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The 89th Legislative Session (2025) continued a clear and accelerating trend toward growth in the scale, scope, and ambition of state government. Across a wide range of policy areas, including the state budget, education, energy, infrastructure, healthcare, and economic development, Texas lawmakers enacted legislation that significantly expanded government spending, regulatory authority, and institutional reach.
Texas Policy Research (TPR) believes that many of these changes represent a departure from the traditional Texas model of limited government, fiscal restraint, and market-driven growth. As outlined in our 89th Legislative Session Policy Brief: Government Spending, the session marked a structural shift in how state government approaches economic development, public services, and long-term fiscal commitments.
Let’s examine some of the most consequential budgetary decisions and legislative actions of the 89th Legislature, evaluating how they reflect the expansion of government and how they conflict with core liberty principles.
The 89th Legislature and the Expansion of Government
TPR’s 89th Legislative Session Policy Brief: Government Spending details how the state budget and related legislation represent one of the most significant expansions of Texas government in modern history.
Record-Breaking Budget Growth Under Senate Bill 1
The 2026–27 biennial state budget enacted through Senate Bill 1 totals approximately $338 billion. This represents a 27.6% increase over the 2022–23 biennium and a 43% increase since the 2020–21 budget cycle.
This growth far exceeds Texas population growth and inflation, indicating that spending increases are not primarily driven by proportional increases in need, but by the expansion of ongoing government commitments. While the budget includes property tax relief and additional funding for public education, those provisions are modest when compared to the overall growth in spending.
A substantial portion of new funding is directed toward expanded state functions, corporate subsidy programs, new institutional initiatives, and large-scale investments in infrastructure, energy, and medical research. Rather than prioritizing structural tax relief or returning surplus revenue to taxpayers, the Legislature increased spending across nearly every category, embedding higher expenditures into the permanent budget baseline.
Expansion of Subsidies, Corporate Welfare, and State-Led Industry Initiatives
Beyond the general budget, the 89th Legislature enacted legislation that expands state-administered programs designed to influence economic development, technology, education, and healthcare.
House Bill 4751, authored by State Rep. Giovanni Capriglione (R-Southlake), establishes a new public program for quantum technology development, administered through a state-managed fund with grant-making authority directed toward private companies and institutions. TPR has warned that the absence of a sunset clause effectively institutionalizes permanent, state-led corporate welfare.
House Bill 4638, authored by State Rep. Greg Bonnen (R-Friendswood), restructures and expands the state-run pharmaceutical initiative, increasing government involvement in drug manufacturing, distribution, and therapy development. This represents a shift away from market-based healthcare solutions toward state-backed production and control.
House Bill 322, authored by State Rep. Ryan Guillen (R-Rio Grande City), broadens the allowable uses of the Jobs and Education for Texans (JET) grant program so that schools and public institutions can receive subsidies for ongoing technology infrastructure and maintenance, rather than limited start-up costs. This change entrenches recurring subsidies and reduces reliance on private-sector initiative and competition.
Collectively, these measures reflect a philosophical shift. Rather than allowing private enterprise and market forces to drive innovation and growth, the state increasingly positions itself as the primary facilitator and funder of economic activity, adopting a centralized, government-directed approach.
Regulatory and Bureaucratic Growth Across Policy Areas
The 89th Legislature also expanded regulatory authority and bureaucratic infrastructure through the creation of new agencies and regulatory frameworks.
House Bill 150, authored by Capriglione, established the Texas Cyber Command, a new state agency responsible for statewide cybersecurity oversight, threat detection, incident response, and coordination among public-sector entities. This represents a significant expansion of permanent government authority in the technology sector.
House Bill 149, also authored by Capriglione, introduced a comprehensive regulatory framework governing the development, deployment, and use of artificial intelligence systems in Texas, further extending the reach of state oversight into emerging technologies.
Senate Bill 1036, known as the Residential Solar Retailer Regulatory Act and authored by State Sen. Judith Zaffirini (D-Laredo), created new regulatory requirements for individuals and businesses involved in the sale or lease of residential solar energy systems, expanding government involvement in the energy marketplace.
Taken together, these actions increase both the breadth and depth of state power through spending, regulation, infrastructure investment, subsidies, and new bureaucratic institutions.
Why These Outcomes Are Among the Most Concerning
There are several reasons these developments raise serious concerns.
First, the size and growth of the budget under Senate Bill 1 institutionalize higher baseline spending rather than relying on limited, one-time investments. Second, the shift from a market-driven to a government-directed economy is evident in programs that replace private initiative with state funding, grants, and control. Third, the expansion of regulatory agencies and oversight mechanisms signals a move toward more centralized and intrusive governance, rather than decentralized and limited government. Finally, many of these programs lack sunset provisions, spending caps, or accountability mechanisms. Without regular review or reassessment, these programs risk unchecked growth regardless of effectiveness or necessity.
These outcomes do not represent isolated policy choices, but rather a systemic shift toward a larger, more interventionist state government.
Conflict With Core Liberty Principles
When the major legislative actions of the 89th Legislature are evaluated against TPR’s core liberty principles, significant misalignment becomes clear.
Undermining Limited Government
The dramatic increase in baseline spending under Senate Bill 1, combined with the creation of new permanent programs and agencies, runs counter to the principle of limited government. Rather than restraining growth, the Legislature embedded expanded government authority into the long-term structure of the state.
Each new agency or permanent program increases the size and power of government, contradicting the foundational idea that government should perform only those functions that are necessary and constitutionally appropriate.
Erosion of Free Enterprise and Market-Driven Solutions
State-led subsidies and corporate welfare programs undermine free enterprise by distorting markets and favoring certain industries or institutions. When the government allocates grants and preferential funding, it weakens competition and disadvantages entrepreneurs who operate without political access or public support.
This form of favoritism risks cronyism and erodes the level playing field essential to a healthy market economy.
Risks to Individual Liberty and Personal Responsibility
The growth of state institutions, regulatory frameworks, and redistributive programs reduces the role of individuals, families, and local communities in decision-making. By substituting centralized mandates for private or local solutions, government expansion can limit individual liberty and discourage personal responsibility.
State-led approaches to economic development, education, healthcare, and technology risk fostering dependence on government rather than encouraging private initiative, innovation, and self-reliance.
Long-Term Risks of Continued Government Expansion
The consequences of these trends extend beyond abstract policy debates. Continued expansion of government during the 89th session further locks Texas into a trajectory of long-term growth in spending, regulation, and centralized control. New agencies and programs become increasingly difficult to dismantle once institutionalized. Basing budgets on continually rising expenditures rather than defined needs increases the risk of fiscal instability and future tax pressure.
As the government becomes a dominant force in investment and service delivery, private initiative may be crowded out, weakening free enterprise. Over time, increased regulation and government presence can erode civil and economic liberty, reducing choice and autonomy for Texans.
Centralization of power also threatens local control, making policies less responsive to community needs and more dependent on statewide mandates.
Conclusion
The 89th Texas Legislature marked a significant expansion of state government through record-setting budgets, new agencies, permanent spending commitments, and an expanded regulatory footprint. These developments represent not only a departure from previous fiscal norms but a structural shift toward a larger and more interventionist government.
When evaluated through the five core liberty principles of Individual Liberty, Personal Responsibility, Free Enterprise, Private Property Rights, and Limited Government, many of the Legislature’s signature actions fall short. They expand centralized power, entrench government growth, distort markets, and reduce the autonomy of individuals and local communities.
If Texas is to remain committed to a liberty-based model of governance, future legislative sessions must reverse this trajectory. That means restraining permanent spending growth, limiting new bureaucratic commitments, restoring market-driven solutions, protecting property and personal freedom, reducing regulatory burdens, and returning surplus revenue to taxpayers rather than embedding it in government expansion.
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