Texas Governor Greg Abbott, House Speaker Dustin Burrows, and Lt. Gov. Dan Patrick have instructed state agencies, appellate courts, and universities to cut spending by 3% in their budget requests for the next two years. This move is intended to maintain fiscal conservatism and create room for funding priorities such as property tax cuts.

Exemptions and Guidance

Public education funding and the state’s new private school voucher program are exempt from the 3% cut. Additionally, funding for social programs required by state law, payroll growth in state pension systems, and employee benefits will not be reduced. Abbott stated, “Texas leads the nation with a strong economy and responsible governance that puts families first.” He emphasized that this guidance protects investments in public education and delivers property tax relief, making the cost of living more manageable for Texas families through strict standards of efficiency and accountability.

In 2025, the Legislature approved a $338 billion budget, which represents a 5% increase from the previous two-year budget. Lawmakers had a $24 billion budget surplus at the time. The current biennium’s budget allocates $51 billion to property tax cuts, which Abbott has made a top priority for the next session.

State Rep. Gina Hinojosa, the Democratic nominee for governor, has proposed using $17 billion from the state’s rainy day fund to send each Texas household a $1,500 check, criticizing Abbott for “hoarding” money in the account. As of November 2025, the fund stood at a record $24.8 billion.

Original reporting: Texas Tribune (HLL/CB) — read the source article.