Texas' $338 billion budget passes Senate, heads to Gov. Abbott's desk

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AUSTIN - The Texas Senate approved Senate Bill 1 on Saturday, marking the final passage of the state budget before it’s signed by Gov. Greg Abbott.

Here are some of the notable ways your tax dollars will be spent over the next two years.

Texas Budget Passes Senate

According to a Saturday release by Lt. Gov. Dan Patrick, the highlights of the budget are property tax relief, public education, and electrical grid and water infrastructure expansion. See breakdowns of the legislature’s plans for these further down.

In all, the legislature has passed a $338 billion budget to fund the state’s operations for the next two years. Patrick’s release notes that this is a 1.2% increase from the last biennium.

The All State Funds budget for Texas is $237.1 billion, an increase of 4.8% from the last biennium.

The House passed SB 1 on April 11.

What they're saying:

Patrick’s office released the following statement on his X account on Saturday:

Property Tax Relief

As noted by Patrick, $51 billion of the new budget is allocated towards property tax relief.

What this means for the Texas homeowner is that more money will now be sent by the state to school districts, reducing the amount of property tax dollars those districts will collect from residents, in combination with a raising of the state’s homestead exemption.

The latter, a joint effort of Senate Bill 4 and Senate Joint Resolution 2, both passed in February, would raise the homestead exemption from $100,000 to $140,000, or $150,000 for seniors. This is the value of your home that cannot be taxed to pay for public schools; the remainder of the home’s value is still eligible to be taxed.

According to the Texas Tribune, this is a continuation of existing cuts that were passed in 2019.

To read the Texas Tribune’s full breakdown of property tax relief covered by SB 1, click here.

Public Education

Last week, the House and Senate were able to come to an agreement on Senate Bill 2, the sweeping school funding bill with a final price tag of $8.5 billion.

The funding includes a $4.2 billion allotment towards pay raises for teachers and staff, as well as expanded incentive pay and teacher training programs. Some Texas school districts have already announced how they’ll be using this funding.

Other highlights include $1.3 billion for expenses like insurance, utilities and contributions to the state teacher retirement system.

The increase in funding also feeds into special education funding, the funding of full-day pre-K for children of teachers, early learning interventions and career and technical education. Those changes add up to $2 billion.

Also included is another $430 million for school safety improvements.

Electrical Grid and Water Infrastructure

Senate Bill 6, the proposal to increase Texas’ electric grid reliability, and House Joint Resolution 7, which creates a state water fund, both await the governor’s approval.

SB 6 gives Texas oversight over energy transactions between power generators and the state’s largest consumers of electricity. The Texas Tribune covered this legislation in depth in a report you can read here.

HJR 7 allocates $1 billion towards the state’s sales and use tax to create a water fund. The legislature plans to use this fund for projects to bolster the state’s water supply.