Texas budget writers prioritize school vouchers, teacher raises and border security in early drafts

Sign up for The Brief, The Texas Tribune’s daily newsletter that keeps readers up to speed on the most essential Texas news.

---

Texas lawmakers are looking to spend billions of dollars over the next two years to create a school voucher-like program, cut property taxes, raise teacher pay, shore up water infrastructure and continue the state’s border crackdown, according to initial state budget drafts House and Senate leaders filed Wednesday.

Both chambers set aside $1 billion in their initial spending plans for education savings accounts, a voucher-like policy that would let families use state funds to cover the cost of private school tuition and other education-related expenses. That amount is double what was on the table two years ago and is a sign that supporters are emboldened after recent electoral gains in the House, the chamber that has thwarted past voucher proposals.

The chambers also aligned on putting $6.5 billion toward what Lt. Gov. Dan Patrick’s office described as maintaining “current border security operations.”

Patrick and Gov. Greg Abbott had previously suggested they would look to redirect some of the state’s recent border spending surge toward other uses now that President Donald Trump is set to crack down on immigration through federal policy. But the $6.5 billion proposal mirrors the budgeted amount for border security for the current budget cycle.

The spending proposals provide the first glimpse of how the Republican-controlled Legislature might use the state’s projected $24 billion surplus in the next two-year budget cycle, which begins in September. Both chambers proposed spending nearly $5 billion to increase public school funding and $3.5 billion for new property tax cuts.

While the two chambers unveiled similar spending priorities, they will have to iron out scattered differences in their nearly 1,100-page budget drafts before sending the final version to Abbott’s desk. Much of the spending also depends on lawmakers passing separate legislation to unlock the money, as is the case with education savings accounts, property tax cuts and a new dementia prevention research institute.

The Senate’s $332.9 billion proposal, Senate Bill 1, was filed by Sen. Joan Huffman, R-Houston, who chairs the Senate Finance Committee, while Rep. Greg Bonnen, R-Friendswood, introduced the House’s $335.7 billion proposal, House Bill 1.

Newly elected House Speaker Dustin Burrows, R-Lubbock, has not yet announced his committee chairs, including who will lead the House Appropriations Committee. But Bonnen’s authorship of the House budget bill signals he is likely to remain in charge of the budget-writing panel.

Burrows characterized the two chambers’ budgets as “substantially identical.”

“This initial step in the budgetary process signals a strong commitment to collaboration between the two chambers to pass a fiscally conservative budget that addresses the priorities of Texans,” he said in a statement.

Passing a balanced budget is the only thing state lawmakers must do during their 140-day session that began on Jan. 14 and concludes on June 2.

Lawmakers are expected to have $194.6 billion in available general revenue to fund the state’s business over the next two years, according to an estimate from Texas Comptroller Glenn Hegar. That estimate could change based on economic conditions and does not include allocations from the federal government for programs such as Medicaid.

A constitutional spending cap limits how much general revenue lawmakers can spend each year. Both budget drafts would spend just north of $150 billion in general revenue — Texas’ main source of paying for core services like public education and law enforcement — coming in under the spending cap outlined last week by the Legislative Budget Board. Both plans leave billions unspent before lawmakers would run into Hegar’s $194.6 million general revenue estimate, though they would have to take a politically perilous vote to bust the spending cap well before then.

Rep. Armando Walle, a Houston Democrat who has served on the House Appropriations Committee since 2015, noted that the chamber’s draft budget continues paying for flood infrastructure and the state’s food bank program, both of which fall under the sections of the budget he oversees. But, he added, “we again have historic amounts of money we can spend, and so many essential services that need investment.”

“First and foremost are our neighborhood schools and educators,” Walle said. “But Texas families are also looking to the Legislature for leadership to make child care affordable and accessible, to modernize flood control and drinking water infrastructure, and to make it a little easier to put food on the table.”

The rest of the state budget is paid for by federal funds; general revenue earmarked for specific uses; and a mix of other state funds, such as the State Highway Fund — fueled by things like vehicle registration fees — and the Economic Stabilization Fund, known informally as the rainy day fund. The account has ballooned in recent years and is projected to reach its constitutional limit next year, after which any money that would have gone into the fund would instead go toward general revenue.

Enhancing education spending

Both the Texas House and Senate proposed setting aside $1 billion in the next two years for the creation of education savings accounts, a $500 million increase from what lawmakers proposed for such a program during the 2023 legislative session.

The school voucher-like program would allow families to use taxpayer dollars to pay for their children’s private schooling and home schooling. The dramatic increase comes after Abbott helped oust many of the Texas Republicans who opposed the policy during the most recent election cycle.

The House and Senate proposed allocating $4.85 billion in new funds to the state’s public schools. During the last legislative session, public schools did not receive a meaningful funding boost after lawmakers declined to pass a school voucher program. Abbott had promised not to sign a bill increasing public education funding without the passage of vouchers, his top legislative priority in recent years.

This session, the Senate wants to increase teacher pay by $4,000. Teachers in rural areas would receive an additional $6,000 pay bump, for a total of $10,000, under the Senate’s proposal, which Patrick said would close the salary gap between urban and rural teachers. It was not immediately clear whether teachers would receive the pay raise annually or one time only. The raise is higher than what lawmakers proposed last session but still falls short of what public school teachers say they need.

“That doesn’t come close to covering their pay deficit which now trails the national average by more than $9,000,” Texas State Teachers Association President Ovidia Molina said in a statement. “Legislative budget writers need to start over, and they should start by scratching out the money set aside for vouchers and allocating it to public schools.”

The House budget draft does not specify whether the new public education dollars would go to teacher raises. But existing state law requires school districts use at least 30% of a funding increase to boost compensation for non-administrative employees.

Both chambers proposed adding $400 million for school safety, after school districts said lawmakers did not fully fund new safety mandates, including requiring an armed security guard at every school and providing mental health training to certain employees.

Closely tied to the state’s education spending are lawmakers’ efforts to limit property taxes residents pay to their local school district. Both chambers proposed spending more than $32 billion to continue funding tax cuts approved in 2019 and 2023 — most of which involves paying school districts to cut their tax rates — and pass a new round of relief this year.

Patrick said he wants the $3.5 billion set aside for unspecified new tax cuts to go toward increasing the school homestead exemption, or the amount that homeowners can shave off the taxable value of their main residence. Patrick, who spearheaded a push to raise the homestead exemption to $100,000 two years ago, proposed hiking it another $40,000, which would allow Texans to pay school property taxes as if their home was worth $140,000 less than the actual appraised value.

Supporting Operation Lone Star 

Budget proposals in both chambers call for $6.5 billion to go toward border security. That would increase the amount of taxpayer money used on such efforts to close to $20 billion since the state launched Operation Lone Star in 2021.

The bulk of the proposed allocation would go to the governor’s office, which would receive $2.9 billion; Texas Military Department, which would receive $2.3 billion; and the Department of Public Safety, which would receive $1.2 billion. DPS would receive an additional $402 million to hire more state troopers.

The draft budgets suggest that lawmakers won’t scale down the state’s presence at the border, as Abbott and Patrick had suggested after President Trump’s victory in November. Trump already began his promised clampdown on immigration by ending the use of an app that let migrants make appointments to request asylum — among a flurry of executive actions he issued on his first day back in office.

The state began its all-out effort to control the border — deploying troops, building a border wall and arresting migrants on state criminal trespassing charges — amid a spike in migrant crossings under the Biden administration, whose policies Abbott cast as overly lax.

While Abbott has credited the border mission for a recent decrease in illegal crossings, immigration experts question Operation Lone Star’s efficacy. The number of illegal crossings reached record highs years into the program, the state’s border wall is largely incomplete and expensive to build, and people across the world continue fleeing poverty and violence for the U.S.

State lawmakers have also signaled they will double down on border security by filing a variety of bills, including one that would create a Texas Border Protection Unit whose officers are authorized to arrest people suspected of illegally crossing the Texas-Mexico border.

“While border security funding appears to be available over the coming biennium, the real question is: how long can we ask the current personnel strength to maintain such a high operational tempo?” Sen. Brian Birdwell, R-Granbury, who chaired an interim committee on border security, wrote in a recent report. “Texas should cautiously expect some form of federal relief of our current operational tempo in the coming months.”

Boosting energy and infrastructure

Lawmakers’ have proposed a combined $10 billion infusion of funding into the state’s water, broadband and energy infrastructure.

Both chambers have aligned on spending $5 billion to double the Texas Energy Fund, which offers low interest rate loans to incentivize the development of new power plants. Voters approved a constitutional amendment to create the Texas Energy Fund in 2023. It provides 3% interest rate loans to build or upgrade gas-fueled power plants, part of lawmakers’ push to fortify the grid in the aftermath of 2021 Winter Storm Uri.

“For all the acrimony that we’ve had politically over the last few months, it’s notable that the House and Senate budget proposals are very similar,” said Rahul Sreenivasan, director of government performance and fiscal policy at Texas 2036, a nonprofit public policy organization. “They both have money for notable things like water infrastructure.”

Both chambers have proposed $2.5 billion for the Texas Water Fund, though the Senate indicated that funding would be in the supplemental budget, not the general appropriations budget. The supplemental budget covers expenses during the current budget period and is typically passed towards the end of the legislative session.

The proposal is less than the $5 billion that Sen. Charles Perry, R-Lubbock, told The Texas Tribune he was asking lawmakers to spend on water supply and infrastructure projects.

Perry Fowler, executive director of the Texas Water Infrastructure Network, expressed initial disappointment upon learning the amount is half of what lobbyists, local leaders and Perry have sought.

“If we are constrained to that amount it can lessen our ability to have an impact in water projects,” Fowler said.

Fowler said he appreciates the growing bipartisan support for water funding but that there is more urgency for Texas to step up with a greater investment after Trump signed an executive order asking federal agencies to pause spending money from the Inflation Reduction Act and the Infrastructure Investment and Jobs Act.

“We can’t count on the feds now for funding,” Fowler said.

State lawmakers are also looking to inject $2.5 billion into the state’s Broadband Development Office to expand internet access to the estimated 7 million residents who aren’t connected.

House lawmakers also included a line item for a Nuclear Energy Fund, which would incentivize nuclear reactor projects, according to a November report from a working group the governor appointed to help Texas advance its nuclear industry.

Health spending

Health care takes up the largest portion of the Texas budget, amounting to roughly 50% of the state’s spending. Both budget proposals allocate an additional $3 billion to a new Dementia Prevention and Research Institute, a top priority of the lieutenant governor. The program would be modeled off the state’s successful $6 billion Cancer Prevention and Research Institute, Patrick has said, and would require voters to approve its financing with a constitutional amendment.

Texans for Children, a nonprofit advocacy organization, praised both budget bills for allocating what they consider significant new funding to improve the enrollment process for Medicaid health insurance.

The Texas Health and Human Services Commission has requested $300 million to make it easier for Texans to sign up for Medicaid and Lone Star cards for groceries through the Supplemental Nutrition Assistance Program, also known as food stamps. Health commission officials did not immediately confirm whether the request was reflected in the draft budgets.

“We’re glad to see both budget bills invest in upgrading the Medicaid enrollment system so it actually works for families,” said Diana Forester, health policy director at Texans Care for Children. “Instead of state workers typing in everyone’s personal data, the state should be using modern technology to improve efficiency and cut down on the risk of mistakes and long delays.” Texans have historically waited months to be enrolled in Medicaid and other state-run programs.

While it was disappointed that the draft budgets don’t include funding to increase the number of child care slots reserved for low-income children through the Texas Workforce Commission, the group hopes there’s still time to convince lawmakers to do so.

Still, the group was pleased to see that both bills supported a boost in funding, adding another $18 million over the next two years to the state’s Early Childhood Intervention (ECI) services for infants and toddlers with disabilities and developmental delays.

“It’s great to see that legislators came together to provide funding for the growing number of infants and toddlers enrolled in ECI so they can learn to walk, communicate with their families, get ready for school, or meet other goals,” said Alec Mendoza, senior policy associate for health at Texans Care for Children.

Jaden Edison, Alejandro Serrano, Alejandra Martinez, and Terri Langford contributed to this report.

Disclosure: Texans Care for Children, Texas 2036 and Texas State Teachers Association have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.