Kima board approves FY2026-27 draft budget

Kima board approves FY2026-27 draft budget

Texas Lawmakers Propose $332.9B–$335.7B Budget for 2026–27 Biennium

Texas lawmakers have unveiled competing budget proposals for the 2026–27 fiscal biennium, with the Senate’s draft (Senate Bill 1) totaling $332.9 billion and the House’s version (House Bill 1) at $335.7 billion. Both plans align with spending limits set by the Texas Legislative Budget Board (LBB) and reflect a continuation of recent trends toward increased state expenditures.

Education and Workforce Priorities
Public education remains a focal point, with both chambers allocating $4.9 billion to $5.3 billion for schools. A $1 billion Education Savings Account (ESA) program is included to expand school choice, though critics argue the funding falls short of universal access. The Senate proposes a $4,000 statewide teacher pay raise, with an additional $6,000 for rural educators, while the House emphasizes targeted incentives. Both budgets also allocate $1 billion to address the Teacher Retirement System’s (TRS) $57.9 billion unfunded liability.

Property Tax Relief: Diverging Approaches
Property tax relief remains contentious. The Senate’s plan includes $32.2 billion in reductions, featuring a $40,000 homestead exemption for homeowners and $50,000 for seniors—though Lt. Gov. Dan Patrick has advocated raising these to $140,000 and $150,000, respectively. The House focuses on tax compression, allocating $6.5 billion in relief without specifying exemption increases. Fiscal watchdogs argue that only 27% of the state’s $24 billion revenue surplus is being returned to taxpayers, calling for stricter spending controls.

Infrastructure and Economic Development
Substantial investments are proposed for infrastructure, including $5 billion for the Texas Energy Fund (natural gas power plants), $2.5 billion for water projects, and $40.4 billion for transportation via TxDOT. The Senate also allocates $3 billion for a Dementia Prevention and Research Institute and $500 million for film incentives.

Fiscal Concerns and Reconciliation
While lawmakers emphasize fiscal conservatism, critics like Dr. Vance Ginn of Ginn Economic Consulting highlight concerns over corporate welfare and surplus allocation. The Senate and House budgets face reconciliation challenges, with public hearings scheduled through February 14, 2025, to refine priorities.

As deliberations continue, the final budget will balance growth, tax relief, and long-term fiscal sustainability—a critical framework for Texas’ economic trajectory.