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$288.7 Billion Texas Budget Proposed

Government

Texas state capitol | Image by VDB Photos

Members of the Texas House and Senate have filed bills proposing budgets for the next two years, directing billions of dollars to property tax relief, border security, education, and other legislative priorities.

In Texas, the budget is biennial, meaning it funds the government for two years and must be passed when the legislature meets for its regular session.

The Senate’s bill was filed by Sen. Joan Huffman (R-Harris), the chair of the Senate Finance Committee. Clocking in at 1,033 pages, the proposal would allocate nearly $288.7 billion over the two-year period.

“The state’s commitment to fiscal responsibility has paid major dividends, and the Texas economy is booming,” the senator said in a press release. “We have an obligation to the people of Texas to continue our state’s incredible trajectory by making investments that will keep Texas as the best place to live, work, and raise a family.

“The base budget is a starting point, and I look forward to working with my colleagues to develop a conservative and sustainable budget that addresses our needs and strengthens our economy,” Huffman continued.

If passed in its current form, the bill would allocate $15 billion for property tax relief, with $3 billion going to “increase the homestead exemption to $70,000.” Furthermore, $4.6 billion of funding would go to border security programs.

Additional aspects of the budget included $3 billion of spending on mental health programs, $350 million for a “rural law enforcement fund,” and $600 million for additional school safety initiatives. These items closely reflect the budget priorities previously outlined by Lt. Gov. Dan Patrick, as reported by The Dallas Express.

In response to the Senate bill, Lt. Gov. Patrick suggested that it “keeps our promises to Texans and charts a course for our state’s continued prosperity.

“Our conservative budgeting principles applied throughout SB 1 make sure that government does not grow faster than population times inflation,” Patrick continued.

In the House, Rep. Greg Bonnen (R-League City) filed the companion bill, which is substantially similar to the Senate’s version. The bills from both chambers reflect the versions (House, Senate) proposed by the Legislative Budget Board.

Gov. Greg Abbott tweeted his approval that the first drafts of the budget “included $15 Billion for property tax cuts.”

“We must continue [to] fight for property tax cuts all the way to the end of the session,” the governor continued, reemphasizing themes from his inaugural address.

In his speech, Abbott highlighted that “We now have the largest budget surplus in the history of our state,” promising to “use that budget surplus to provide the largest property tax cut in Texas history.”

However, Texans for Fiscal Responsibility, a state advocacy group, claimed, “While this budget is a great start, it falls short of providing the largest property tax cut in Texas history. … The current record stands at $14.2 billion in compression from the 2008-2009 biennium.”

“To beat that, adjusting for inflation, the Legislature would need to provide around $20 billion in compression,” the group explained in a published statement.

On the other hand, some groups suggest that the property tax reduction reaches the necessary level to be considered the biggest cut in state history.

Texas Public Policy Foundation’s Policy Director James Quintero suggested, “Both the House and the Senate budgets include the two most important priorities for Texans: the largest property tax cut in state history and maintaining a conservative Texas budget.”

The proposed budgets come shortly after Comptroller Glenn Hegar’s biennial revenue estimate, which projected the state to have a 26.3% increase in taxpayer funds from the previous general session in 2021.

“For 2024-25, the state can expect to have $188.2 billion in funds available for general-purpose spending,” Hegar explained, noting that this number includes the historic $32.7 billion budget surplus.

These estimates did not include further collections for federal income taxes or collections already dedicated to specific uses and thus unavailable for “general revenue-related” expenditures.

“We project that revenue collections from all sources and for all purposes will total $342.3 billion,” the comptroller noted.

“This forecast assumes a mild recession in 2023,” Hegar added. “However, the expected downturn for Texas is relatively shallow and short, with the result that real gross state product (GSP) is forecast to grow slowly on an annual basis.”

The budget bills will now be sent to the appropriate committees in both chambers for changes before being advanced to a conference committee including members from both the House and Senate.

Once this committee agrees on a version of the budget, it will be sent to the Senate and House for independent votes. If passed, the bill goes to the comptroller, who must certify that it meets the constitutional requirements.

Once approved by the comptroller, the bill would be ready for the governor to sign. However, the governor has a line-item veto power over anything in the bill as stipulated in the Texas Constitution.

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