Eighty-eight state agencies outside of higher education asked for $4.27 billion less in general revenue-related base requests for the upcoming 90th Legislative Session. While this is a 2.9 percent decrease below current appropriation levels, the agencies then asked for more than three times that number back.
According to Texas Policy Research, agencies requested $13.26 billion through 744 separate exceptional items, effectively canceling out the reduction. The net change in total requests was $8.99 billion.
Exceptional items are the itemized priorities above an agency’s baseline limit. Calculating base requests and exceptional items, TPR reports state agencies are asking the 90th Legislature to appropriate 6.17 percent more general revenue than their current funding.
“The apparent reduction is also thinner than it looks. Seven agencies account for $6.08 billion of decline against a statewide reduction of $4.27 billion, which means the remaining 81 agencies raised their base requests by $1.80 billion. Nearly all of that seven-agency decline traces to one-time appropriations, much of it from a single supplemental spending bill passed in the 89th Legislative Session (2025),” according to the analysis.
The reductions were in response to the July 14 directive from outgoing Republican Gov. Greg Abbott, Lt. Gov. Dan Patrick, and House Speaker Dustin Burrows for the state agencies’ proposed Legislative Appropriations Requests (LARs) for the 2028–29 biennium.
The top three state leaders called for prudent fiscal stewardship and additional property tax reform in their joint instruction. “All state agencies must conduct a thorough review of each program and budget strategy to determine the value of every taxpayer dollar spent. As the starting point for budget deliberations, we are requiring each agency to reduce its base appropriation request level by three percent.”
Agencies requesting exceptional items were directed to find “lower-priority programs or other savings” to help pay for those exceptional items.
The letter exempted many of the state’s large financial obligations from the baseline request reduction. Those included public education; satisfaction of debt service requirements for bond authorizations; state pension systems and employee group benefits; Medicaid programs; the Children’s Health Insurance Program (CHIP); foster care programs; adoption subsidy programs; the Permanency Care Assistance program; and the Texas Education Savings Account Program, plus amounts necessary to reflect projected program participation.
Democrat state lawmaker and Governor-elect Gina Hinojosa called the ESA program a “voucher scam” and a “payout for the privileged.” During the campaign, she promised to fire Education Commissioner Mike Morath, end the program, and ensure taxpayer dollars go to neighborhood schools.
In her Tuesday election victory speech, Hinojosa took aim at the program and Morath again.
“In case you have not heard, on day one, I will fire Mike Morath,” she said. “And we will work tirelessly to repair the damage of the Texas voucher scam.”
The direction from Abbott, Patrick and Burrows loses its force after Tuesday’s Democrat sweep of Texas’ statewide offices and the Texas House of Representatives.
Once sworn in as lieutenant governor in January, Democrat Vikki Goodwin will preside over the Texas Senate, which remains under Republican control. State senators pass the rules at the start of every legislative session, from which the lieutenant governor derives authority. Senate Republicans could vote to modify the rules to curb Goodwin’s authority over committee appointments and bill assignments.
Hinojosa promised changes in her Tuesday victory speech:
“The voters have delivered a mandate for change, and it is change they will get,” she said. “The days of treating our public schools like they are for sale are over. The days of treating our tax dollars like your personal piggy bank are over.”
According to Texas Policy Research’s analysis, the Health and Human Services Commission (HHSC) made the largest exceptional item request at $6.22 billion in all funds. Of that, $3.13 billion is general revenue, at 5.86 percent of its base.
The Department of Criminal Justice (TDCJ) made the second-largest item request at $2.29 billion, all of it general revenue, and equal to 21.35 percent of its base.
The Department of Public Safety (DPS) ranked third in dollar amount and near the top in intensity. DPS requests $1.33 billion, all general revenue, equal to 32.27 percent of a base request it reduced by 13.99 percent.
Hinojosa and the new Democrat-controlled House may be more receptive to the $13.26 billion in exceptional item requests for items aligned with education, health, and other Democrat priorities.
The new leadership’s priorities will likely shift from the Republican-led focus on base restraint to enable property tax relief toward Hinojosa’s priorities centered largely on public K-12 education funding, teacher pay, redirecting the ESA money back to public schools, ending corporate tax breaks, and a one-time $1,500 household check funded by drawing down the Economic Stabilization Fund, known informally as the “rainy day fund.”
However, under SB 2, the legislature must set the appropriation amount for the ESA funding each biennium. Hinojosa’s influence on school vouchers is limited to a line-item veto, negotiation, and the Democrat House.
The LARs are an opening bid for budget negotiations, and the budget requires approval in both the House and Senate.
