Texas Senate approves $336 billion Senate budget, funds schools, health care and public safety

On March 25, 2025, the Texas Senate passed the committee substitute for Senate Bill 1, the biennial general appropriations bill, by a recorded vote of 31 ayes and no nays.

The committee substitute approves $336,000,000,000 in all funds and $153,500,000,000 in general revenue for fiscal years 2026–2027, and the Senate presentation said the bill is “within all constitutional and statutory spending limits.” Senator Hoffman described the measure as “the Senate version of the biennial budget for fiscal years 2026 and 2027.”

The Senate plan fronts several high-dollar priorities. The bill authorizes additional property tax relief, raises the residential homestead exemption to $140,000, and includes a $500,000,000 placeholder for business tax relief. The package provides $70,900,000,000 in all funds for the Foundation School Program, including about $5,100,000,000 for teacher compensation (of which $4,350,000,000 was described as related to prior Senate legislation, SB 26). The budget also contains $6,500,000,000 for Operation Lone Star; $850,000,000 for a community and technical college endowment supporting career and technical education facilities; $3,000,000,000 contingent for a Dementia Prevention and Research Institute of Texas (contingent on legislation and voter approval); and $35,800,000,000 for transportation projects.

Senator Schwartner, who chaired the work group covering Articles 1, 4 and 5, summarized items for public safety, corrections, and judicial support and said the work group “combed over 50 agencies.” Senator Colchorse, chair of the Article 2 work group, said Article 2 focuses on health and human services and enumerated funding for Medicaid operations, eligibility backlog reduction and information technology modernization; she said the bill provides 642 temporary FTEs to address the Medicaid eligibility backlog and $206,200,000 for IT projects.

Senator Creighton, reporting for the Article 3 public education work group, said the bill directs a record investment in public education: $130,000,000,000 in combined public and higher education funding and $73,000,000,000 in general revenue for education. He said the Senate added roughly $8,500,000,000 in new funding for public schools, including increases to support enrollment growth, a larger state share of education funding and measures for teacher pay and incentives.

Senator Bettencourt outlined higher education provisions and said higher education funding totals $32,600,000,000 in all funds, including an $850,000,000 endowment fund for career and technical education at Texas State Technical Colleges and $731,000,000 in general revenue increases.

Other work-group highlights included investments in child and family services, community-based attendant pay (the budget moves the community attendant minimum to $12.44 per hour), increased staffing and retention for correctional and juvenile justice employees, funding for veteran and rural health care, and $5,000,000,000 as the second tranche for the Texas Energy Fund.

Senators asked about details and guardrails for the largest items. In response to a question about state retiree benefits, supporters said the budget includes actuarially determined payments to ERS and a one‑time cost‑of‑living adjustment triggered when actuarial soundness was reached. In response to questions about community attendant wages and nursing facility rates, the Article 2 chair said the package increases the hourly base to $12.44 and raises a payroll-and-benefit tax factor and includes a rider directing nursing facilities to spend 90% of some increases on direct care.

Senator Huffman, chair of Senate Finance, thanked the committee and staff, moved final passage, and the Senate adopted the committee substitute on a 31‑0 vote.

The bill will go to the House for consideration and into conference for final negotiations. Senators said multiple conditional and contingency appropriations in the text are tied to pending policy bills and federal approvals.