Texas lawmakers will have $24B surplus to work with

TEXAS – The Houston Chronicle reports that Texas lawmakers will return to Austin this week with a budget surplus of nearly $24 billion, buoyed by growing tax revenue and a stalled school funding increase, Texas Comptroller Glenn Hegar said Monday. “Texas is in good financial shape,” Hegar said when he announced the 2026-2027 biennium revenue estimate on Monday. Lawmakers will have $194.6 billion in funds available for general-purpose spending this session, a roughly 1% decrease from the money available during the 2024-2025 biennium. Last session, lawmakers convened with a “once-in-a-lifetime” cash surplus, much of which they spent on property tax relief for homeowners. Now, Hegar said, the Texas economy “will continue to normalize after the profound disruptions of the pandemic, dramatic recovery when COVID restrictions were lifted, and high inflation that accompany a booming economic growth.”

Hegar attributed much of the state’s surplus to “prudent decisions by the Legislature last session to do one time expenses, not spend all the dollars, to be cautious,” he said. Some of the state’s nearly $24 billion cash surplus comes from $4.5 billion that was set aside last session for school funding and a school voucher program but never enacted. Gov. Greg Abbott has said creating a voucher program is his top legislative priority, and he has refused to take up increased public school funding until it passes. In 2023, state lawmakers allocated $18 billion to property tax relief, and they are likely to consider passing further tax breaks onto homeowners this session. Lawmakers have also signaled they will tackle the skyrocketing cost of home insurance, which is now among the most expensive in the country. Hegar noted that insurance tax collections, which make up a small share of the state’s revenue, skyrocketed in the past two years, jumping by nearly 16% in 2022 and more than 30% in 2023, compared to roughly 5% growth in prior years.