The Houston Independent School District (HISD) is facing a troubling trend: declining enrollment. From the 2022-23 school year to 2023-24, 5,825 students left the district. Meanwhile, the 2024-25 budget projections indicate another 4,011 students will exit, per HISD’s 2024 Annual Comprehensive Financial Report for the fiscal year that ended on June 30, 2024.
This steady drop raises serious concerns about the future of public education in Houston—what is driving students away and how will HISD maintain its funding?
On the financial side, property values in the district increased by 1% and the district has maintained a strong 97% tax collection rate, which the district expects to maintain. While this suggests that HISD still has a solid funding base, fewer students mean fewer state dollars.
At the same time, HISD no longer pays “recapture” payments—funds that wealthier districts are required to send to the state under Texas’ school finance system when local revenue exceeds state funding limits. The school district avoided a recapture payment for the first time in three years with an obligation of $0 compared to its earlier payments of nearly $326 million.
The reason behind this was a homestead exemption of $100,000, up from its earlier $40,000, in 2023. The tax cut reduced HISD’s operation expenses by 10.7 cents per $100 of a property’s valuation. It also faced “a significant decline in property value reductions due to protests,” eventually eliminating recapture. However, HISD is expected to pay a recapture of $57 million this academic year, which was added in the December budget amendments.
A district’s entitlement is dependent on its enrollment numbers. HISD receives at least $6,160 per student in state funding. Therefore, the loss of students could mean reduced funding per year from the Texas Legislature.
The question remains: where are these students going, and why? Are families taking their children to charter schools, private schools, or suburban districts? Or are they simply moving out of Houston due to affordability and economic pressures?
As HISD leaders plan for the district’s future, it’s important they understand the root cause of the decline of roughly 26,000 students in the last five years.
Impact on students
A shrinking student population impacts a school's overall structure. Fewer students mean fewer teachers, reduced funding and potential closures. This could also disproportionately impact low-income and historically underfunded neighborhoods, where school closures disrupt communities and limit educational opportunities.
HISD has already undergone a massive overhaul since the appointment of Superintendent Mike Miles. Miles implemented the New Education System (NES), which relies on pre-planned lessons and time-based daily assessments to prepare students for statewide exams.
While some schools under NES have shown improvement, the overall impact remains debatable. HISD has already cut several jobs in the past year and shuffled school leadership on several campuses. If families continue to leave, HISD can be expected to make tougher choices about staffing, resources and school closures in the coming years.
The need for strategic planning
HISD, which is currently facing backlash from teachers, parents and community members over its policies, must now be proactive rather than reactive. Instead of waiting for enrollment to drop further, the district must address these questions:
- Why are families leaving? HISD can conduct exit surveys and gather data to clarify this.
- How can HISD compete? If parents opt for charter schools, what can HISD do to improve its offerings?
- What other financial safeguards exist? With recapture payments eliminated, HISD must ensure funding is efficiently allocated to prevent budget cuts.
With fewer students, the school district must act now to prevent further losses. If it fails to adapt, Houston’s public schools risk becoming a system that serves fewer and fewer students each year—a trend that would have lasting consequences for the city’s future.
