The Texas Senate on Tuesday moved forward with its proposed $336.1 billion state budget for the 2026–2027 biennium, marking the largest spending plan in state history.
Senate Bill 1, authored by State Sen. Joan Huffman (R–Houston), includes sweeping appropriations across all areas of government, with major investments in public education, healthcare, and border security—while reserving billions in surplus funds for tax relief.
The budget passed the Senate unanimously without any amendments.
“We again have the opportunity to make strategic one-time investments [to] address long standing needs of our growing state, as well as return money back to taxpayers in the form of additional property tax relief,” Huffman told senators. “At the same time, we were very careful to craft a budget that is fiscally conservative and sustainable in future years.”
Included in the plan is $32.2 billion to extend the property tax cuts enacted in the last biennium, which raised the homestead exemption to $100,000 for most homeowners and $110,000 for seniors. Under the new proposal, those exemptions would rise again—to $140,000 and $150,000, respectively—while the state would provide further compression of local school tax rates.
Only $6 billion of the budget, however, is allocated to new property tax relief.
Government education receives a substantial boost, with $5.3 billion in new funding. The Senate’s plan includes $4.3 billion for teacher pay raises, and $1 billion for a school choice program, both made priorities by Gov. Greg Abbott.
In total, public and higher education spending makes up $129.7 billion—nearly 40 percent of the entire budget.
Other notable appropriations include $103.6 billion for healthcare, with $80.8 billion going toward Medicaid, $6.5 billion for border security, $5 billion for the Texas Energy Fund, $3 billion for dementia research, $498 million for film incentives, and $402 million for new Department of Public Safety troopers and equipment.
Lt. Gov. Dan Patrick celebrated the passage of the budget, stating, “As Texas enters the second half of the 2020s, our state’s fiscal foundation has never been more solid. Texas gets stronger and stronger with each passing biennium because our conservative principles guide our approach to budgeting. The Texas Senate’s All Funds budget for Texas, which passed unanimously today, grows a conservative 0.9% from last biennium.”
Andrew McVeigh, the president of Texans for Fiscal Responsibility, noted the budget marked a 40 percent increase over the last two sessions.
“This budget represents another massive increase in the size and scope of government in Texas, while only providing $6 billion in new property tax relief. Texans will never see real tax cuts or less oppressive government unless the legislature stops spending more of their money. The record new spending pushes the possibility of lower taxes and smaller government farther into the future, something Texans can ill afford,” McVeigh told Texas Scorecard.
The budget now heads to the Texas House, where the draft has been substantially similar.
