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Governor Greg Abbott has unveiled his proposed budget recommendations for the 2026-2027 biennium, emphasizing property tax relief, educational reforms, infrastructure investments, and border security, largely reflecting his own emergency legislative priorities as described in his 2025 State of the State Address. With Texas boasting the eighth-largest economy in the world, Abbott has said he aims to maintain the state’s economic growth while addressing affordability and security concerns. Meanwhile, Texas lawmakers, who are charged with actually appropriating taxpayer money, have also introduced their own budget proposals in both legislative chambers, setting the stage for debates over funding priorities in the months ahead.
Abbott’s budget recommendations represent an initial step in Texas’s comprehensive budget process, which involves multiple stages of review and approval by the state legislature. Ultimately, the final state budget will reflect negotiations between the governor and lawmakers, shaping the state’s fiscal strategy for the next two years.
Governor Abbott’s Emergency Legislative Priorities for 2025
In his 2025 State of the State Address, Governor Abbott identified several emergency legislative priorities that align closely with his budget recommendations. These priorities include property tax relief, major investments in water infrastructure, teacher pay raises, expansion of career training programs, and the promotion of school choice through Education Savings Accounts (ESAs). By designating these issues as emergency items, Abbott signals their urgency and encourages the legislature to act swiftly.
Budget Recommendation Highlights
Governor Abbott’s budget outlines a strategic plan to address key policy areas affecting Texans, including tax relief, education, infrastructure, public safety, and economic development. His proposals seek to build on past legislative efforts while introducing new initiatives aimed at strengthening Texas’ long-term fiscal health and competitiveness. Below are the major highlights from his 2026-2027 budget recommendations:
Property Tax Relief and Reform
A central component of Abbott’s budget is his continued push for property tax relief. Despite past legislative efforts, many Texans have seen their local property tax burdens increase due to rising appraisals and local government tax hikes. Abbott proposes an additional $10 billion in property tax cuts to come from the existing budget surplus to ensure that homeowners and businesses benefit from the state’s efforts to lower costs. He is also calling for a new requirement that any local property tax increase must receive two-thirds voter approval, a move aimed at preventing local governments from offsetting state tax relief with new levies.
Abbott is further advocating for raising the business personal property (BPP) tax exemption from $2,500 to $100,000, providing financial relief to small businesses. This change is intended to support entrepreneurs, spur job creation, and reinforce Texas’ reputation as a pro-business state.
Education Reform and School Choice
Education remains a cornerstone of Abbott’s policy agenda, with a strong emphasis on school choice. His budget proposes allocating $1 billion to fund Universal Education Savings Accounts (ESAs), which would allow parents to use state education dollars for private school tuition, homeschooling, tutoring, and other educational expenses. Abbott has long argued that parents should have greater control over their children’s education, and this proposal aims to expand those options.
Beyond school choice, the budget prioritizes teacher pay increases. Abbott is calling for direct state appropriations to raise teacher salaries and an expansion of the Teacher Incentive Allotment program, which rewards educators based on performance. Additionally, he is proposing a modernization of special education funding, shifting to a service intensity-based model that better aligns resources with student needs.
School safety is another key area of focus. Abbott is requesting $500 million for security improvements, including upgrades to the Sentinel security system, which enhances real-time monitoring of school campuses. His plan builds on past investments in safety infrastructure to ensure that Texas schools remain secure environments for students and teachers.
Investing in Infrastructure and Energy
With Texas experiencing rapid population growth, infrastructure remains a critical priority. Abbott’s budget includes the largest state investment in water infrastructure in Texas history, funding projects such as seawater desalination plants and expanded aquifer storage systems. These initiatives aim to secure the state’s long-term water supply amid increasing demand.
Energy reliability is another major focus, with Abbott proposing an additional $5 billion for the Texas Energy Fund to strengthen the power grid. He is also advocating for the creation of a Texas Nuclear Development and Deployment Fund, positioning the state as a leader in advanced nuclear energy. With Texas already leading the nation in energy production, Abbott sees nuclear power as a key driver of long-term energy security and economic growth.
Additionally, the budget continues broadband expansion efforts, building on the $1.5 billion allocated in the previous session. Expanding high-speed internet access to rural and underserved communities is one of his key priorities, aimed at providing more Texans with opportunities for remote work, education, and business development. The budget also includes new transportation investments, including funding for at-grade rail crossings to enhance safety and efficiency in major urban areas
Public Safety and Border Security
Border security remains one of Abbott’s most prominent priorities. His budget includes a proposed $6.54 billion allocation for Operation Lone Star, the state’s ongoing border security initiative. This funding will be used to expand the state’s border wall, increase law enforcement personnel along the border, and deploy additional Texas National Guard resources to curb illegal crossings and combat drug trafficking. It is unclear as to how the approach will change with a new federal administration poised to support Texas’ efforts along the border.
Abbott’s budget recommendations also address the ongoing fentanyl crisis, proposing an additional $18 million for the state’s naloxone distribution program. This initiative aims to provide first responders, schools, and healthcare providers with life-saving opioid reversal medication to counter the surge in fentanyl overdoses. Additionally, the budget includes new investments in law enforcement recruitment, mental health resources for first responders, and measures to enhance public safety across Texas communities.
Economic Growth and Workforce Development
Abbott’s budget recommendations continue to prioritize Texas’ economic competitiveness. A major focus is the expansion of the Texas CHIPS Act, which seeks to boost semiconductor manufacturing and secure Texas’ position as a leader in advanced technology. With federal incentives driving competition among states, Abbott is pushing for investments that will ensure Texas remains at the forefront of semiconductor production and innovation.
The budget also increases funding for the Texas Space Commission, reinforcing Texas’ role in commercial space exploration. By investing in research and infrastructure, Abbott hopes to attract more aerospace companies to Texas, creating high-paying jobs and strengthening the state’s influence in the growing space industry.
Additionally, Abbott’s budget includes substantial investments in workforce development programs, particularly in community colleges and technical education. His proposal seeks to expand career training initiatives that align with high-demand industries, ensuring that Texas students graduate with the skills necessary to thrive in a competitive job market.
Comparing Abbott’s Budget Recommendations with the Texas Legislature’s Proposal
In January 2025, Texas lawmakers introduced their own budget proposals, with the Senate’s draft totaling $332.9 billion and the House’s version at $335.7 billion. While there is broad agreement between Abbott and the legislature on key issues such as property tax relief, education funding, and infrastructure investments, the specifics of these allocations differ.
The Senate’s budget proposes tax reductions, including an increase in the homestead exemption, while the House budget prioritizes tax compression, allocating $6.5 billion for new tax relief. Abbott’s budget, by comparison, proposes an additional $10 billion in tax cuts while pushing for stronger voter controls on local property tax increases.
Education funding is another key area of alignment and divergence. The Senate budget includes a $1 billion allocation for an ESA program, mirroring Abbott’s push for universal school choice, while the House budget is less explicit on the issue. Both legislative proposals and Abbott’s budget emphasize teacher pay raises and increased public school funding.
On infrastructure, all parties agree on major investments in water supply, transportation, and energy, though funding mechanisms and amounts vary. As the legislative session unfolds, these proposals will be debated and refined to determine Texas’ final budget for the upcoming biennium.
Conclusion
Governor Abbott’s budget recommendations set the stage for a policy agenda centered on lower tax burdens, expanded school choice, major infrastructure investments, and robust border security measures. While there is significant alignment between his proposals and the Texas Legislature’s budget drafts, the differences in funding priorities will be the subject of intense debate in the coming months.
Ultimately, Texas’ final budget will reflect a balance between the governor’s fiscal vision and legislative negotiations. As the process unfolds.
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