The Texas Senate has officially approved Senate Bill 1, finalizing the state budget that will soon be signed by Governor Greg Abbott. This budget focuses on key areas including property tax relief, public education funding, and enhancements to electrical grid and water infrastructure.
With a total price tag of $338 billion, the budget marks a 1.2% increase from the previous biennium. The All State Funds budget allocated for Texas is set at $237.1 billion, reflecting a 4.8% rise compared to the last biennium. The House passed this vital budget on April 11, and it has now moved to the governor’s desk for approval.
Lieutenant Governor Dan Patrick, in a recent statement on social media, highlighted the major components of the budget, underscoring its commitment to providing financial relief to Texas homeowners. A substantial $51 billion has been earmarked specifically for property tax relief initiatives.
This property tax relief is designed to benefit Texas homeowners by increasing the amount of state funding directed to school districts. As a result, the property tax revenue collected at the local level will be reduced. This will be complemented by a proposed increase in the state’s homestead exemption. Through Senate Bill 4 and Senate Joint Resolution 2, both passed in February, the homestead exemption is set to rise from $100,000 to either $140,000 or $150,000 for senior homeowners.
The homestead exemption represents the portion of a home’s value that is not subject to taxation for public schools; therefore, any increase in this exemption allows homeowners to save more. The measures for property tax relief continue a trend observed since cuts were passed in 2019, ensuring ongoing efforts to alleviate the financial burden on property owners across Texas.
In terms of public education, the legislature has reached an agreement on Senate Bill 2, which focuses on enhancing school funding with a total allocation of $8.5 billion. This investment will provide a $4.2 billion fund dedicated to teacher and staff pay raises, expanded incentive pay, and professional development programs for educators.
Several Texas school districts have already begun to outline their plans to utilize this significant funding. In addition to pay raises, the budget also includes $1.3 billion to cover essential expenses such as insurance, utilities, and contributions to the state teacher retirement system.
Funding directed towards special education, full-day pre-K for children of teachers, early learning interventions, and career and technical education initiatives accounts for $2 billion of the new budget. Furthermore, there is an additional $430 million designated for improving school safety measures across the state.
On the infrastructure front, Senate Bill 6 aims to enhance the reliability of Texas’ electrical grid, while House Joint Resolution 7 is set to establish a dedicated state water fund. Both pieces of legislation are currently pending the governor’s approval.
Senate Bill 6 will grant Texas increased oversight over electricity transactions between power generators and the state’s largest electricity consumers, a critical move for grid reliability. Meanwhile, HJR 7 allocates $1 billion from the state’s sales and use tax to develop a water fund intended to support projects aimed at expanding Texas’ water supply.
With both SB 1 and the legislation it finances either approved or awaiting the governor’s signature, Abbott now has a ten-day window to enact these measures. Should he take no action within this timeframe, the bills will automatically become law.
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