Texas Special Education Funding Is Changing: What Districts Need to Know About Tiers of Intensity

If you work in special education, PEIMS, finance, or district operations in Texas, you’ve probably already had at least one meeting where somebody said, “Wait… are we still coding instructional settings next year or not?” 

The answer, at least for now, is yes… and also no. Welcome to the transition period.

Beginning with the 2026–2027 school year, Texas is moving to a new special education funding model called Tiers of Intensity. Instead of funding services primarily based on instructional setting, the state will fund districts based on the type and intensity of services a student actually receives. The shift comes through House Bill 2 (HB 2) and Senate Bill 568, and it’s one of the biggest special education funding changes Texas districts have seen in years.  

For district leaders, this isn’t just a finance update. It touches ARD committees, PEIMS coding, service documentation, staffing conversations, and probably a few spreadsheets that somebody has been quietly maintaining since 2014. 

And because this is Texas school administration, all of those things are happening at the same time. 

What Is the Texas Tiers of Intensity Funding Model?

Under the old system, Texas special education funding was largely tied to instructional arrangements/settings. In practice, that meant funding often reflected where services were delivered rather than the actual level of support a student needed. 

The new model changes that. 

Under Tiers of Intensity, Texas districts will classify students based on the intensity of services outlined in their IEPs. TEA has indicated the framework will include: 

• Eight tiers of intensity  
• At least four service groups  
• Additional funding connected to student support needs rather than placement alone  

TEA describes the goal as creating a funding structure that better aligns resources with student services across districts.  

That sounds straightforward on paper. Operationally, though, districts are going to need clean data, consistent documentation practices, and strong coordination between special education, finance, and PEIMS teams in order to make it work well. 

Why Texas Is Moving Away From Instructional Settings

For years, districts and advocacy groups raised concerns that the instructional setting model didn’t always reflect the real cost of serving students with disabilities. 

Two students could technically sit in similar settings while receiving very different levels of support. One student might receive speech services periodically, while another needs significant behavioral supports, related services, or specialized staffing throughout the day. The older funding structure didn’t always capture those differences clearly. 

The new approach attempts to tie funding more directly to service intensity. 

According to TEA guidance and legislative summaries, the updated model includes roughly $250 million in additional statewide special education funding.  

That’s obviously welcome news for districts that have been stretching staff and budgets for years. But it also means districts will need to report services with much greater precision than before. 

And that’s where a lot of teams are starting to feel the pressure. 

What Districts Need to Prepare for Now

One of the more complicated parts of this transition is that districts won’t immediately stop reporting instructional settings. 

For the 2026–2027 school year, TEA expects districts to report both: 

• Existing instructional arrangement/setting codes  
• New Tiers of Intensity and service group data  

So for at least a year, many districts are essentially running two systems in parallel. 

If you’ve ever tried to introduce a new process while keeping the old one alive “temporarily,” you already know how this story usually goes. Somebody ends up maintaining two tracking documents, three validation reports, and a color-coded spreadsheet nobody else understands. 

TEA has also introduced new PEIMS data elements related to: 

• Tier of Intensity  
• Service groups  
• Minutes in special education  
• Educational environment reporting  
• Attendance tied to intensity tiers  

That means this transition isn’t just a special education department project. PEIMS coordinators, technology teams, finance leaders, and campus administrators all have a role here. 

Region 4 ESC guidance specifically warned districts that disconnected communication between departments could lead to funding errors or compliance concerns that may not surface until reconciliation later in the year.  

Unfortunately, that kind of delayed discovery is pretty common in school finance. By the time a discrepancy shows up, the staff member who built the original spreadsheet may have retired, transferred campuses, or vanished into another initiative entirely. 

ARD Committees Will Feel This Shift Too

Another major operational change is how ARD committees think about documenting services. 

Under the Tiers of Intensity model, service documentation becomes even more important because funding is tied more directly to the level of support being provided. TEA has already encouraged districts to begin training ARD committee members on how to assign students appropriately within the new eight-tier structure.  

That doesn’t mean ARD meetings suddenly become finance meetings. They shouldn’t. 

But districts will need consistent practices around documenting services, minutes, and support levels accurately across campuses. Otherwise, two campuses serving students with similar needs could end up reporting services differently, and generating very different funding outcomes. 

If you’ve worked in district administration long enough, you’ve seen how easily those inconsistencies happen. One campus documents meticulously. Another campus has excellent services but inconsistent coding habits. A third campus is doing heroic work but still keeping handwritten notes in a binder somewhere behind the receptionist desk. 

The new model raises the stakes for getting those details right. 

Technology and Data Systems Matter More Than Ever

This is also one of those moments where district technology systems suddenly move from “helpful” to “mission critical.” 

Because districts will need to: 

• Track service intensity accurately  
• Monitor special education minutes  
• Coordinate PEIMS reporting  
• Validate funding-related data  
• Maintain documentation consistency across campuses  

…manual processes are going to get strained quickly. 

TEA has already released a Special Education Funding Tool to help districts determine intensity tiers and service groups for students. The tool also allows districts to export records into Excel for broader tracking purposes.  

And while Excel will absolutely continue to exist in Texas public schools until the end of time, districts are already looking at how their SIS, special education management, and reporting platforms can help reduce duplicate entry and reporting confusion. 

Because nobody wants to discover in July that one campus coded service minutes differently all year long. 

This Change Is Bigger Than Funding

What’s interesting about the Tiers of Intensity conversation is that it reflects a broader shift happening across K-12 administration. 

Districts are moving away from models built around placement categories and toward models focused more directly on student services and outcomes. That requires better visibility into what supports students actually receive day to day. 

In many ways, the funding conversation is forcing operational conversations districts probably needed to have anyway: 

• How consistent are our service documentation practices?  
• Are campuses interpreting guidance differently?  
• Can finance, special education, and PEIMS teams actually see the same data?  
• How much manual reconciliation are we still doing?  

Those aren’t glamorous questions, but they’re real ones. 

And frankly, most districts are already juggling enough without adding another layer of duplicate tracking and year-end cleanup. 

What Texas Districts Should Do Next

Most districts don’t need to panic, but they do need a plan. 

Right now, the smartest approach is usually to: 

• Review current special education reporting processes  
• Identify where service documentation varies between campuses  
• Bring finance, PEIMS, and special education teams together early  
• Monitor TEA guidance closely as additional rules and FAQs are released  
• Start training staff before the 2026–2027 school year begins  
• Connect with your IEP company to see how they can support your efforts 

TEA has indicated additional guidance, webinars, office hours, and rulemaking updates are still coming.  

Which, honestly, is probably reassuring for districts. Most teams are still trying to understand what the operational reality will look like once this fully rolls out. 

For now, one thing is clear: Tiers of Intensity isn’t just a new funding formula sitting quietly in the background. It’s a major operational shift that will affect how districts document, report, and coordinate special education services across Texas. 

And if history tells us anything, the districts that start organizing early usually sleep a little better once PEIMS season rolls around.