians, school nurses, teacher’s assistants, custodial staff, food services staff, bus drivers, administrative assistants, and other support staff. Ineligible staff include the superintendent, chief executive officer, assistant superintendents or equivalents, principals or assistant principals, and employees in a centralized supervisory role.

It is important to note that additional payroll tax or benefit obligations may be incurred based upon these increases in salary (or hourly wage) levels. SSRA funding cannot be used on those additional costs, as SSRA funding must be used only to increase salaries (or hourly wages). However, additional funding has been provided by HB 2 to support those costs, via the new allotment for basic costs, an increase in the basic allotment, and an increase to the small/mid-sized allotment, among other funding increases provided by HB 2

Q: What if the funding dries up? Can we pay this as a one-time payment?

A: The bill clearly states that districts must increase and maintain the salary of teachers, so one-time payments will not comply. Some districts are considering showing the allotment separately in their teacher pay schedule to help differentiate the funding source for tracking and communication purposes. TEA has provided guidance that districts must update their teacher pay schedules to reflect the allotment amount. If a district intends to consider a different method of payment, it would be safest to consult local counsel for guidance.

Q: Do we have to provide the allotment on top of a step increase?

A: The bill requires a district to increase a teacher’s salary over the salary the teacher received (or would have received) in the 2024-2025 school year by the allotment amount. The bill does not include a requirement to also provide a step increase.

Q: What about part-time teachers?

A: Teachers teaching an average of four hours per day are entitled to the same allotment amount as those teaching on a full-time basis. The allotment is not prorated based on the amount of time worked. While required, paying the same allotment to each teacher regardless of percent of day worked results in higher daily rates for part-time staff. This will push part-time teachers off the teacher pay scale and result in misalignment of daily rates.

Q: What about teachers who have extended duty contracts (e.g., coaches, band directors, Ag teachers)?

A: The allotment is the same for each teacher, regardless of duty calendar. Districts may want to consider maintaining the same daily rate regardless of days worked. While most teachers are on the same duty calendar and the allotment will translate to the same daily rate for them, the district can consider paying the difference for extended duty calendars out of district funds to maintain parity. If the standard allotment is given to all staff with differing duty days, the daily rate of employees will change based on the duty calendar. This would result in lower daily rates for staff working more days, and higher daily rates for staff working fewer days and would fundamentally change the district’s teacher pay structure.

Some districts have considered changing duty days to move duty days for extracurricular work to a stipend. Districts considering this change will want to carefully consider the impact to employee pay cycles and contracts before moving forward. Contracts for 2025-2026 have already been issued to employees, so reducing days in the contract would be difficult to accomplish this late, and many districts are rapidly approaching their penalty-free resignation date.

Also, reducing duty days typically results in a change in pay cycle, which could result in employees missing checks during the transition period. In other words, if a district wants to reduce an employee from an 11-month pay cycle to a 10-month pay cycle with additional stipends, there likely will be one month during the summer with no paychecks being generated for the employee. Districts should carefully consider the timing and impact of these choices and consult HR Services and local counsel before taking action.

Q: What about people on our administrative professional pay structure who are really teachers (e.g., band director, ROTC teacher, football coach)?

A: These employees are entitled to the allotment regardless which pay plan they’re on.

Q: What about retire-rehire teachers?

A: The allotment is the same for each teacher, whether pre-retirement or retire-rehire.

Q: What about employees on the teacher salary schedule who aren’t teachers?

A: Districts with staff on the teacher scale that don’t qualify for the teacher allotment must decide whether to fund the pay increase out of the support staff allotment or local funds or move the positions off the teacher scale. Districts could also create a separate scale that looks similar to the teacher structure but does not include the allotment amounts.

Q: What about teachers with 0-2 years of experience?

A: The teacher retention allotment does not apply to years 0-2. The support staff allotment and/or local funds could be used to help fund increases for early career teachers.

The requirement for a difference in pay for uncertified 0-year teachers takes effect in 2026-2027, so no immediate action is required.

Q: What about staff in the educator career pathway (e.g., librarians, instructional coaches, counselors)?

A: The support staff allotment and/or local funds could be used to help fund increases for these teacher-adjacent positions.

Q: What about campus and central office administrators?

A: Any pay increases provided to campus and central office administrators must be funded by sources other than the allotments.

Q: How will the state determine years of “teaching experience” for allotment entitlement?

A: Teaching experience is total years of professional experience reported in PEIMS, which reflects the commissioner’s rules on creditable years of service (19 TAC, Chapter 153.1021).

Q: How will the state measure enrollment for these allotments?

A: The number of enrolled students will dictate whether a district qualifies for the higher or lower amount for the teacher retention allotment. The support staff retention allotment is based on adjusted average daily attendance, excluding students who do not reside within the district and are enrolled in a full-time virtual program.

Q: What if we can’t get everything finalized before we have to adopt our budget?

A: TEA guidance indicates districts should anticipate having to make more budget amendments than usual after initial budget adoption. Districts may be concerned that these changes may negatively impact their Financial Integrity Rating System of Texas (FIRST) rating. TEA intends to review data collected and determine before issuance of FIRST ratings if indicators are appropriate based on legislative changes or need to be paused.

Q: What is the payment timeline for allotments?

A: Districts will be paid beginning in September 2025 based on estimates from 2024-2025 until the summary of finances reports are updated in March 2026. Teacher data will be updated using Fall PEIMS submission.