The Texas Senate has unanimously approved Senate Bill 1 (SB 1), a $336 billion biennium budget blueprint that outlines state spending for fiscal years 2026 and 2027. The plan, authored by state Sen. Joan Huffman (R-Houston), increases state spending by $16 billion compared to the current budget cycle and now moves to the Texas House, where lawmakers will propose amendments before reaching a final version.
Major Allocations in the Budget
SB 1 proposes significant investments in key areas, aiming to address infrastructure, education, tax relief, and public safety. Among the notable expenditures are:
Education and Teacher Pay: The budget sets aside $4.3 billion to raise the average teacher salary from $54,000 to $69,000. Additionally, the Foundation School Program will receive a $7.5 billion increase, with an overall $731 million boost for higher education.
Property Tax Relief: A total of $6 billion is earmarked for new property tax relief measures, including a $40,000 increase in the standard homestead exemption.
Water Infrastructure: Texas plans to invest $2.5 billion in new water infrastructure projects.
School Safety: To enhance security in schools, the state is allocating $500 million toward increased safety measures.
Border Security: The budget continues Texas' investment in border operations, committing an additional $6.5 billion.
Healthcare and Medicaid: The Texas Medicaid program will receive $4.4 billion in additional funding.
Transportation: The Texas Department of Transportation is set to receive nearly $40 billion for highway design, repairs, and debt servicing.
Criminal Justice: The Texas Department of Criminal Justice will use $5.4 billion in unspent federal COVID-19 relief funds to cover operational costs.
Energy Investment: An extra $5 billion is appropriated for the Texas Energy Fund, a low-interest loan program designed to facilitate the construction of new natural gas power plants.
Education Savings Accounts (ESAs): The budget preserves $1 billion for the ESA program, which is expected to pass separately and would be administered by the state comptroller.
Legislative and Political Reactions
Lt. Gov. Dan Patrick hailed the budget as a responsible and conservative approach to state spending. “As Texas enters the second half of the 2020s, our state’s fiscal foundation has never been more solid,” Patrick said. “The Texas Senate’s All Funds budget, which passed unanimously today, grows a conservative 0.9 percent from last biennium.”
Huffman echoed that sentiment, emphasizing that the budget is not only balanced but also designed to secure Texas' long-term economic strength. “This budget goes beyond just being balanced—it is a fiscally conservative plan with strategic investments to ensure Texas remains the nation’s economic powerhouse for years to come,” she stated.
However, the proposal is not without its critics. Texas GOP Chair Abraham George sharply criticized the budget, arguing that it expands government without delivering on the level of tax relief promised by Republican leadership. “SB 1 needs a major overhaul in the House. It expands government while neglecting real property tax relief. Governor Abbott called for at least $10 billion in relief, and our party platform demands 90 percent of the surplus,” George stated. “This budget hits neither mark, abandoning the limited-government values central to the Texas Republican Party.”
What’s Next?
With the Senate’s approval, the budget now moves to the Texas House, where it is expected to undergo significant amendments. The House Appropriations Committee has already reviewed its own version, which closely aligns with the Senate’s plan. However, the process has not been without controversy. Rep. Brian Harrison (R-Midlothian) raised procedural objections, alleging House rules were breached, though his points of order were ultimately overruled.
Once passed in the House, the final version of the 2026–2027 budget will be settled in a conference committee composed of members from both chambers. The Legislature must finalize the budget before adjourning sine die on June 2.
