Texas Agencies Requested 3 Percent Less, Then $13.3 Billion More

Estimated Time to Read: 40 minutes

Texas writes its budget every two years, and the first move in that process largely belongs to state agencies. Ahead of each legislative session, every state agency files a request laying out what it wants for the coming biennium. The requests for 2028-29 are now in, and they are the first hard numbers of a cycle that ultimately ends when the 90th Legislature writes an appropriations bill in 2027, the state Comptroller certifies it, and the governor signs it.

This cycle came with an instruction attached. In July, Governor Greg Abbott (R), Lieutenant Governor Dan Patrick (R), and House Speaker Dustin Burrows (R-Lubbock) directed agencies to build those requests three percent below what they receive now, exempting some of the largest budget items like public education, Medicaid, and the other obligations the state cannot easily move.

Agencies largely did as instructed. The instruction governed only their base request, which is not everything an agency can ask for.

Across 88 state agencies outside of higher education, General Revenue–related base requests for the 2028-29 biennium came in 2.93 percent below what those agencies are appropriated today, a reduction of $4.27 billion. The instruction from state leadership was 3 percent.

Those same agencies then asked for $13.26 billion back.

That second figure is the exceptional items request, the itemized and priority-ranked asks that sit above an agency's baseline limit. It equals 9.11 percent of the current General Revenue base, more than three times what they trimmed from their base requests. Taken together, base requests and exceptional items, Texas state agencies are asking the 90th Legislature for 6.17 percent more General Revenue than they receive now.

One caveat governs every figure that follows in the article. Agencies do not appropriate money; they ask for it. A Legislative Appropriations Request (LAR) is a proposal filed months before lawmakers convene, and the Legislature sets the final numbers. When this article says an agency reduced something, it means the agency asked for less, not that state spending fell.

The apparent reduction is also thinner than it looks. Seven agencies account for $6.08 billion of decline against a statewide reduction of $4.27 billion, which means the remaining 81 agencies raised their base requests by $1.80 billion. Nearly all of that seven-agency decline traces to one-time appropriations, much of it from a single supplemental spending bill passed in the 89th Legislative Session (2025).

Texas Policy Research

Texas agencies asked for $4.3 billion less, then $13.3 billion more

Change in what agencies requested in General Revenue–related funds, 2026-27 to 2028-29, across 88 state agencies outside higher education. Lawmakers set final appropriations.

Requested less Requested more Net position

Source: agency Legislative Appropriations Requests filed with the Legislative Budget Board for the 2028-29 biennium. Figures are General Revenue and General Revenue–Dedicated funds. Figures extracted with AI-assisted tooling and reconciled against each document’s own restatements. Analysis by Texas Policy Research.

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What Leadership Directed

Every two years, before the Legislature convenes, each state agency files a Legislative Appropriations Request with the Legislative Budget Board and the Office of the Governor, Budget Division. The LAR is the agency's opening bid. It is generated out of the state's budget system in a standard set of schedules, which makes one agency's request directly comparable to another's.

An LAR has two parts. The baseline request is what an agency asks for within a spending limit set jointly by the Legislative Budget Board and the Governor's Office. By the Board's standing instructions, that limit governs General Revenue and General Revenue–Dedicated funds rather than an agency's total budget, which is why the figures in this analysis are General Revenue–related rather than all funds. Exceptional items are everything above that limit, listed separately and ranked by the agency's own priority. The distinction matters because the limit is where state leadership exercises control, and the exceptional items list is where agencies say what they would do with more.

In a letter dated July 14, made public the following day, Governor Abbott, Lt. Governor Patrick and Speaker Burrows directed state agencies to reduce their base appropriation request level by three percent. The letter exempted several of the state's largest obligations: Foundation School Program (FSP) funding as state law requires, debt service on bond authorizations, pension and employee group benefit costs held at fiscal 2027 budgeted levels plus payroll growth, Medicaid, CHIP, foster care, adoption subsidy and Permanency Care Assistance benefits and eligibility including projected caseload growth, and the Texas Education Savings Account (ESA) Program created by Senate Bill 2 (SB 2) in 2025, including projected participation growth.

On exceptional items, the letter was permissive but not silent. Amounts above the baseline “may not be included in the baseline request but may be submitted as Exceptional Item requests,” and agencies submitting them were told they should be prepared to identify lower-priority programs or other savings to offset the added costs. The announcement that accompanied the letter did not mention exceptional items at all.

That offset expectation is the hinge. Agencies were told what their floor could be and invited to ask above it, provided they could say what they would give up in exchange. Nothing in the LAR schedules requires them to show that trade.

Did Agencies Comply?

On the measure that was actually directed, yes. General Revenue–related base requests across the 88 state agencies examined fell from $145.64 billion to $141.37 billion, a decline of 2.93 percent. An aggregate that lands within a tenth of a point of the instruction is not a coincidence.

Agencies say so themselves. The Railroad Commission writes in its own Administrator's Statement that “in accordance with state leadership's direction, the Commission reduced its baseline request by three percent across all strategies,” and adds that the reduction “affects several core regulatory activities that support public safety, environmental protection, and responsible energy development.” The Secretary of State (SOS) reports that its request “includes the required 3% budget reductions and imposes those reductions across all strategies in the SOS budget with three notable exceptions — the Primary Fund, the Constitutional Amendment Election allotment and Chapter 19 funding for counties.” The Trusteed Programs within the Office of the Governor describe a plan “that reflects a 3% reduction from our previous biennial baseline through targeted adjustments.” The Texas Education Agency (TEA) refers in passing to “the 3% reduction requirement in our 2028-2029 Legislative Appropriations Request” while noting it is also requesting a reduction of 140 in its own full-time-equivalent cap.

So the aggregate lands where the instruction pointed, and the agencies that explain themselves describe having applied the reduction, in several cases to functions they would rather have kept. Whether every agency met its own baseline net of its own exemptions is a different question, and not one these documents settle. What the statewide 2.93 percent does not show is why the total moved as far as it did.

The Money That Was Never Coming Back

Seven agencies account for $6.08 billion of General Revenue decline. The statewide reduction is $4.27 billion. The arithmetic is not complicated: once those seven are set aside, the other 81 agencies increased their General Revenue base requests by $1.80 billion, or 1.32 percent.

None of the seven reduced operations to get there. Their current appropriations were inflated by money that was only ever going to be spent once, and much of it came from House Bill 500 (HB 500), the supplemental appropriations bill passed by the 89th Legislature (2025). HB 500 carried a negative impact of $13.19 billion to General Revenue–related funds, and $3.02 billion of it went to these seven agencies for two-year periods.

Agency	HB 500 General Revenue	GR base change, 2026-27 to 2028-29
Water Development Board	$1,755,680,863	−$1,624,868,370
Trusteed Programs, Office of the Governor	$798,607,981	−$3,621,876,423
Preservation Board	$142,413,000	−$264,949,150
Railroad Commission	$120,305,000	−$135,392,094
Historical Commission	$100,980,000	−$194,555,929
Parks and Wildlife Department	$84,650,000	−$204,119,394
Secretary of State	$16,158,019	−$30,774,604
Total	$3,018,794,863	−$6,076,535,964

That $3.02 billion is equivalent to 71 percent of the entire apparent statewide reduction. The two are not the same kind of number — the $4.27 billion is a net figure that already absorbs $1.80 billion of growth elsewhere — but in individual cases the connection is direct rather than arithmetic, and two of them are worth setting out.

The Water Development Board is the clearest case. HB 500 Section 6.02 appropriated "$1,038,000,000 from the general revenue fund to the Water Development Board for the two-year period beginning on the effective date of this Act to be used for water infrastructure and supply projects and grants." Two further sections added $131 million in matching funds and $581 million for specific projects. The board's own statement explains that because the appropriation language gave it no authority to move the money into an established financial assistance program, it had to build a new one, the Water Supply and Infrastructure Grants program, which drew 682 applications by its July 2026 deadline. Set that one-time money against the board's $1.62 billion decline and its recurring General Revenue base actually rose by roughly $131 million.

The Trusteed Programs decline is the largest and the least fully explained by HB 500, which covers 22 percent of it. The Governor's office describes the rest in its own words: the 89th Legislature charged it with "$350 million Texas Advanced Nuclear Development Fund; $300 million for the Texas Moving Image Industry Incentive Program (TMIIIP); $200 million for Disaster Funds; $50 million for local grants; $28 million for meteorological forecasting."

The Secretary of State belongs in a different category. Its decline is cyclical rather than one-time, driven by the election calendar, and it says as much in exempting the Primary Fund and the Constitutional Amendment Election allotment from the reduction it applied everywhere else.

What Agencies Are Asking For Instead

Across the full set of requests, agencies filed 744 separate exceptional items. For the 88 state agencies outside higher education, those items total $13.26 billion in General Revenue. Statewide across all agencies, including universities, exceptional items come to $20.24 billion in all funds, of which 83 percent is General Revenue.

The Railroad Commission illustrates the mechanism better than any summary statistic. HB 500 Section 6.11 appropriated "$100,000,000 from the general revenue fund to the Railroad Commission for the two-year period beginning on the effective date of this Act for use in the commission's well plugging program." That money is now spent. The Commission's largest exceptional item for 2028-29 is "Oil and Gas Orphaned Well Plugging," for $100,000,000. The same program, the same figure, requested again through a different door. The Commission explains that the number and cost of emergency wells have risen sharply over five years and that absorbing them within the plugging budget "is unsustainable."

Other agencies are more literal still. The State Soil and Water Conservation Board's first-priority exceptional item is named “Restoration of 3% Reduction,” at $2,733,661 for the biennium. The Office of the Attorney General's first priority is “Three Percent Reduction Restoration,” at $15.9 million. In both cases, the agency reduced its request as instructed and then listed the restoration of that reduction as the single thing it most wants funded. Neither request identifies an offsetting saving, though the guidance asked agencies seeking exceptional items to be prepared to name one. Nothing in the schedules requires them to show it, so the silence is a property of the form as much as a choice by the agency.

Whether that is gamesmanship or candor depends on the reader. An agency that believes the reduction was unworkable has two choices: refuse the instruction, or follow it and say plainly in the next document what it costs. These agencies chose the second.

The Largest Requests

The largest exceptional items request belongs to the Health and Human Services Commission (HHSC), at $6.22 billion in all funds, of which $3.13 billion is General Revenue. Measured against a base as large as HHSC's, that is 5.86 percent. The Department of Criminal Justice (TDCJ) is second at $2.29 billion, every dollar of it General Revenue and equal to 21.35 percent of its base.

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The twelve largest exceptional items requests

Money state agencies ask for above their baseline limit, 2028-29 biennium. Higher education institutions excluded.

General Revenue Federal and other funds

Source: agency Legislative Appropriations Requests filed with the Legislative Budget Board for the 2028-29 biennium. “Share of base” gives each request against the agency’s current all-funds appropriation. Figures extracted with AI-assisted tooling and reconciled against each document’s own restatements. Analysis by Texas Policy Research.

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The Department of Public Safety (DPS) is third in dollars and near the top in intensity. It requests $1.33 billion, all General Revenue, equal to 32.27 percent of a base request it reduced by 13.99 percent. Its first priority alone, “New Infrastructure and Maintenance,” is $551,029,797, with transportation items accounting for another $305 million, technology stabilization $382 million, and two staffing items adding 175 full-time equivalents.

The Trusteed Programs within the Office of the Governor follow at $1.31 billion, which includes the $150 million in disaster funding the office asks for on top of the $150 million already in its base.

Texas Cyber Command filed its first LAR, having been created by the 89th Legislature. It asks for $234,984,376 and 120 positions across seven items, led by $54.4 million for cost recovery and $29.1 million for statutory staffing. Because the agency has no prior biennium, there is no baseline to compare against and no way to read its request as growth or restraint. It is simply the cost of standing up a new agency, and it will be among the first things the Legislature has to price.

The Texas Education Agency (TEA) is the largest mover in absolute terms and the one most likely to be misread. Its base request rises 6.02 percent, from $91.76 billion to $97.29 billion, an increase of $5.5 billion that dwarfs every reduction elsewhere in state government. That is not defiance of the directive. Foundation School Program funding is driven by formula rather than agency discretion, and TEA states that it applied the 3 percent reduction to what it controls while also proposing a lower staffing cap for itself. Its exceptional items, at $439.2 million across seven requests, amount to less than half a percent of its base. Worth noting alongside that increase: TEA reports enrollment has grown only 0.7 percent since 2021-22 and fell by roughly 76,000 students in 2025-26.

The same kind of exemption sits behind the largest percentage increase of any state agency, and it is worth reading carefully. The Comptroller's education program, which administers the Texas Education Savings Account (ESA) Program created by SB 2 in 2025, was appropriated $1,000,000,000 in fiscal 2026 and nothing in fiscal 2027. It requests $1,037,812,500 in each year of 2028-29, or $2,075,625,000 for the biennium, plus $226 million in exceptional items. Measured biennium to biennium, that is a 107.56 percent increase. Measured against the one year the program has actually been funded, it is about 3.8 percent more per year. The agency attributes the request to demand, reporting that the program has produced the nation's longest school choice waiting list. The program was expressly exempt from the 3 percent instruction, and the letter directed that its funding be maintained, including projected participation growth.

Texas Policy Research supports truly universal school choice and opposed SB 2 as written and as ultimately passed, on the grounds that its appropriation cap would serve a small share of Texas students by lottery while leaving public school funding untouched, a parallel program added to the budget rather than a redirection of dollars already in it. The request now on file illustrates the problem. The $2.08 billion sought for 2028-29 is roughly double the $1 billion appropriated for 2026-27, and still well short of the roughly $7 billion those two years would cost if the Legislature fully funded the demand the LBB's fiscal note estimated. The waiting list is the space between those figures. In written testimony to the Senate Committee on Education this month, TPR argued that "when demand substantially exceeds available funding, the program is not yet truly universal," and warned that "simply increasing appropriations without reforming the broader education funding system risks creating another permanently expanding government program."

At the other end of the scale, the State Soil and Water Conservation Board trimmed its base 2.01 percent and then requested $159.1 million in exceptional items against a $144.5 million base, more than its entire current appropriation. The bulk of that is $150 million for high-hazard flood control dam needs.

What This Means for the 90th Legislature

Nothing in an LAR is appropriated. These are opening positions, and the gap between what agencies request and what they receive is usually wide. But the requests are the first hard numbers of the budget cycle, and they establish what the Legislature will spend the session saying no to.

Three things stand out as the process moves forward.

The baseline instruction worked as designed and revealed its own limit. Agencies held their floor where they were told to hold it, then used the exceptional items schedule to ask for three times the reduction. The guidance did ask agencies seeking exceptional items to be ready to name offsetting savings, but it attached no mechanism to that expectation, and the LAR schedules do not require an agency to show the trade. An expectation without a form to fill in constrains the paperwork more than the spending.

That outcome was foreseeable, and it was foreseen. In a joint statement issued the day after the guidance, Texas Policy Research and three other grassroots activist-centric individuals and organizations noted that agencies "are being instructed to request three percent less than their previous baseline, not necessarily to spend three percent less," and that they "remain free to seek additional funding through exceptional item requests." The filings now on record put a number on that: $13.26 billion.

That statement asked for more than smaller requests. Texas Policy Research Action joined Vance Ginn of Ginn Economic Consulting, Bill Peacock of ExcellentThought and JoAnn Fleming of Grassroots America – We the People in arguing that "Texans deserve policies that produce measurable reductions in government spending, not simply smaller requests for future spending increases," and that the guidance, while a step in the right direction, was "not commensurate with the scale of the challenge." Peacock noted that appropriations of state funds had risen $110 billion over the previous decade, up 78 percent. Fleming put the grassroots case plainly: "Grassroots conservatives didn't spend decades fighting to slow government growth. We fought to shrink government."

Scale matters here too, and it is the part most easily lost in an argument about 3 percent. The 2026-27 budget that agencies measured themselves against is the largest in state history, nearly $337.4 billion in All Funds and $237 billion in State Funds. Set against the 2022-23 biennium, State Funds have grown 42.8 percent and All Funds 27.4 percent, substantially faster than population growth and inflation over the same period. That is the base from which this reduction is measured.

That is what makes the arithmetic of the instruction worth stating plainly. A 3 percent reduction carried fully through to appropriations would leave nearly all of that growth in place. The guidance governs the direction of the next request, not the size of the base it starts from.

The statewide total is harder to read than it appears. A reduction that looks like $4.27 billion of restraint is substantially the expiration of one-time appropriations the Legislature itself made in 2025. Agencies without that tailwind grew. Any account of this budget cycle that compares 2026-27 to 2028-29 without separating recurring money from non-recurring money will overstate how much agencies pared back, in either direction.

That difficulty is itself worth naming. These documents are public, but answering a question as basic as whether agencies requested less than last time meant assembling 386 filings and reconciling each one against itself, because supplemental appropriations, dedicated accounts and one-time money are reported on different bases and in different places. Texas Policy Research has argued that this is precisely where Texas transparency falls short: budget documents can be technically public while still failing to offer clear comparability, and without standardized measures of spending growth against population and inflation, structural expansion is difficult for a taxpayer to see. A budget that takes a purpose-built pipeline to read is not yet a transparent one.

And the real constraint has not arrived yet. The Legislative Budget Board and the Governor's Office are holding hearings and will produce recommendations before the session convenes in January 2027. The Comptroller's Biennial Revenue Estimate (BRE), which sets what is actually available, comes later still. State leadership signaled a tighter cycle when it issued the 3 percent instruction. Agencies have now said, in $13.26 billion of itemized General Revenue requests, what they believe that instruction costs.

About these figures

How this analysis was produced

Texas Policy Research compiled these figures from the 386 Legislative Appropriations Request documents posted to the Legislative Budget Board’s document system for the 2028-29 biennium, covering 209 agency submissions. Figures come from each agency’s own schedules: 2.B for base requests by method of finance, and 2.E for exceptional items. Direct quotations come from the Administrator’s Statement filed as part of that agency’s request.

Disclosure: use of AI

Texas Policy Research used AI-assisted tooling to review all 386 submitted LAR documents. Together they run to several thousand pages of tabular schedules, and reading them by hand at that volume is not practical on the timeline of a budget cycle.

The AI’s role was extraction and verification, not judgment. A parser read the figures out of each document’s schedules and then tested them against the restatements each document makes about itself. Schedule 2.A independently reports base totals; schedule 2.F independently reports base, exceptional items and the combined request; the individual exceptional items must sum to the 2.E total; the method-of-finance components must sum to the grand total; and each item’s two fiscal years must sum to its biennial figure. A figure that failed any of those checks was not used. The agency name read from each document was also matched against the Legislative Budget Board’s own agency roster, so no document could be attributed to the wrong agency.

Every figure published here traces to a specific schedule in a specific public document, and those documents are linked throughout the article. The source documents remain authoritative. The analysis, the selection of what matters and the conclusions are Texas Policy Research’s own, and where an agency explains its own numbers we quote the agency rather than characterize it.

Reconciliation and exclusions

Of 209 submissions, 200 reconciled on every check. Three failed and are excluded from the totals here: Texas Southern University, whose document is degraded; the Fifth Court of Appeals District, whose own 2.E and 2.F schedules disagree; and Tyler Junior College, which reports its exceptional request inside its base. The Department of Public Safety is included despite one failed check, because the failure is a corrupted digit in the published PDF and its totals are confirmed by two other schedules.

Higher education institutions are excluded from all base-change comparisons. Community colleges do not request formula funding in their LAR at all, and universities carry it differently, so their reported base falls by 70 to 97 percent for structural reasons that have nothing to do with budget discipline. Including them would have overstated the statewide reduction by roughly $10 billion. Their exceptional items are real and are included in the all-funds figures where noted. The Higher Education Coordinating Board is treated as a state agency rather than an institution, since it receives ordinary appropriations and its base carries none of that distortion; its request is reachable at that link but is not listed on the Board’s index of 2028-29 submissions.

Summing agency requests counts interagency transfers twice, since money appropriated to one agency and contracted to another appears in both. Those transfers total $1.64 billion in the 2028-29 requests, and netting them changes the all-funds result by less than half a percentage point.

Four agencies that filed for 2026-27 had not posted a 2028-29 request as of this writing: the State Office of Risk Management, the School for the Blind and Visually Impaired, the Texas Lottery Commission, and the Texas State Technical Colleges, which file through their system office.

Appropriation amounts attributed to House Bill 500 are taken from the enrolled bill text. Its fiscal note books the appropriations to fiscal 2025, while the bill itself appropriates “for the two-year period beginning on the effective date of this Act”; agencies carry those balances into their 2026-27 budgeted figures, which is where they appear in this comparison.

One further caution applies to percentage comparisons for individual agencies. A biennium here is the sum of two fiscal years, and a handful of programs are funded in only one of them. The Education Savings Account program is the clearest case, with $1 billion appropriated in fiscal 2026 and nothing in fiscal 2027, which makes its biennium-to-biennium change look far larger than its annual change. Percentage figures for single agencies should be read against the underlying fiscal-year amounts rather than on their own.

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